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Chioke: Price hike in power looms after elections

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Chioke: Price hike in power looms after elections

 

Ike Chioke, Group Managing Director, Afrinvest (West Africa), in this interview with Chris Ugwu, speaks on Nigeria’s stocks, money market, power sector and state of the economy, among others. Excerpts:

 

 

 

Why are banks still averse to giving credit to the manufacturing sector and why is Nigeria still on the lower rung of the ladder in trade and investment in Africa, despite bright growth prospects?
It is because of endemic nature in the economy. For instance, if a sector is not cost competitive and there is a lot of uncertainty issues and banks know that for it to advance loan today, it will take nine to 18 months for the loan to translate into income and a lot can happen within these months, in which case you already know that immediately a loan is drawn down, it may actually become bad because of endemic features in the economy. Hence, we need compressive approach towards resolving some of these economic sector issues because once we resolve them it will be clear you can make money and banks will be the ones that will pressure you to take facilities.
Nigeria is on the lower rung of the ladder of trade and investment in Africa, despite bright growth prospects due to its demographics. To be certain, this has persisted for an extended period and it is a sign of lack of strong will to turn the tide. Academic literature and historical evidence have demonstrated that trade and investment are necessary to create jobs, raise incomes, upgrade domestic supply chains for efficiency and effectiveness, develop expertise and make cheaper goods and services available. These are all important for advancing human development.
To fully participate in this ecosystem of trade and investment, there is a need for competitiveness. This entails having good infrastructure and institutions that enable strong business growth – indeed, countries, which have made rapid advancements in trade and investment have demonstrated gains in this regard. Nigeria is not competitive and the World Competitiveness Index asserts this by ranking Nigeria 125th of 137 countries. The index measures basic requirements such as institutions, infrastructure, macro-economic environment and health & primary education, as well as select efficiency enhancers such as innovation and sophistication.

CBN retained the Monetary Policy Rate (MPR) and inflation is trending up. Why?
Inflation uptick is coming from food pricing inflation, which is not unexpected giving the challenges we are having, especially in North Central as regards herdsmen and farmers clashes. So you can see how security issues are affecting our agriculture and coming down to the fiscal issue in terms of inflation. In terms of what CBN may do in the next MPR meetings, I think they will probably keep interest rate as it is because as we go into this election cycle we all know what we read in newspapers about dollars changing hands at the primaries for both APC and PDP. But as we go into the election cycle, more cash is going to hit the system and CBN will be concerned about maintaining price equilibrium. So lowering interest rate may not be the right thing to do at this time, I think they will maintain the status quo and try to manage themselves until the elections are concluded.

Various reforms initiated by the authorities have not been able to significantly tame challenges in the power sector, what is your take?
The traditional challenges in the power sector are not new, but over the past one year, they have festered into a nasty boil. The industry is fraught with liquidity challenges – itself a result of poor tariffs – and stakeholders are at odds with each other, as the escalation of internal struggles in the sector is reaching a tipping point. The power industry is in search of bold and tough reforms, which may not guarantee quick fixes – but can offer a promising future. Across the value chain of the power industry, there are significant deficiencies. Value-chain specific challenges include gas pricing and supply shortages, centralisation of the transmission grid and poor metering in distribution. Decentralisation of transmission is necessary to avoid grid collapse. The Transmission Company of Nigeria (TCN) is currently in charge of all transmission infrastructure, covering inter-state networks. The same issues that have affected other segments of the value chain obtain in transmission, ranging from illiquidity to weak transmission infrastructure. With decentralisation, mini-grids can be introduced. This will enable effective and efficient management of the transmission network as transmission losses and grid collapse in one network will not affect other mini-grids. While this heralds promise, its regulation, framework and implementation remain contentious.
For metering, NERC has proposed a new regulated operator – Meter Asset Provider – with a view to hastening the deployment of meters to close the current over 60.0 per cent metering gap. The benefit of this approach is that it provides additional investment into the industry, as players in the metering space free distribution companies of additional investment and administration – which are all costs that cannot be sufficiently met by illiquid Discos. The challenge impeding implementation is that pricing and the manner of billing are yet to be agreed and the choice of the operator best suited to collect payments is contentious.
As the performance agreement guiding the privatisation of DisCos elapses after five years in 2019, it presents the best opportunity to take stock of progress and to re-strategize. While the outcome of the 2019 elections may dictate the long-term outlook of the power industry, we believe the current situation of the industry is untenable and, as such, massive pricing adjustment looms immediately after 2019 elections.

How do you assess securities issues in the country and what do you think government should do?
Elevated insecurity has persisted for several decades in Nigeria, as interventions are mostly temporary and gains short-lived. Since the democratic dispensation started in 1999, the initial challenge was insecurity in the Niger-Delta, as local communities fought for resource control given underdevelopment in oil producing areas. The exploration and production activities of upstream companies had destroyed aquatic and land resources, thus eroding the occupations of majority of the people in the Niger-Delta. The resulting militancy usually lead to attacks on oil and gas infrastructure with impact on oil production and consequently Nigeria’s revenues. Given its relevance to maintaining macro-economic stability and sustaining growth, the Federal Government typically quickly intervenes to pacify communities – even though a resurgence would emerge after a brief spell of calm.
Today, insecurity has assumed manifold dimensions. In the South-South, militancy still rages, but government has managed this more effectively by engagement and dialogue with community leaders – though the possibility of a resurgence is a latent security risk in Nigeria. In the South-East, the desire for self-actualisation has lately re-emerged following decades of marginalisation of the region since the 1967-70 civil war, which was based on the same reason. Between 2016 and 2017, these sentiments raged and the movement gained momentum, leading to frequent protests and confrontation with the state military – with losses of lives and the leader imprisoned for more than a year. Although calm has since returned as government intensified clandestine efforts to avert an uprising – its solutions are not public knowledge – this is still a latent security risk. In the North-East and pockets of places in the North-West, Islamic insurgents continue to sack communities and take hostages. Although remarkable gains have been made since 2015, over 1.7 million people displaced are yet to return to communities to restart their life. In the North-Central, the conflict between farmers and herders has intensified due to adverse climate change impacts on grazing in Northern-Nigerian, leading to the destruction of lives and properties, especially in Benue.
There are no automatic fixes to insecurity because the incidents differ fundamentally, including the ideologies behind them. Mostly indecisive until security issues reach untenable levels, government’s slow response to insecurity is a militating factor, as well as its refusal to go beyond the surface in dealing with insurgency beyond the deployment of military forces. This results in escalation rather than ease. There is a need to rethink the current approaches to dealing with unrests. Creating a framework for engagement, building the capacities of public sector workers to respond, strengthening security and legal institutions and abiding by the dictates of the laws are critical success factors.

As the 2019 elections draw near, has Nigeria built democratic institutions and imbibed professionalism in governance?
A painful reality that underlies governance, regulation and ultimately development, is weak institutions. The quality of the public sector workforce, the policies promoted and the processes and operations, are all determinants of a country’s growth and development. In Nigeria, there is lack of openness in public institutions as procurement, licenses and permits, recruitment and contract bids are couched as “Top Secret” information. Even when these are advertised, the information is usually insufficient, thus creating a situation where there is a lack of meritocracy in government processes, which constitute a drag on productivity. Public institutions are also not accountable, as funding, projects, annual reports, are not made public – and even when these are available, they are not timely and exhaustive.
In the economic agenda of the current government, public sector reform was touted, but the role of institutions and development of institutions, especially as it relates to regulation, policy, transparency and accountability, have not been considered a priority and no clear policies back this up. Transparency in governance and sound institutions are necessary to enhance public trust, thus generating support that make passing tough reforms slightly easier.

Do you think governments have the ability to adequately fund infrastructure gap in Nigeria?
The infrastructure gap in Nigeria is massive, and this has continued to widen. In the past two decades, population has increased by over 50 per cent and yet there have been no noteworthy infrastructure upgrades. As population has expanded, especially in urban areas, the infrastructure stock has failed to catch up. The consequence is revealed in slow travel times, frequent accidents, high cost of transport, especially for businesses and high cost of residential and commercial buildings in cities such as Lagos, Abuja and Port Harcourt.
In power and telecommunications, there is modest participation by the private sector, with government acting as regulator. The hand of the regulator weighs heavily on expansion in this market, especially given price controls. Yet, without private sector partnerships, government lacks the capability to adequately fund the infrastructure gap. Public private partnerships (PPPs) have been recommended as a tested and worthy method to close the infrastructure gap, particularly in road infrastructure. The benefits of PPPs in the provision of effective and efficient project management and infrastructure maintenance are well documented. The projects are usually self-financing as users access the service after paying a fee and government only parts with a small amount. Usually, policy inconsistencies and political instability, amid weak enforcement of contracts and slow judicial processes are the bane of Public Private sector Partnerships (PPPs) in Nigeria. This is the case of the Lekki-Epe expressway, where government revoked the PPP contract. Setting these challenges aside, there is room for rapid infrastructure development through PPPs.

What is your take on the current sell offs in the stock market?
The sell-off we see, we will like to attribute it to four major points, the first one is improving yield in the developed markets. So foreign investors are moving their investment to saver heaven and you also look at the contagion effect from the emerging market. Some of the Nigerian stocks are contained on the frontier market, some in the emerging market, especially in the fixed income. You also look at some of the moves by our politicians in the last two or three months, we saw the issue with MTN that also dampened foreign investors confidence in terms of capital importation documents. Some of those things combine together to affect the sell offs we are seeing. And looking forward, we expect that as we approach the 2019 election, there will be continued caution, as investors will watch the move of government. We expect that before the end of this year, market may remain soft, but investors have been able to identify market with good fundamentals. We have seen that in terms of volume in some top banks recently despite their current price levels but they have been taken significant positions buying ahead of elections.

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CBN confirms licensing three new banks

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CBN confirms licensing three new banks

The Central Bank of Nigeria (CBN) has licensed two new commercial banks and one non-interest bank, the apex bank announced yesterday.

A  list of deposit money banks (DMBs) and financial holding companies operating in the country as at July 19, 2019, posted on its website yesterday shows that CBN had issued a commercial banking licence  with national authorisation and a commercial banking licence  with regional  authorisation to Titan Trust Bank Limited and Globus Bank Limited respectively.

The list also indicates that the regulator has issued a Non-Interest Banking licence   with regional authorisation to TAJ Bank Limited.

With this development, the number of commercial banks with national authorization (having a capital base of N25billion and allowed to operate in all states of the federation but barred from having off shore operations) now stands at 11, while the number of commercial banks with regional authorization (having a capital base of N10 billion and restricted to operate within a geographical scope of a minimum of five and a maximum of 10 contiguous states) now stands at three.

Similarly, the licensing of TAJ Bank Limited as a non-interest bank  with regional authorisation means that there are now two non-interest banks operating in the country. However, the first such bank licensed by the CBN, Jaiz Bank, has a national authorisation, meaning it can operate in all states of the federation.

The CBN had in June 2011 announced a minimum capital base of N10 billion for national Islamic banks and N5 billion for regional Islamic banks.

Specifically, the list shows that the country now has a total of  29 DMBs consisting of eight commercial banks with international banking authorization (N50 billion capital base and allowed to have national and off-shore operations), 11 commercial banks  with national authorisation, three commercial banks with regional authorisation, two non-interest banks and five merchant  banks with national authorisation.

According to the list, FBN Holdings Plc., FCMB Group Plc, FSDH Holding Company and Stanbic IBTC Holdings Plc make up the four holding companies in the industry.

There is speculation that the licensing of the new banks is part of CBN’s efforts to attract new investments into the industry and boost financial inclusion in the country.

However, analysts point out that the industry is dominated by Tier 1 lenders– First Bank, UBA, Guaranty Trust Bank, Access Bank and Zenith Bank- which continue to dominate in terms of branch spread, deposit size, and loan issuance.

Besides, the recent announcement by the CBN Governor, Mr. Godwin Emefiele, that the apex bank was planning a fresh recapitilisation of the banks has sparked speculation that consolidation is looming in the industry.

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Incursion: Dangers of sloppy airport security

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Incursion: Dangers of sloppy airport security

The intrusion into the runway of Lagos airport by a foreigner, who was found close to a fully loaded aircraft, has again exposed security lapses at Nigerian airports, as the nation’s aviation security system constantly fails to anticipate threats, writes WOLE SHADARE

 

Caught napping

Not only the Federal Airports Authority of Nigeria (FAAN) saw the incursion into a sensitive part of Lagos airport where a Nigerien, Usman Adamu, beat security architecture to crawl out and climb an aeroplane set for departure as a huge embarrassment, many people were stunned at the seeming porous nature of the nation’s airports.

Unlike in the past when FAAN engaged in bulk passing, the Managing Director of the agency, Capt. Hamisu Yadudu, owned up to the inability of the agency to rise up to the issue when it mattered most.

In fact,  in all of this, FAAN did not cover itself in glory.

A stunned Yadudu, who was elevated to his current position about two months ago in a press conference held at the Mallam Aminu Kano International Airport, Kano on Saturday, said the agency took full responsibility of what it described as an embarrassment.

Inquest

As a first step to its in-house inquest, FAAN hurriedly suspended indefinitely the aviation security unit heads, who were on duty when the incident occurred, pending completion of ongoing investigation into the regrettable security infringement.

The intruder was seen in a viral video emerging from the engine of Azman B737-500 aircraft. After emerging from the engine, he climbed the roof of the engine and tried to gain access to the aircraft cabin.

The situation caused pandemonium as passengers screamed asking for the door of the plane to be opened for them to disembark.

The affected officers are the Airport Chief of Security, Mamman Mohammed Sadiku, International Terminal Security Officer, Oni Adedamola Abiodun, Head of Department Domestic Terminal 2, Owotor Kenneth Okezie and Head of Department Domestic Terminal 1, Badejo Adebowale Ayodele.

The management had equally commenced thorough investigation towards the recovery and sustenance of the airport’s proactive security integrity.

What happened last week may have been foretold by experts and stakeholders, who have taken FAAN to task over what they view as poor handling of security at the airports especially at Nigeria’s busiest airport, the Murtala Muhammed Airport, Lagos. 

Carelessness

In the current climate of insecurity in Nigeria and other parts of the world, it is unthinkable that airport security officials would be so careless as to allow a man from Republic of Niger carry out a stunt on a passenger airplane that was set for take-off from Lagos to Port-Harcourt.

To use a tired cliché: Wonders shall never cease in our airports. How did that happen? Was it a one-off act intended to dare the devil? Was it a deliberate attempt by the young man to prove a point, to underscore the poor security procedures in our airports?

Has this particular incident drawn the country’s attention to what is already known about the keenness of airport security officials to approach their job with total disregard for the safety of travellers?

No matter how it is seen, the security gaffe occurred because FAAN’s security staff went to sleep. There was obvious case of negligence.

The security breach and blunder have made news across the world. It is the kind of event that attracts negative media coverage of the country. It is the kind of unimaginable security infringement that makes the world to express surprise whenever the tight security procedures in place at the nation’s airports are being discussed.

Recurrence

This is not the first time the country would be regaled with issues like this. In 2013 and 2014, the country witnessed about 17 security breaches.

In 2017, security lapses at airports gained notoriety as a private jet carrying two top Nigerian musical artists, Ayodeji Ibrahim Balogun aka “Wizkid” and Tiwa Savage from Uyo, the capital of Akwa Ibom State, was attacked and robbed while taxiing on Murtala Muhammed airport’s runway 18L.

The Bombardier Challenger 605 jet, with registration number T7-A00, was said to have arrived Lagos from Uyo about 8:33p.m. and was slowly taxiing to the arrival hangar when the cargo compartment was burgled.

The jet slowed to allow an Ethiopian Airline cargo plane, with registration number ET-ARH, to push back for take-off.

The pilot, Captain Cloud Cote, was said to have noticed the cargo door opened by burglars and promptly notified FAAN security, but the burglars had disappeared before FAAN officials could make it to the point where the attack took place.

Upon arrival at Quits Aviation Centre, a private jet hangar, the pilot discovered that two bags belonging to Ms. Savage and Wizkid had been stolen by the airport bandits.

On December 12, 2017, a Vistajet jet with registration number 9H-VFA operated by Evergreen Apple Nigeria (EAN) Limited was robbed on the runway 18R of the airport by bandits when taxiing to the hangar of EAN.

The jet was arriving from Istanbul between 2110-2130hrs when the robbery took place after landing in Lagos.

Bulk passing

There were similar incidents that happened after that. Rather than tackle the issue headlong, FAAN was in denial of the incident.

“It is not possible for anyone to burgle an aircraft in motion. Furthermore, because aircraft are highly technical machines, it is practically impossible for anyone who does not have the requisite training and competence to operate or tamper with the baggage compartment.

“Although investigations are still on-going, FAAN would like to reassure travellers and the general public that with the level of safety and security systems on ground at the airports, it is practically impossible for an aircraft to be burgled within our runways and aprons,” Henrietta Yakubu, spokeswoman said.

Priority

In countries in which the rules governing the safety of passengers are strictly enforced, airport security is accorded the highest priority.

Unfortunately, over here, things are done differently as too many things are taken for granted. Ever since the September 11, 2001 terrorist attacks in the United States, virtually all countries have reviewed and strengthened their airport security apparatus.

Strangely, the domestic airports in particular have continued to do business as usual as if the premises are immune to terrorist attacks that occur elsewhere.

Following the latest embarrassment at Lagos airport, the management of FAAN and other security agencies have been pledging that security procedures will be reviewed and rigorously enforced.

Expert’s view

A former Chief Security Officer (CSO) at the Murtala Muhammed International Airport, Group Captain John Ojikutu (Rtd) advised government to urgently provide funds to build perimeter and security fences at the airports, regretting that no airport in the country has comprehensive perimeter fencing, which exposes them to incursions by unauthorised persons.

He noted that it was the mercy of God that none of the nation’s airports had been attacked by terrorists or other dangerous persons because the security apparatus at the airports cannot prevent access by unscrupulous elements.

“The major problem we have in our airports in terms of security is perimeter fencing. There is no airport in this country that has comprehensive perimeter fence. MMIA, Lagos, is fenced but that fence is open at Ejigbo, Shasha and Ajao Estate areas.

“Anybody can have access to the airport through these places. The security operatives on duty at this airport are at the mercy of God because they cannot monitor every part of the airport.

“We need standard fence. The air-side of the airport is not adequately covered with Close Circuit Television (CCTV) cameras. The security personnel that monitor activities at the airport have only three patrolling vehicles for four terminals, which include the international, the domestic terminal, the general aviation terminal and the cargo terminal,” he noted.

Last line

This appears to be the usual erratic, hurried and haphazard response to a major security incident. The latest pledges will soon evaporate and the country returns to its clumsiness.

Negligent security officials cut corners, solicit bribes. Those who have jobs approach their tasks with sloppy attitude. The safety of air travellers is still compromised by airport security officials with wrong attitude to their job.

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Ihedioha seeks Buhari’s support for infrastructure, agric

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Ihedioha seeks Buhari’s support for infrastructure, agric

Imo State governor Emeka Ihedioha yesterday met with President Muhammadu Buhari behind closed doors at the Presidential Villa Abuja. The Imo state governor said he was at the villa to discuss and seek support of the Federal Government in the development of infrastructure in the state. Speaking to State House Correspondents after the meeting, Ihedioha said that he came to solicit Buhari’s intervention on infrastructure decay in the state. Ihedioha said he discussed with the President on the issue of agriculture and how the state would benefit from the federal government’s agricultural projects.

He said: “We need the Federal Government support in all facets of the economy. Government would need to support us in agriculture because government we succeeded didn’t take advantage of government policies in agriculture.

” So we are working towards agricultural revolution to ensure that that becomes a source of revenue. So we need federal government support in that regard. We need government support in education, we need government support in the area of healthcare, we need government support in area of building institutions. “When I came in I found out to my shock that there were accounts in the number that was reported in the media and of course so much leakages and we were not as a state making significant progress from the IGR.

“The IGR base of the state was very weak and when the IGR base is weak without having a productive economy that obviously meant that we depended essentially from what came from federal allocation and of course other agencies being an oil producing state.

“Like you may have found out in my state was something obviously in the breach of what it should be. It became necessary that we should find a way out and I set up a Financial Advisory Committee and Financial Advisory Committee recommended that in view of where we are and because of our decision to instill a regime of fiscal discipline and a regime of transparency and accountability and of course to reduce the level of corruption in the state, we had to introduce the Treasury Single Account, TSA, which is not very ideal in many places. “But for us we felt we needed to start a new, we needed to confront the issues and begin to reposition our state as a state that will be alive to the demands expected of us by our people.

“When the electorate voted us in, they believe in our ability to come and transform the state, to reign in a regime of transparency and accountability, that is what we are trying to do. So we have done that.

“But apart from that, we are strengthening the Bureau for Public Procurement in the state. If check through the what is the ranking in ease of doing business, Imo finished 34th out of 37 and in several ways we have been lagging behind, we have fallen back, deteriorated from where we used to be. “Ours used to be a very civilized state, so we have a duty and conviction that we need to take it to that level. So we have taken steps, closing the gap.”

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Ikeja Electric deploys N500m 15MVA sub-station

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Ikeja Electric deploys N500m 15MVA sub-station

Ikeja Electric has deepened investments on electricity supply in its network with the deployment of N500 million worth of 15MVA injection sub-station.

Speaking at the commissioning of the sub-station at Obawole, Ifako Ijaiye Local Council Development Area of Lagos State, Chief Executive Officer of the utility firm, Dr. Anthony Youdewei, said that Ikeja Electric would continue to improve services to its customers.   

Manager, Ifako Ijaye Business Unit, Engineer A. Adelakun, said that the investment of N500 million to put the sub-station in place was made based on re-assurance from the community that an outstanding bill of over N400 million by customers in the area would be paid.

He called on the customers to take full advantage of the payment discounts adoption by the company for its over N400million outstanding bills.

The customers led by the President, Obawole Community Development Association, Pastor Samuel Opajoni expressed satisfaction with the management of power distribution company for commissioning the project.

He assured the company of total support by all landlords and tenants at the Obawole community particularly on the payment of their outstanding bills.

In an effort to facilitate debts owed the power industry, the management of Nigeria’s largest electricity distribution company, Ikeja Electric Plc, had earlier announced the commencement of a Debt Discount Initiative for customers under its network.

The scheme, according to the company, which is designed specifically for unmetered Non-Maximum Demand (NMD) customers, was put in place to provide an avenue to support customers, especially those who are financially constrained by the present economic realities.

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Funding ailing refineries with Indian loan

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Funding ailing refineries with Indian loan

The Nigerian National Petroleum Corporation (NNPC) has opened talks with India for loan to, among others, revamp the obsolete refineries in Nigeria, on which multi-billion dollars had earlier been sunk. Adeola Yusuf takes another look at this venture

 

 

The Original Assets Manufacturers (OEMs) of the four refineries in Nigeria have shunned several pleas by the Federal Government for rehabilitation of facilities after NNPC abandoned statutory maintenance of these installations for over 42 years.

Although over N152 billion was reportedly spent on several phony turn around maintenance (TAM), the OEMs, were enraged that their template recommendations of five years interval for maintenance were grossly violated and thus, even though government would pay heavily, they (OEMs) could not venture into a fruitless TAM.

Currently, the Corporation is already pushing for loans from India to revamp these refineries that were once sold to Dangote and other investors in May 2007 but later forcefully retaken from them by government

Although NNPC had, for the umpteenth time promised to make the refineries more productive, the Corporation still swaps over 80 per cent of the 445,000 barrels per day of crude allocated daily for these refineries due to their inefficiency. The Corporation allocated the last oil swap contracts to 15 consortia of 32 foreign and local firms.

Scrutinising the N152bn investments

A report credited to some civil society organisations, alleged that NNPC  committed N152 billion to execute the turn around maintenance (TAM) of four refineries between 2011 to 2013. And this later brought out words from NNPC on the true state of its talk with the original equipment manufacturers of the refineries.

“A decision was taken in 2011 to rehabilitate all refineries, using the Original Refinery Builder (ORB) of each of the refineries,” NNPC said in a statement issued in reaction to the allegation of N152 billion scam levelled by the civil society organisation.

“NNPC, however, made recourse to a new strategy after the ORBs declined participation and nominated some partners in their stead who came up with outrageously unfavourable terms,” the statement read.

“The nominated partners, as sole bidders, came up with humongous price offers after two years of thorough and exhaustive scope of work definition and price negotiations. The proxies were also unwilling to provide post rehabilitation performance guarantees.”

The new arrangement, which kicked off in October 2014, entailed phased and simultaneous rehabilitation of all refineries, using in-house and locally available resources.

The strategy also, according to NNPC, embraced the direct use of Original Equipment Manufacturer representatives to effect major equipment overhaul and rehabilitation. And, it was projected that the new strategy would reduce the cost of the operation by 70 per cent.

Sorry state of refineries

The Nigeria Union of Petroleum and Natural Gas Workers (NUPENG) has described as “ridiculous that for the past 15 years now, Nigerian National Petroleum Corporation had been spending billions of dollars on turn around maintenance of the refineries with nothing to show for it.”

South-West Chairman of the union, Mr Tayo Aboyeji, who disclosed this in an interview, said, “It is disheartening to know that despite the fact that the nation is a major producer of crude oil, it cannot refine the product for its local consumption.

“It is ridiculous that for the past 15 years now, Nigerian National Petroleum Corporation had been spending billions of dollars on Turn Around Maintenance of the refineries with nothing to show for it.

“If all our four refineries are producing at their maximum output, the country will not be spending billion of naira on importation of refined product.

“This is the right time for our refineries to work, the Federal Government should, as a matter of urgency, fix the refineries now,” he said.

Push for Indian loan

NNPC has, however, opened talks with India for fresh credit facilities with promise to sustain the flow of about 176.4 million barrels of crude supply to the Asian country.

The loan is aimed at revamping refineries and other obsolete oil and gas infrastructures in the country.

The loan facilities from India to Nigeria has surpassed $10 billion with $100 million recently offered to information technology sector. Indian High Commissioner to Nigeria, His Excellency Abhay Thakur, said on Thursday that the management of NNPC deserves fresh financial supports “for the recent renewal of the crude oil term contracts for three Indian companies.”

Speaking when he paid official visit to the new Group Managing Director of NNPC, Meke Kolo Kyari, at the Corporation’s headquarters, Thakur sued for increment in the crude oil supply in view of the increasing energy needs of India.

“India is prepared to offer Nigeria and particularly the NNPC a credit line mechanism to help her in the areas of refinery maintenance, construction, security, surveillance and anything possible. Our expertise in Information Technology (IT) is available as well. We are ready to cooperate with NNPC to boost our bilateral relations,” Thakur asserted.

Meanwhile, NNPC has expressed readiness to continue to supply 10 per cent of India’s crude oil demand in the face of competing demand for the product from other countries.

The Group Managing Director of the NNPC, Mallam Mele Kyari, told the visiting Indian High Commissioner, according to a press release by the corporation’s Group General Manager, Group Public Affairs Division, Mr. Ndu Ughamadu, that Nigeria, through the corporation, would continue to support India’s energy security.

Total oil imports by India in 2018, according to statistics from the country, stood at 251.93 million metric tonnes.

While 1 mt is approximately equal to 7 barrels, the 25.193 million mt, being the 10 per cent of 251.93 mmt equal to 176.351 million barrels of crude oil.

The MoU for energy security

Kyari added that the recent Memorandum of Understanding (MoU) in the area of energy between Nigeria and India would be consummated to further strengthen the bilateral relations between the two countries.

Mallam Kyari stated that NNPC was desirous of growing the energy cooperation with India and that it was time to progress from just talking to walking the talk.

He said India was a very important market and that NNPC would ensure that the current volume of crude oil supply from Nigeria to India is secured for the collective interest of both countries.

“We are ready to have a robust engagement with the Indian trade team to provide a win-win energy scenario between us. Every trade opportunity that is available will be fully explored,” Mallam Kyari posited.

He averred that there were lots of untapped investment opportunities in the nation’s Liquefied Petroleum Gas (LPG) and expressed the willingness of NNPC to aggressively improve LPG infrastructure and consumption in the country.

Earlier, the Indian High Commissioner also congratulated Mallam Kyari on his appointment as the Group Managing Director of NNPC, noting that the confidence placed in him was well considered for national interest.

Last line

The refineries have continued to drain Nigeria’s resources and to get a loan for them will amount to sheer waste of resources. This is especially because private refineries especially the 650,000 barrels of oil per day Dangote refinery are coming on stream.

While efforts to secure credit facilities are not against economic terms, the proceeds of such ventures should be discouraged from being spent on ailing installations that had over the years showed no sign of improvement.

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NLNG, LCCI seek solutions for Nigeria’s power challenges

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NLNG, LCCI seek solutions for Nigeria’s power challenges

Nigeria LNG Limited and the Lagos Chamber of Commerce and Industry (LCCI) have called for more efforts in finding solutions to the crippling power challenges in the country.

The pair also sought exploring other energy sources and cashing in on new ideas that will help Nigeria become energy efficient.

The calls were made at the Business Interactive Session on Innovation in Electric Power Solutions at the LCCI head office in Lagos.

The business session featured the 2018 winner of The Nigeria Prize for Science, Dr. Peter Ngene. The 2018 winner of the Nigeria Prize for Science clinched the prize based on his work, “Nanostructured metal hydrides for the storage of electric power from renewable energy sources and for explosion prevention in high voltage power transformers”.

The Nigeria Prize for Science is a $100,000 award sponsored by NLNG to promote innovations in science and technology that will solve age-long problems and drive development in Nigeria. The prize is awarded annually.

In her remarks, the General Manager, External Relations and Sustainable Development, Mrs Eyono Fatayi-Williams, said the interaction session was as a result of The Nigeria Prize for Science, which is increasingly shedding light on solutions to some of the nation’s problems that include electricity shortage.

She stated that in recognition of the need to encourage more work in finding solutions to electric power generation in the country, NLNG used the science prize competition in 2018 to encourage research works on the theme of that year’s competition – Innovations in Electric Power Solutions.

She remarked that a renewed focus on electric power generation and conservation is definitely one area, which can offer huge business opportunities in the country, calling on the industry to focus on renewable sources of energy to improve the Nigerian situation, promote better energy output as well as align the country with the global clamour for cleaner energy sources, as the world fights global warming.

“NLNG has the vision of being a global LNG company, helping to build a better Nigeria,’ she said. “We have been driving that vision through our numerous CSR initiatives across the country and especially in our host community, Bonny Island, where we provide over 95% stable electric power supply for over a decade now. It will be a great achievement if this be can replicated. We believe the country has the resources but we need the industrial will-power by the private sector to make it happen, even if it happens gradually”.

In his speech, the President of Lagos Chambers of Commerce and Industry (LCCI), Paul Ruwase, said there was an urgent need to change the narrative and focus on innovative ideas that can enable practical solutions.

He added that the theme of the interactive session provided a platform for reshaping the mind-set of Nigerians, helping to champion the birth of new ideas and practical ways to make the power sector work, as it should in order to promote the country’s economic development.

According to Ruwase, “Reforming the power sector in Nigeria must align with the global energy direction of increasing renewables in the energy mix. Dr. Ngene’s award-winning work further presents an opportunity for Nigeria to harness new discoveries in solving her power supply challenges. His invention has positive implications on renewable energy development that the country can benefit from. It is believed that Dr. Ngene’s work will expand the energy market in Nigeria with efficient energy storage.”

Dr. Ngene, in his presentation, titled “Nanomaterials for Energy and Power Application”, highlighted the potential of his work in the area of storing hydrogen, storage battery for renewable energy and detection of hydrogen leaks in transformers to prevent explosion. He said explosion in transformers was one of the major causes of power outages in Nigeria, adding that through Nanotechnology, a cheap way of detecting hydrogen to eliminate such explosions is possible.

He remarked that energy storage was the main challenge in the use of renewable energy sources. He added that his work provides opportunities for efficient energy storage, making cheap and affordable rechargeable batteries for rural areas, for novel sensors for Diabetes, for conversion of carbon into useful fuels and for use in cooling homes with less energy consumption.

Professor Barth Nnaji, a member of the Nigeria Prize of Science Advisory Board, in a brief remark said that Nigerians need to think about the profoundness of the breakthrough by Dr. Ngene. He stated that the private sector was where the country can get mileage in transforming ideas and innovation into reality. He enjoined the private sector to follow the footsteps of NLNG, as it is very critical in the support of Research and Development in the country.

Ngene, is an assistant professor in the Inorganic Chemistry and Catalysis group of the Debye Institute for Nanomaterials Science, Utrecht University in The Netherlands. He is the recipient of the prestigious KNCV (The Royal Dutch Chemical Association) Van Arkel best PhD thesis (2012/2013) award, and the chair of the 2013 Gordon Research Seminar (GRS) on Metal-Hydrogen system in Italy. He was also recently recognised as one of African leading young scientists by the award of the prestigious NEF (Next Einstein Forum) fellowship by the Chairman of the African Union (President Paul Kagame).

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Lagos tasks residents on housing investment security

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Lagos tasks residents on housing investment security

Permanent Secretary of Lagos State Ministry of Housing , Mr Wasiu Akewusola, has called on community leaders and residents of adjourning properties to assist in securing government’s investment in ongoing housing projects in the metropolis.

Besides, he assured residents that the state government  had renewed its vow to deliver on its promises in the housing sector in spite of the setbacks caused by vandals.

It was discovered that some of the vandals carted away fittings from some ongoing housing projects in the state.

Speaking during the ministry’s  inspection of ongoing housing scheme in Ibeshe, Igbogbo, Agbowa, Odo Onosa and Ayandelu, the permanent secretary asserted that  “Lagos State’s  commitment to meeting the housing needs of the people is non-negotiable.

We will continue to forge ahead in delivering on our mandate in spite of setbacks, especially the looting of some of the projects by miscreants.”

According to Akewusola, security of  housing schemes constructed with taxpayers’ money should be a joint venture between the people and government.

‘’The policing of these housing schemes that are yet to be delivered is best done by the immediate communities because of proximity and superior knowledge of the terrain,’’ he opined.

Akewusola decried a situation, whereby uncompleted houses are  vandalized through removal of fixtures and transformers cannibalised and electric poles removed in some schemes.

He also raised the alarm that some criminals had embarked on illegal sand digging activities in some ongoing projects around Ikorodu, thereby endangering the stability of  land in the area.

‘’Extensive illegal sand digging activities are being perpetrated by some people in Igbogbo 2B Scheme, thereby damaging the land,’’ he disclosed.

Akewusola lamented the economic loss to be incurred as a result of the untoward activities of miscreants and the attendant  setback.

He enjoined community leaders and residents to take interest in the vigilance and surveillance over these schemes by offering information to security agents.

“Please  make immediate report of any suspicious persons or unlawful incident to the police or any other government security agents,” he appealed.

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Building collapse: Stakeholders demand emergency in housing sector

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Building collapse: Stakeholders demand  emergency in housing sector

Worried by  the incessant incidents of  building collapse in Nigerian cities, experts are demanding urgent declaration of emergency in housing sector. Dayo Ayeyemi reports

 

Jolted by recurring collapse of buildings in the country, built environment stakeholders are calling on the Federal Government to declare an emergency in the housing sector.

The  latest demand is  hinged on the alarming incidents, which occurred in quick succession in Lagos, Plateau, Ebonyi and Delta states in less than two weeks respectively.

Describing  the latest happenings as “national embarrassment,” First  Vice President, Nigerian Institute of Building (NIOB), Mr. Kunle Awobodu, said government should declare an emergency in the housing sector due to frequent collapse of buildings.

He said the demand was a consensus  among stakeholders under the auspices of Building Collapse and Prevention Guild.

According to him, their worry stemmed from the fact that incidents  of building collapse were no longer limited to Lagos state, but gradually spreading to other states.

He said: “Building collapse  is not limited to Lagos alone; it has spread to states  where we used to believe  they have solid grounds.”

With the latest incidents, Awobodu said there was fear of instability within the built environment, adding that foreigners, who have been coming to Lagos Island to do business and shopping have been   expressing fear of insecurity.

Blaming the incident on both home builders and government, the NIOB boss maintained that lack of respect for regulations was responsible.

“Where  regulations are not respected, most of the buildings under construction will collapse,” he said. 

He alleged that government was in the habit of not putting square pegs in square holes.

Awobodu said the frequent collapse questioned built environment professional expertise, adding that it did  not portray their  image well.

However, he said the menace of building collapse  had presented a challenge that will make built professionals double their  efforts.

“We will increase pressure on people in physical planning to ensure that due process is followed,” he said.

Building failures

About two weeks ago,  14 persons were reported dead and four others severely injured in a collapsed three-storey building in Delimi Community of Jos North Local Government Area of Plateau.

The three-storey building belonging to Rufai Kabiru collapsed in the late hours, killing its owner and others.

Also last week in Abakailiki, Ebonyi State, guests at the Metro View Hotel in Abakaliki, Ebonyi State capital, narrowly  escaped death  as a wing of the hotel caved in.

Located close to Presco Campus of the Ebonyi State University College of Medicine and Health Science, the guests were  outside the building for a seminar when the incident happened.

A member of the hotel management, Austine Orji, told journalists  that the company had noticed a crack on some sections of the building three days earlier, adding that the company had initiated a concrete reinforcement before the building collapsed.

In Lagos, two persons were rescued penultimate Sunday after a storey building under renovation collapsed at No. 36 Adesanya Street, Mafoluku, Oshodi, Lagos State.

The incident occurred barely two weeks after another had collapsed in the Magodo area of the state.

The building was being secretly renovated to avoid being marked by officials of the Lagos State Building Control Agency.

Also, a three-storey building collapsed in Delta State at the weekend. All these are coming in less than four months a five storey building caved in on school children at Ita-Faji area of Lagos Island Central Business District, and barely one year  Nigeria lost nothing less than eight buildings  to  structural failures.

Between August 2018 and March 2019, five incidents of collapsed building occurred  in quick succession in three  states and Abuja, the Federal capital Territory (FCT).

Experts’ views

Speaking with New Telegraph, a former President of NIOB, Mr. Chuks Omeife, said that the current downpour in major cities had exposed certain inadequacies in  some structures.

He pointed out that until the missing link in building approval and construction processes is fixed, buildings would continue to cave in.

Contrary to others’ views, he stated that the major issue responsible for building collapse  was not about planning approval, but the missing link.

According to him, the missing link is to ascertain that qualified professionals are engaged  in the building construction process immediately planning approval is granted.

He said there was need for a document that detailed the professional/clients, to  accompany building drawings for planning approval.

“The fact that at the point of building project execution, no one is there to ensure that  the right professional is involved is the missing link,” he said.

He stated further that the major gap was in the fact that the approval officials did not  follow up on building owners.

Suggesting ways out of the woods, Omeife said that building owners must be compelled by law to ensure that professionals are involved in the project’s execution.

“Buildings don’t collapse on paper; government must ensure there  is a document to be used to regulate how building construction should be done,”  he said.

Citing Abia, Akwa Ibom states examples, the former NIOB boss said government had made a law requesting for additional drawings detailing the work and profile of the professionals involved.

“These  states are taking the initiative about drawing to build. If there is any collapse, the builder could be arrested,” he said.

Above all,  Omeife  said the National Building Code should be reinforced.

Giving update on Jos incident, a former Director-General, Nigerian Building and  Road Research Institute, Proffessor Danladi Tambowal, said that Governor Lalong had started demolishing structurally defective houses in Jos.

As at the last count, according to him , 25 structures have been demolished already.

Last line

All hands should be on deck to put an end to menace of building collapse in the society.

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Aviation’s input to GDP may rise to 4%, says ART President

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Aviation’s input to GDP may rise to 4%, says ART President

Nigeria’s aviation industry has the potential to contribute four per cent to the country’s Gross Domestic Product (GDP) from the paltry 0.1 per cent it currently remits to the Federation account.

President, Aviation Round Table (ART), Dr. Gabriel Olowo, disclosed this to New Telegraph at the weekend in Lagos.

He lamented the lack of patronage of airlines by many Nigerians, noting that less than 10 per cent of the 200 million people take to air travel, describing it as not impressive.

He cited smaller countries such as United Arab Emirates and Singapore, which are far less the size of Lagos State recording over 50 million passengers because of the deliberate policies to make their airports hub of aviation.

He recalled that in 2015, the Aviation industry supported 254,500 jobs and contributed $940 million (N184.7 billion) to national GDP.

He said of this sum, 49 per cent ($462 million or N90.8 billion) was a direct output of the aviation sector, while 51 per cent constituted indirect jobs via the supply chain.

His words: “Hostile investment environment and the absence of industry developmental policies, among other challenges, the airlines are in dire strait. The Nigerian airspace presents itself as a shorter route for aircraft traveling to the American continent from Asia.”

It is often the bride of most international airlines. However, Nigeria aviation sector is full of bottlenecks and delays that are designed to exploit and strangle the growth of the industry.

Olowo stated that additional $464 million (N91.2 billion) is derived from tourism, which raises the overall contribution to $1.4 billion (N275.9 billion), stressing that in 2010, total 8.3 million passengers contributed 0.4 per cent. 

He noted that the carriers are bedevilled by high cost of aviation fuel otherwise known as JET A1; high and multiple taxes, ageing fleet and underutilisation of aircraft among others.

He said that most airline operators in Nigeria spent about 40 per cent of their operation costs on aviation fuel, adding that sometimes it goes beyond 40 per cent.

The Federal Government could intervene in the issue by reviving the Warri refinery, Atlas Cove and Mosemi pipelines –hydrant system used to supply aviation fuel.

Operators argued that the pipelines that supplied aviation fuel to the airport before it was shut down by the late General Sani Abacha-led military regime in January 1996, were fully functional.

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How to develop 4m housing units in 4 years, by stakeholders

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How to develop 4m housing units in 4 years, by stakeholders

Apparently worried by increasing accommodation challenges among Nigerians, some concerned affordable housing advocates have mulled fresh ideas to deliver four million houses in four years.

Throwing themselves in for the housing challenge and solution, they sought from the Federal Government an Executive Order or legislation backing them to build special estates across Nigeria.

Challenging the status quo on the Affordable Housing Development Advocacy Group’s platform, Principal Partner at Novone Consult Limited, Mr. Ezekiel Nya Etuk, an architect, demanded that the authority should allow them take charge of the housing ministry for four years to deliver the four million housing mandate.

“Give us the Ministry of Housing to ‘run’ for four years. Don’t pay a dime, not even for my ‘aides’. Approve Presidential Executive Order, or better still, legislation for special estates. In return, we will deliver four million homes in four years in the first instance,” he said.

On how to achieve this, he explained that his team of professionals would set up a consortium of select stakeholders in the industry, adding that based on a special legislation, it would deliver the said mandate with no cost to government, yet with handsome profit.

On what he needed legislation for, he stated that the legal backing would enable the team to build special estates.

The main aim of the whole concept, according to Nya-Etuk, was to address the issue of lump sum deposit for houses, which he said would never work in the country on a scale that would make appreciable impact in addressing our humongous housing deficit.

He stated that unless there was a decisive policy that compels people not to default on their mortgages and hope to get away with it, investing in mass housing would remain ‘talk’ as “no one will deploy his/her often high interest borrowed funds, or even hard earned resources only for another to get comfort in endless court foreclosure frustration.”

According to him, the estates would be run as rental apartment, adding that payment would be on monthly basis.

He said: “Any defaulter will be given only two weeks of grace to make good his monthly commitment, or be evicted with no option of legal gymnastics.

“The estate police move the defaulter’s property in the apartment into a warehouse for a maximum period of 30 days and thereafter auction them and deposits whatever is the proceeds in the tenant’s submitted account.”

Going by the above measures, Nya-Etuk is of the opinion that with the enormous market potential, investors, who would be assured of their proceeds, would flood the ministry.

On land acquisition for the project, he said the team would partner state government to deliver the house.

He said: “I have been involved severally in getting lands from government. What is responsible for the seeming present reluctance of state governments to give out more lands is the understandable frustration of governors that keep giving choice lands to the Federal Government without seeing the houses.

“With this arrangement, and with the state governments as strategic partners, we will be wondering what to do with lands as the workers will be the direct fire on any governor that decides to prove difficult. The ministry staff will be fully utilized and will enjoy enhanced pay.”

Nigeria has 17 million units housing shortfall,and would need to build one million houses yearly for next 20 years to bridge the deficit. Currently the nation is building  less than 100,000 housing units annually.

Managing Director, Ace Hi-Teck Construction Company Limited, Adewunmi Okupe, corroborated Nya Etuk, saying the nation needed peculiar solutions to housing challenge, calling for inclusion of cooperative funding.

Cooperative funding, he said could be revolved for as long as desired.

Such funds, he said, could take care of long term lending at even six per cent per annum because they came in at near zero percent.

Okupe said: “Providing access to one million up-takers every year consecutively for four years is not as tall an order as you imagine. It is very doable if we shift our focus away from conventional efforts that have failed us repeatedly over the years.”

However, another affordable housing advocate, Ali Magashi, picked hole in the entire model, saying “the rule of thumb said it typically took an average of 20 years for rental payments to pay for the cost of land, infrastructure, development and finance”, noting that there was  no construction finance that exceeded five years.

He said: “So there’s a mismatch in the proposal. Only institutional funds (pension, insurance and life funds) can wait for such gestation period, and unfortunately, institutional funds don’t invest in housing development because of the attendant default, construction and investment risks; they typically invest in debt securities, preferably collateralized debt securities (mortgage backed securities and mortgage bonds).”

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