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Nigeria must do away with fuel subsidy –Comrade Akinlaja

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Nigeria must do away with fuel subsidy  –Comrade Akinlaja

Former chairman, House Committee on Petroleum Resources (Downstream) Hon. Joseph Akinlaja is a veteran labour leader who rose to the top echelon of the National Union of Petroleum and Nature Gas Workers (NUPENG ) and highly knowledgeable on issues in the oil and gas sector. In this interview with ONWUKA NZESHI, the parliamentarian shares his thoughts on the resurging subsidy controversy and the fuel tanker armada on the Apapa/Oshodi Expressway, Lagos

 

The controversy over the payment of subsidy on petroleum products has bounced back again following the alarm raised by the former Central Bank of Nigeria, governor Sanusi Lamido that the Federal Government spent N1.5 trillion on subsidy scheme which he described as fraudulent. What’s your view on subsidy regime in Nigeria and what do we do about it?

Well, I will like to confirm that subsidy exists in Nigeria. I’m saying this because there have been so many theories on it over the years. Some people say there is no subsidy while others say that our fuel should not sell more the N45 per litre. A lot of theories have been propounded both by people who know and people who don’t know but just assume.

Officially, subsidy existed in budgetary terms up to year 2016 but later the Federal Government said there would be no more subsidies. So the government was no longer bringing budget items specifically for subsidy to be appropriated by the National Assembly.
It went on to increase the pump price of petrol to N145 per litre on the premise that there would be no subsidy any more. But they forgot that we are not in control of two critical factors which determine the price of petroleum products, namely: the price of crude oil at the International market and the exchange rate of the Naira to the Dollar.

So by the time government increased the pump price to N145, it was saving money because the crude oil price vis- a- vis the foreign exchange did not add up to N145 per litre. They never believed that those factors would ever work together above N145 per litre. But one and a half years after the pump price was raised to N145 per litre, landing cost of the imported Premium Motor Spirit (PMS) rose beyond their expectation.

We’re talking about petrol because as you know, diesel is deregulated. As for Kerosine, we don’t know whether it is deregulated or not because there has been no clear-cut policy on it. It is market forces that have been controlling the price of Kerosine.

So we’re talking about PMS which is widely and heavily consumed by Nigerians. Your ‘I Better Pass My Neighbour’ generator and your small and medium scale industries use petrol engines much more than other engines to power their activities.

At the peak of it in late 2017 and early 2018, there was heavy fuel scarcity and my committee, as the Chairman, House Committee on Petroleum Resources (Downstream) and my counterpart in the Senate went round to find out the reason for the fuel shortage.

We invited stakeholders including the Nigerian National Petroleum Corporation (NNPC) to a public hearing. The NNPC and the Minister for Petroleum Resources, Ibe Kachikwu told us that landing cost at that time was N171.20 per litre and the pump price was still N145 per litre then asked: ‘Who is bearing the cost of N26.20 per litre of petrol consumed in Nigeria? They said it was under-recovery but somebody was and is still picking that bill. Definitely, it is not the consumer. It is any of the agencies representing the government that is picking the bill till today.

 

So the Emir of Kano (Sanusi) being a former Governor of Central Bank of Nigeria (CBN) and an economist knows or should know the situation. That is why occasionally, he comes out with such things that some people consider controversial.

 

 

This subsidy controversy has lingered for so many years. What do you think is the best way to resolve it?

As someone who has been at the top echelon of the National Union of Petroleum and Natural Gas Workers (NUPENG), I have dealt with this matter over the years. I was the Deputy General Secretary of NUPENG under Chief Frank Kokori and when he retired, I took over as General Secretary.

As Deputy President of Nigeria Labour Congress (NLC) under Adams Oshiomhole, we fought against the removal of subsidy. We were acting on behalf of Nigerians because we asked ourselves: ‘What benefit would Nigerians derive from this God-given resource if they should be made to pay exorbitant price for Petrol?’

We fought that the refineries should work and we formed the Petroleum Products Pricing Regulatory Agency (PPPRA) as part of the fight. Unfortunately the PPPRA failed to regulate anything because it is also overwhelmed by the inter-play of market forces.
However, with benefit of hindsight, I have now realised that in Nigeria, we do not have the discipline to operate any subsidy.

 

Why do you think so when subsidy operates in other countries?

The developed countries also subsidise products. America subsidises agriculture. When the farmers have produced, government through commodity boards buys it, processes and preserves it until when they would either export it or release it to the market for local consumption.
The essence of buying it off is to relieve the farmer burden of preserving these produce and enable him to have money to go back and farm the following year.

But in our own case, the tomato will get rotten in the farm because the farmer does not have the wherewithal to preserve the produce. He has to look for a buyer; he has to look for a transporter to convey his produce to the markets and he doesn’t have the money to do all these things before the good perish in the farm.

In this country, during the Murtala/Obasanjo regime, which dove-tailed into President Shehu Shagari’s regime, there was what we called essential commodities. It was basically a subsidy of basic food items such as salt, milk, tea, sardine and others. These commodities were sold at subsidized rates. What happened to it? Middlemen took over the distribution chain and by the time these commodities get to the real consumers, the ordinary people, it had passed through many hands and the price had gone beyond the reach of the poor. So those targeted by the essential commodity did not benefit from it and the scheme collapsed.

 

What exactly makes fuel subsidy a challenge in Nigeria?

The Oligarchy and the Cabal, these are some of the names coined to show what is happening in the place. Up till now, we have not been able to resolve the controversy surrounding how much subsidy Nigeria pays on fuel daily. The government has its own figure and marketers have their own figure. There has to be reconciliation every day.

Today, no oil marketing company can import petrol except the Nigeria National Petroleum Corporation (NNPC). Why? NNPC gets an allocation of 445,000 barrels of crude oil per day for local refineries that never work up to maximum installed capacity. Therefore whatever remains, NNPC has to swap it with refineries outside Nigeria to be able to import petrol. This is where the subsidy lies now. Otherwise, there would have been fuel scarcity all over the country.

 

 

Why are the major and independent marketers no longer importing fuel?

They cannot bring it at the landing cost above N145 per litre and still sell at N145 per litre. It does not make good business sense to continue investing money on a business you can only incur losses. With the benefit of hindsight, with the fact that we do not have the discipline to honestly operate a subsidy regime, subsidy should be removed. But, who will bell the cat?

Nigerians have been so much pauparized that even if a policy is working against their interest, they will resist its removal.

 

Was the Jonathan administration right when it attempted to remove subsidy on petrol in 2012?

Yes, we ought to have allowed him to remove subsidy at that time because the decision he took was right. I was one of the few legislators that said that we should remove subsidy at that time. If you go to the Hansards – records of parliamentary proceedings, you will see it there.
For many years, people have been importing petroleum products and making huge profits from the business.

It was these fuel importers that killed the local refineries. There is no incentive to make the existing local refineries work or to build new ones.

While we were stuck on fuel importation, Ghana bit the bullet, they deregulated and their Tema Lube is working. The Tema Lube, their refinery was built in 1965 by the Anglo Dutch multinational – Shell BP, same year the same company built our own refinery in Port Harcourt. The irony is that while the refinery in Ghana is still working, ours has gone comatose.

Their own refinery refines petrol and also produces lubricants and started functioning even before oil was discovered in Ghana.

 

What is the implication of Nigeria not encouraging local refining of crude oil?

We are exporting jobs offshore because our crude oil is being refined offshore. We are creating jobs for those countries where we go to refine our crude oil.

 

 

Why didn’t your colleagues in the parliament, the opposition, labour unions and the civil society heed your counsel in 2012?

It is because at that time, subsidy had become a political issue. It had become political so much so that the opinions of genuine people, like we were in the trade unions, did not matter any longer. Some beneficiaries of the ill-gotten money from subsidy payments were fuelling the fight against deregulation. Those who are still fighting against removal of subsidy are an admixture of genuine patriots who believe they are fighting for the poor masses and the pseudo -patriots who are beneficiaries of subsidy.

 

 

Many Nigerians including your colleagues   in the Labour movement have always demanded that before subsidy can be removed, our local refineries must be fixed and working. How do you see this argument?

Yes. It’s a good argument but who will make the refineries work? It is the people that have the wherewithal but they are either the importers or agents of importers.

 

Are you satisfied with the way NNPC has turned itself into a monopoly in the business of fuel importation?

I won’t blame the NNPC because it is a responsibility that has been entrusted on it. They did not create it. If the NNPC had not taken up that responsibility on itself, fuel would sell at N250 or N300 per litre on the street. You know what happens during fuel scarcity, sometimes it sells as much as N400 per litre. They will carry fuel in jerry cans and stand along the road to sell both genuine and adulterated fuel. At that time, your driver will be sucking fuel with his mouth forgetting that this fuel contains lead which kills instalmentally.

It is a government policy that made them sole importers of fuel and they are the only one who can do it. Why? It is not their money; it is Nigeria’s money and they are playing this role to prevent fuel scarcity.

 

Why did the NNPC that has four refineries leave them to rot away instead of fixing them?

Up to 1987, our refineries were working at almost installed capacity. Why? Those who built the refineries and the government had a programme that they must train Nigerian engineers on how to maintain and service it. The agreement was for the refineries to undergo a Turn Around Maintenance (TAM), once in two years and Nigerian engineers were doing it. All they needed to do was to import the parts and fix it.

But then, another government policy came to be awarding it as a contract. They awarded the TAM contract for Kaduna Refinery to Total. We now had a French company coming with French technology to come and maintain a facility built by Chiyoda, a Japanese company.
They abandoned Chiyoda that built it. So government policy is one of the problems.

The second reason is what I’ve told you earlier. When people make commission from importation, it will be difficult to stop them. If you ask NNPC till tomorrow whether they are making money out of the fuel importation, they will deny and there is no way you can catch them. You can only catch them by the elbow and they will simply stretch their hands and walk away. If you make the refineries work, where would the importers make their money from? I am told that those who sell gun- powder will not allow war to end. If war ends, their business will be adversely affected.

So the matter of some people profiteering from fuel importation remains in the realm of speculations. The one that is real is that the Turn Around Maintenance (TAM) that is supposed to be done once in two years is not done some times for ten years and by the time they come to do it, a lot of parts had been damaged and it becomes story! Story!! Story!!!

 

We will ever get out of this quagmire?

We will, if we are willing to get out of it. I thought that with the personality and character of President Muhammadu Buhari that he would be able to do it in his first term of office, but then that did not happen. Perhaps it is because he is no more a military head of state and he is operating under a civilian atmosphere and he must work with people.

Some of these people ensured his victory, so when he is fighting, he will be fighting from all fronts. You know he can’t fight alone.

If the government is ready for us to leave this situation and everybody cooperates with the government, we will get out of it.

 

Has the National Assembly done enough to get Nigeria out of this problem?

Yes, I will say we tried during the period I was there. What’s the evidence? The evidence is that the 8th National Assembly initiated bills on the various reforms required in the petroleum industry. It is a private member bill, initiated from the National Assembly to try and cure a malady that has trailed the Petroleum Industry Bill (PIB), an executive bill that has been in the parliament for more than a decade.

From my own observation, various conflicting interests still bugged the private member bills down. One of them, the Petroleum Industry Governance Bill (PIGB) which we concluded, passed and transmitted to the President was returned to us with some observations. We addressed the observations for the thing to be on its way back to Mr. President for assent and then we left.

It took us three and a half years to pass the Petroleum Industry Bill (PIB) which we had to split into four parts namely, Governance, Host Community, Fiscal and that’s why I said that if we are willing we can get it done.

We needed to capture the interests of the various stakeholders including the federal government, host communities and International Oil Companies (IOCs), because nobody will give you their technology unless you also take care of their interests.

This drilling of oil is not a thing you use a hoe and digger; it is technology and somebody owns it. So his interest is important before you become self sufficient to be able to take it over. You who want to take it over must make some concessions because technology transfer is theory. You either acquire it or you steal it. Countries that believed they can have done it and I think we too can do it, if we are willing.

 

Some Nigerians have argued that conflicting regional interests is a major factor why the PIB has remained a proposal for several years. Do you share this view?

No! The one that I can say may have affected the PIB is the host community interests and that is why we had a separate bill to address those community interests. If you are talking about the North vs. South, the issues of ownership of oil; that has been addressed by the concession for increased oil exploration in the North. What is affecting the bill is conflicting interests between the government and the host communities, who are demanding for more than what they have been getting before. The IOCs also believe that they have the technology and if they have the opportunity to cheat us, they will not hesitate to do so. There are all sorts of interests but unless the government which is the overall driver is focused and ready to step on toes and the toes they step on are ready to nurse the wound and allow things to move forward, we won’t go anywhere with the bill. This is why we are where we are today.

 

What is the implication of our inability to get this bill passed and signed into law?

Let me tell you the danger in it. I am sorry for myself as a parliamentarian and Nigeria as a whole because while we were in this motion without movement, the consultants that were working along with us have taken the issue beyond our shores. What they prepared for us has found its way into the hands of other countries such as Ghana and Angola. They just looked at it, dusted it, adopted it and signed the bill into law while we are still arguing here. Don’t forget that capital is a coward, it goes to places of least resistance. The investors have moved to Ghana, Angola and other places.

At the peak of the oil industry while I was there, we had thirty two drilling rigs operating onshore, swamp, offshore and deep waters. Today, we have only seventeen rigs. So why we were still hesitating, others are moving.

Don’t also forget that many years before now; we did not have more than four oil producing countries in Africa. Today, they are more than eighteen and the IOCs have choices.

You could see how they are divesting from Nigeria. ExxonMobil recently said it was going to divest; Shell has already divested; Total Upstream has divested part of its investments in Nigeria. These are the consequences of not having a clear policy direction and legal framework.

 

The gridlock in Apapa, is a fallout of the policy on fuel importation and the presence of the fuel depots in the vicinity of the Lagos ports. What is the solution to the gridlock?

Well, our problem is an integrated problem and it is still a policy somersault problem. At the beginning of downstream sector of the oil industry in Nigeria, there were only seven systems. The Esso, Total, Shell and others. They were seven and they all had their depots at Apapa. They had parking spaces for their vehicles.

When the industry developed, there were increased activities and the government started building a network of pipelines to convey fuel to different parts of the country. When the pipelines came on stream, oil activities shifted away from Lagos to the twenty two PPMC Depots across the country.

Trucks could now load fuel from Calabar, Benin, Enugu, Jos, Makurdi and all the other strategic depots and Apapa became empty.

Immediately, pipeline vandalisation started and the integrity of the pipelines became compromised. At the same time, the refineries had stopped working at maximum capacity and importation started in full swing.

The policy of Nigeria being in the commanding heights of the downstream sector led to the building of more strategic depots.

During the building of strategic depots, starting with WAWABECO , Tincan Island and later ASCON and Zenon.

As NUPENG, we put up a battle with the Lagos State Government during which we advised them not to allow any one build depots with parking space for tankers. There was nothing that I did not do because I was directly in charge of tanker drivers. I even made an analogy that it is only in Nigeria that I see people building supermarkets without parking space, hence while you are shopping inside the supermarket, LASTMA is toying away your vehicle parked on the road.

In civilized climes, parking space is often bigger than the supermarket itself and that’s why they make the supermarkets skyscrapers.

We picketed several depots and took over the Ibru Depot by force for tankers to go and pack there. They sold every inch of the land; the Ministry of Physical Planning approved and every inch of the place was depot. So where will the tankers pack?

Now the integrity of the pipeline did not allow fuel to go through the pipelines, therefore almost all tankers must come to Lagos. Where do they have the facility to import? It is only Atlas Cove because it has the capacity to receive vessels conveying 30,000 tons of fuel. The other depots are in shallow waters. So from Atlas Cove, they pump fuel to Ejigbo and to the private depots. Everybody will leave Kano, Kaduna, Gombe , Maidiguri and other places to come to Lagos to lift fuel.

When this was happening, Gen. Abdulkareem Adisa was the Minister of Works and Housing and he ordered that all vehicles packing under the bridge to leave . We told the tanker drivers, run for your dear lives. It was during the military regime. We told them to go to Ogere and stay there until it is your turn to load fuel.

Then there was fuel scarcity and Adisa called me to find out what was responsible. So I told him how his order to tankers caused the scarcity. He then asked for a way out.

I told him there can be only two solutions: Relocate the depots to Ikorodu, Ekpe or Ijebu -Ode and the tankers will go there.

He said we cannot remove those depots. I said then, what do we do? I gave him the second solution which is looking for a large expanse of land to build a park for these tankers because if you don’t want them to pack under the bridges then you must provide an alternative place.

We now got an expanse of land in Orile but the place is in a swamp. It is only the government that can get a construction firm like Julius Berger to sand fill the place and construct a park as a social service. That place can contain 2,500 tankers and if you move 2,500 tankers out of Apapa leaving only those that are ready to load, you would have solved the problem.

 

 

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Energy

Saudi Aramco prices shares at top of range in world’s biggest IPO

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Saudi Aramco prices shares at top of range in world’s biggest IPO

State-owned oil giant Saudi Aramco’s initial public offering (IPO) will be the biggest in history, but will fall short of the towering $2 trillion valuation long sought by Crown Prince Mohammed bin Salman.

Aramco priced its IPO at 32 riyals ($8.53) per share, the top of its indicative range, the company said in a statement, raising $25.6 billion and beating Alibaba Group Holding Ltd’s (BABA.N) record $25 billion listing in 2014.

At that level, Aramco has a market valuation of $1.7 trillion, comfortably overtaking Apple Inc (AAPL.O) as the world’s most valuable listed firm. But the listing, expected later this month on the Riyadh stock exchange, is a far cry from the blockbuster debut originally envisaged by the Crown Prince, reports Reuters.

Aramco did not say when shares would start trading on the Saudi stock market but two sources said it was scheduled for Dec. 11.

Saudi Arabia relied on domestic and regional investors to sell a 1.5% stake after lukewarm interest from abroad, even at the reduced valuation of $1.7 trillion.

Demand from institutional investors, including Saudi funds and companies, reached $106 billion, while retail investment’s demand hit $12.6 billion.

Around 4.9 million Saudi retail investors have bought shares in the oil giant, including 2.3 million aged between 31-45.

Aramco’s advisors said they may partly or fully exercise a 15% “greenshoe” option, allowing it to increase the size of the deal to a maximum of $29.4 billion.

The pricing comes as the Organisation of the Petroleum Exporting Countries (OPEC) is gearing up to deepen oil supply cuts to support prices, provided it can strike a deal later this week with allies such as Russia.

Climate change concerns, political risk and a lack of corporate transparency put foreign investors off the offering, forcing the kingdom to ditch ambitions to raise as much as $100 billion via an international and domestic listing of a 5% stake.

Even at a $1.7 trillion valuation, international institutions baulked, prompting Aramco to scrap roadshows in New York and London and focus instead on marketing a 1.5% stake to Saudi investors and wealthy Gulf Arab allies. Saudi banks offered citizens cheap credit to bid for shares.

DIVERSIFY FROM OIL

The IPO is the culmination of a years-long effort to sell a portion of the world’s most profitable company and raise funds to help diversify the kingdom away from oil and create jobs for a growing population.

“The amount raised by the IPO itself is relatively contained given the size of the economy and medium-term funding requirement of the transformation plan,” said Monica Malik, chief economist at Abu Dhabi Commercial Bank.

“Nevertheless, combined with other areas of funding, we believe that there is meaningful capital in place to progress with the investment plans aimed at diversifying the economy.”

The government promoted the investment as a patriotic duty, particularly after Aramco’s oil facilities were attacked in September, temporarily halving the kingdom’s oil output.

Despite the official push and offer of loans to fund share purchases, interest was relatively muted compared with other emerging market IPOs, including the listing of a top Saudi bank in 2014 which was oversubscribed many times over.

Alibaba’s listing in Hong Kong this month had bids for 40 times the number of shares on offer.

Sources have said the Abu Dhabi Investment Authority (ADIA) and Kuwait Investment Authority (KIA), sovereign wealth funds of two of Saudi Arabia’s Gulf allies, planned to invest in the deal. ADIA declined to comment, while KIA did not respond to requests for comment.

Saudi citizens were offered 0.5% of the company or about a third of the offering, an unprecedented retail offering compared with previous Saudi IPOs.

Aramco has planned a dividend of $75 billion for 2020, more than five times larger than Apple’s payout, which is already among the biggest of any S&P 500 company.

But investing in Aramco is also a bet on the price of oil and growth in global demand for crude, which is expected to slow from 2025 as steps to cut greenhouse gas emissions are rolled out and the use of electric vehicles increases.

The IPO also carries political risk as the Saudi government, which relies on Aramco for the bulk of revenues, controls the company.

Saudi Arabia has faced international criticism after the murder of Saudi journalist Jamal Khashoggi last year in the Saudi consulate in Istanbul and for its role in a war in Yemen.

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Fowler: Digital space key to revenue generation

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Fowler: Digital space key to revenue generation

Chairman, Federal Inland Revenue Service (FIRS), Babatunde Fowler, has described digital space as the new gold in revenue generation. Fowler said this yesterday in his opening remarks at the third Annual Nigeria Tax Research Network Conference holding at the FIRS Training School in Durumi, Abuja.

The conference is themed: “Revenue Challenges Online and Offline: Bridging the Digital divide in an Analogue Economy.” According to the FIRS boss, it is important that the service improves its capacity in the taxation of economic activities within the digital space.

Towards this, Fowler said the FIRS had deployed electronic tax services (e-services) to ensure the automation of tax processes for the purpose of improving transparency as well as easing speed of tax administration for both taxpayers and administrators. “The volume of economic activities associated with businesses like Uber, Amazon and our own Jumia and Interswitch is further confirmation of the aptness of the theme. “To put it in clear terms, the digital space is new ‘gold’ in terms of revenue generation, and tax administration must be alive to this fact.

“It is with this in mind that FIRS has designed and deployed electronic tax services (e-services) to ensure the automation of tax processes for the purpose of the improvement of transparency, ease and speed of tax administration for both taxpayers and tax administrators.

“These e-services have in no small way contributed to the successes recorded in the last two years amidst an economy characterised by the effect and aftermath of recession,” Fowler said. According to him, the e-services, are e-Registration for registration of new taxpayers; e-Stamp duty for payment of stamp duties on qualifying documents; e-TaxPayment for payment of all taxes of the Federal Government using Nigeria Inter-Bank Settlement System (NIBSS), Remita or Interswitch; e-Receipt for receiving and verifying e-receipts generated for taxes paid through the new e-TaxPayment. Others are e-Filing, which enables taxpayers file their tax returns through Integrated Tax Administration System (ITAS); and e-TCC platform, which enables taxpayers apply for, receive and verify authenticity of their electronic tax clearance certificates (e-TCC).

Fowler stated that the conference was an opportunity for tax administrators to brainstorm on new ideas to broaden the tax net as well as strategise on optimal service delivery. The conference, according to him, is also for the discussion of current ideas, new trends and future prospects of revenue collection. “This conference, like others before it, presents us with an opportunity to brainstorm and articulate initiatives for the broadening of the tax net and strategies geared towards ensuring optimised service delivery.

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Access Bank donates facility to police

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Access Bank donates facility to police

Access Bank Plc has donated an interrogation room to the Nigerian Police Force (NPF) at Alagbon, Lagos. In addition to the fully equipped facility, the bank also donated a 250 KVA generator to the force to help improve their working conditions and that of neighbouring communities.

The Group Managing Director, Access Bank Plc., Herbert Wigwe, who was represented at the commissioning by the Group Head, Enterprise Business Resources, Mac Atom, spoke on the bank’s motive and commitment to corporate social responsibility.

“Partnerships and social investment remains a critical part of Access Bank’s sustainability drive. In our bid to offer more than banking and create value for various government agencies, we have donated state of the art interrogation and observation rooms to select divisions of the Nigerian Police Force across the country, starting with Lagos. “We thank the NPF for all they do, especially for seeing to it that all our customers remain protected and secure,” he said. Speaking on behalf of the NPF, the Assistant Inspector General of Police in charge of Force Criminal Investigation Department (FCID) Annex, Alagbon, Ikoyi, Murtala Mani, expressed gratitude for the donation and urged other private organisations to follow Access Bank’s blueprint in offering support to the Force. Over the years, the bank’s sustainability focus areas and community investment include education, health, gender equality, arts, and sports – demonstrating its commitment to channeling noteworthy resources and funds into impacting citizens positively and responsibly.

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Border closure: Spurring rise in rice milling plants

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Border closure: Spurring rise in rice milling plants

It is reported that the Federal Government’s decision to partially close the country’s land borders since August this year is already yielding fruits in rice value chain with more rice milling plants springing up nationwide. Taiwo Hassan reports

 

 

The Yuletide season is around the corner and all eyes are on the country’s rice sector as processors and merchants are going to step up to meet demand for the number one staple food of many Nigerians. 

There is no doubt that the border closure has cleared the way for rice millers and producers in the country to produce abundant rice for consumption at a period smuggling of the commodity has drastically reduced.

However, against all odd, reports have, however, showed that hundreds of rice milling plants have sprung up in the country, while those that were moribund are now being reactivated in many rice-producing states.

A number of rice millers are now floating milling plants by adding to their production lines in a bid to ensure sufficiency and also key into government’s diversification agenda to promote agriculture.

Genesis

For the record, Nigeria is now a rice producing nation following Central Bank of Nigeria (CBN)’s Anchor Borrowers Programme (APB), which has opened gateway of opportunities for the development in the country.

The current administration of President Muhammadu Buhari would be remembered for the active role it played towards sustainable development of rice production in Nigeria.

At the launch of ABP scheme on rice development at Birni Kebbi, Kebbi State in 2015, there were lots of doubts among some sections of Nigerians about government’s capability to deliver on its promises on developmental project in the country.

Emphatically, the Anchor Borrowers Programme has been a success story in all ramifications and it is even being replicated in some neighbouring countries.

In 2015, at a Federal Executive Council meeting (FEC) in Abuja, it was agreed that to float rice APB to be managed by the apex bank, with focus to attain self-sufficiency in rice production.

Rice millers’ impact

Following Federal Government’s intention to ban rice importation in favour of local rice production, there has been aggressive move by private sector–led firms to invest in rice mills.

Particularly, many rice millers have commenced rice cultivation in line with government’s policy to ensure sufficiency in the country by year end.

Some of the major rice milling companies in the country that have heeded the clarion call have intensified their efforts to see that more rice mills are established in the country to meet national demand.

These rice companies include Olam Nigeria Limited owned by Stallion Group, WACOT rice mill, Dangote rice mill, Sunti Rice Limited, a subsidiary of FMN Plc, Miva rice mill and BUA rice mill.

Others are Umza Rice, Ebonyi Rice Mill, Tiamin Rice Mill Limited, Coscharis Farms Limited and others.   

Dangote Group is also planning to establish a multi-billion naira rice processing mill in Hadin, Jigawa State. The Chairman of Dangote Group, Aliko Dangote, who laid the foundation stone for the construction of the mill, said it had the capacity to process 16 metric tons of paddy rice per hour when completed.

He said that in a year, the mill would process paddy rice worth N14billion, bought directly from famers in Jigawa at market rate.

Apart from the large millers, there are many medium-scale ones upgrading their facilities to strengthen production. They include NFG-CS Rice Mill in Ga’ate and many more in Lafia and Doma in Nasarawa State; Ogoja Rice Mill in Cross River.

Recently, the management of Tiamin Rice Mill Limited disclosed that about $13,370,500 was invested to boost its production capacity from the current 320 tonnes to 1,520 tonnes per day.

The Managing Director of the company, Aminu Ahmed, explained that the policy of the current administration, especially the ban on smuggling and the interventions given to them by CBN, had helped immensely in boosting local production of rice.

He also revealed that the company was established in 2016 in Kano and started production of rice in 2018 with 320 tonnes per day.

Ahmed disclosed that the existing production line in Kano would be expanded from 320 tonnes to 920 tonnes next year, just as a new production line would start production of 600 tonnes per day in Bauchi by May 2020.

New rice mills

In order to sustain the momentum in rice production, the Federal Executive Council (FEC) approved the sum of N10.7 billion for the construction of 10 new rice mills to sustain the actualisation of rice-sufficiency programme last year.

Speaking at the press briefing after the council’s meeting, a former Minister of State for Agriculture, Heneiken Lokpobiri, said FEC approved the establishment of 10 rice mills with capacity to produce 100 tonnes per day, which would be managed by private rice millers.

Lokpobiri said the FEC approved the construction of 10 large rice mills to boost the milling capacity of rice value chain in the country.

“A few years ago it was reported that this country needs a minimum of 100 large rice mills. As of today we have about, 21, but the Federal Government in its wisdom decided that today we should approve the establishment of 10 at the total cost of N10.7 billion,” he added.

According to the former minister, the rice mills would be given to the private sector for proper management as they would pay back within a given time frame as agreed between the Bank of Agriculture and the rice millers.

Lokpobiri noted that the mills wouldbe located in Kebbi, Zamfara, Benue, Kogi, Bayelsa, Anambra, Kaduna, Ogun, Niger and Bauchi states.

Last line

With brisk business at full swing for local rice millers at this period despite challenges of sophisticated equipment to improve on paddy processing, some agric experts still doubt the capacity of the rice millers to meet national demand.

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Business

Bank lauded for supporting young entrepreneurs

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Bank lauded for supporting young entrepreneurs

Ecobank Nigeria has been commended for supporting budding entrepreneurs and small and medium enterprises (SMEs) in the country.

The bank got the commendation for giving weight to young entrepreneurs who were selected as beneficiaries of the ‘Unusual Entrepreneurs” programme, an initiative of the Catholic Church of Divine Mercy, Lekki Lagos.

Speaking at the presentation of cheques to the 251 young entrepreneurs, the Parish Priest, Monsignor Pascal Nweazeapu, said this action by Ecobank showed a clear alignment to the vision of supporting employment amongst the teeming youth population in the country.

He noted that the scheme was initiated to empower those who show demonstrable interest in business to enable them bring the ideas to fruition. The beneficiaries were given seed funding ranging from N50,000 to N1million to start their businesses.

Also speaking, Chairman of Unusual Entrepreneurs Committee and President of Transcorp Hotel, Mr. Valentine Ozigbo, said the ‘Unusual Entrepreneurs’ programme was to empower the participants to grow their businesses, improve their economic status and fend for themselves and their families and also contribute meaningfully to nation’s economy.

Ozigbo added: “The essence is to be able to empower men and women economically as they are also filled spiritually. We believe that with this combination, they would have more reason to believe and trust in God.

“But beyond that, they are able to fend for themselves, and those around them. We want them to run successful businesses, hence we matched them with mentors; people who have been so well established in what they do. So basically, they handhold them, watch them all through the journey, and we have seen a lot of testimonies already. We are highly delighted that Ecobank is partnering with us in this laudable initiative.’’

In his comment the Managing Director, Ecobank Nigeria, Patrick Akinwuntan pledged the bank’s continuous support to budding entrepreneurs to enable them grow and nurture their businesses to support the rapid development of the nation’s economy.

He said the decision to partner with Unusual Entrepreneurs was part of a deliberate policy of the Bank to assist upcoming businesses to grow, stressing that the main objective of the pan African bank is to contribute to the economic development and financial integration of the continent.

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Business

Maritime: N2.5trn loss triggers doubt over FG’s policy

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Maritime: N2.5trn loss triggers doubt over FG’s policy

More than three years after, the Presidential Executive Order on Ease of Doing Business signed by the Vice President, Prof Yemi Osinbajo, to facilitate trade in the nation’s maritime sector, has been stalled by lack of single window platform and corrupt practices.

The executive order was signed on May 18, 2016, to reduce cargo clearance and ship turnaround time.

However, the Lagos Chamber of Commerce (LCCI) and its relevant maritime industry members, in a recent survey produced by Convention on Business Integrity (CBi) stated that negative operational elements had made the ports lose N2.5trillion annually.

The survey further explained that wide discretionary powers were used by some port officials on clearing processes, fees, charges that have created opportunities for graft and extortion of port users.

With regard to port operations, there were six reform initiatives introduced by the executive order but lack of single window platform and bottle neck created by government agencies had impeded the order from working.

In the executive order, all agencies physically present at the ports are supposed to harmonise their operations into a single interface.

In addition, it noted that Apapa Port would have 24-hour operations. However, the order exists only on paper as cargo dwell time has risen to 22 days, while the ship turnaround time has increased to eight days at the various due to lack of single window platform to help eliminate human contact at the port.

The CBI survey revealed that officials of the Nigeria Customs Service and port operators function at the supply side of the system.

It noted that they were very influential in manipulating the system for and/or against the demand side of port users.

Also, a Deputy Director, Monitoring and Enforcement at the Nigerian Shippers’ council (NSC), Mrs Celine Ifeora, said lack of single window at the port was currently breeding corruption and delay in cargo clearance.

She stressed the need to put the platform in place in order to eradicate all manual processes, which bring about delay and corruption.

Ifeora said in Lagos that despite efforts by the council at ensuring efficiency, absence of a single window platform had robbed the country the gains of port reform exercise carried out in 2006.

The director noted that Cotonou Port had been experiencing reduction in cargo dwell time from 14 days to seven days after implementation of the single window platform, while some neighbouring countries have three days.

She said:  “Although the ports have been concessioned in order to ensure low cost of doing business, but we are still having so many problems. We want to bring in efficiency but efficiency is running away from us. Most of the cargoes that come into our country today still undergo physical examination, even the scanners that we have, most of them are not working, and cargo dwell time is still going up.”

Ifeora also explained that the turnaround time of vessels was equally going up in some of the terminals.

The director noted: “Not long ago, I was in Cotonou, where Port Management Association of West and Central Africa (PMAWCA) had a programme about single window, you won’t believe that Cotonou Port for example told us that when they put the single window in place, their revenue increased by 38 per cent which is quite high. Secondly, their cargo dwell time reduced from 14 days to 7 days, we need to join people who are doing the right thing in order for us to be competitive.”

Worried by the spate of corruption at the port, founder of National Association of Government Approved Freight forwarders (NAGAFF), Dr Boniface Aniebonam, at a forum in Lagos, had stressed the need for the adoption of individual declarant in the cargo clearing operation.

He explained that the current system, where the declarant in trade documents was a corporate body, as recognised by the Customs and Excise Management Act (CEMA), was responsible for trade malpractices at the nation’s ports.

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Business

Envoy: Nigeria, others can halt $35bn food import

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Envoy: Nigeria, others can halt $35bn food import

Nigeria and other African countries have been advised to prioritise the importance of good land governance, effective land administration and sustainable land management within the continent as a way of stopping the over $35 billion spent on food importation from the West annually.

Counsellor for Economic Cooperation at the Germany Embassy in Abidjan, Cote D’ Ivoire, Benjamin Laag, in an interview with this newspaper at the 2019 Conference on Land Policy in Africa (CLPA2019), which held in Lagos, said it was time for governments in the continent to finally tackle the alarming food import bill that has rendered the continent underdeveloped for decades.

Laag said due to technological improvements in agriculture, as well as in geospatial sciences and other relevant land sectors, tools were available to implement policies to ensure fair and sustainable land policies on the continent.

According to him, corruption is behind the continued spending on food importation and unless there is a change in perception towards agriculture development in the continent.   

“Almost every person on the continent has been affected by corruption and very often the distribution and registration of agricultural and urban land is the reason for it. The importance of good land governance as well as effective land administration and sustainable land management is needed for the African continent which spends over $35 billion annually importing food from the West,” he said.

He disclosed that the German Government had supported Nigeria and some other countries in the continent in its efforts to address land corruption in its bilateral and global programmes on land just as it has also supported transparency initiatives such as the Land Matrix and Land Portal, as well as financing Transparency International’s programme on land and corruption in Africa.

“Data and research on the linkages between land and corruption is now available and I am personally looking forward to hearing from participants presenting their findings.

“We need African solutions to African challenges. And in this regard, Germany appreciates the huge effort that the AU is making through the African Land Policy Center and other AU institutions, to promote and implement the AU agenda on land,” he said.

The President of African Development Bank (AfDB), Dr Akinwumi Adesina, had revealed that Nigeria and other countries in the continent were spending over $35 billion annually on food import.

The AfDB chief, therefore, called for land tax for unused agricultural land to provide incentives for faster commercialisation of agriculture and unlocking its potential in Africa.

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Business

IPPIS: Lecturers restate revulsion for scheme

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IPPIS: Lecturers restate revulsion for scheme

As the battle between Federal Government and Academic Staff Union of Universities (ASUU) over the latter’s refusal to enroll in the Integrated Payroll and Personnel Information Scheme (IPPIS) remains unresolved, some lecturers have restated their abhorrence for the scheme as it tends to shortchange them in the course of doing their job.

Recall that the Federal Government had directed all lecturers on its payroll to register on the IPPIS platform, warning that any lecturer that refuses to register should forget receiving his salary, beginning from October.

The IPPIS project, which commenced in 2007, is responsible for payment of salaries and wages directly to the bank accounts of Federal Government employees.

It is also in charge of deducting and remitting third party payments from the salaries of Federal Government workers.

Some of these third party deduction channels include Federal Inland Revenue Service, State Boards Of Inland Revenue, National Health Insurance Scheme, National Housing Fund, Pension Fund Administrator, Cooperative Societies, Trade Unions Dues, Association Dues And Bank Loans.

Reacting to the directive, ASUU charged its members not to register under the scheme as it will jeopardise the current arrangement in the university system.

In a chat with our correspondent, a lecturer in Department of Mass Communications, University of Nigeria, Nsuka, Mr. Robert Ezeanwu, said there were some errors in the scheme, which the government should to look into.

He said, for instance, that as regards the age or retirement, lecturers would be forced to retire at the age of 60, as against 65or70, stressing that the scheme also tend to restrict lecturers from moving freely from one institution to another as well as preventing them from sabbatical leave.

Also reacting, Mrs. Edith Ohaja, who is Head of Department, Mass Communications, UNN, said the scheme would centralize a lot of things to the discomfort of lecturers.

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Agric

ABP: Association begins N4bn loan recovery from cotton farmers

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ABP: Association begins N4bn loan recovery from cotton farmers

Prior to the disbursement of a N4 billion loan to farmers under the Anchor Borrowers Programme (ABP) by the Central Bank of Nigeria (CBN) across some cotton-producing states, the Cotton Producers and Merchants Association (COPMA) has said it is setting out to recover the loan from beneficiaries.

The National President of COPMA, Alhaji Lawal Matazu, explained during the inauguration of the recovery committee that the programme was part of government’s policy to revamp the nation’s agricultural sector to enable farmers get economic freedom.

Matazu stated that recovery of the loan from his members was critical at this period because it shows that government has confidence in cotton farmers to pay back the APB loans. 

He said: “The programme is aimed at providing an opportunity for the common man, the peasant farmer especially, to have access to an agricultural loan at its doorsteps without any collateral or all those conventional protocols and at cheaper rate charges.”

He said the programme engaged 22,000 farmers across the country, and it covered 24,000 hectares of farms with an expected yield of 36,969 metric tonnes of cotton that will cost N4 billion.

“The minimum guaranteed price for the produce is agreed at N150 per Kg. The price is believed to be a reasonable one for the farmers to make a profit after repaying their loan. In the event that the market price of the produce is above the minimum agreed price, the produce will be collected at the rate of the market prevailing price,” Matazu explained.   

The association’s president admonished the recovery committee to use all available and peaceful avenues to recover the loans for the sustainability of the programme as it was designed as a revolving loan.

On his part, National Secretary of the association, Alhaji Kamilu Sheikh Munnir, stated that the programme was initiated by the Federal Government in 2016 for cotton farmers to easily access inputs, as it is designed as a simple loan.

He said: “COPMA came into the programme in 2017 and each farmer/beneficiary was allocated three hectares. All that was distributed to them were in the form of seeds, pesticides and other inputs and the repayment is expected to be with the cotton produced by the farmers, not in cash.”

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Business

Outsourcing: Whyte Cleon to promote entrepreneurial training

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Whyte Cleon Limited, a leading human resource outsourcing and consulting company, has revealed that it will commence an entrepreneurial development training designed for its former employees to make them become solution providers in outsourcing industry.

The company’s Chief Executive Officer and Managing Director, Mrs. Nireti Adebayo, made this known in Lagos during the company’s pre 10-year anniversary scheduled for the first quarter of 2020.

She stated that entrepreneurial development training was a platform in which the firm wants to give back to the society by equipping its former colleagues with a new mindset that will enable them become more productive in their chosen profession.       

Adebayo said: “Over time, we have delivered unrivalled quality service to our clients and provided practical solutions to our clients assisting them in strategy formulation and execution, talent acquisition, organisational performance and human capital investment.

“The entrepreneurial development training is a platform through which we aim to give back to society by equipping our former colleagues with a new mindset that will enable them become more productive, flourish, and ultimately become solutions provider and employers of labour, thereby helping to lift others out of poverty.”    

The chief executive officer explained that this initiative, which is the first of its kind by any organisation in the outsourcing space, attested to the status of Whyte Cleon Limited as Nigeria’s fastest growing , “future forward” human resources solution provider.

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