Report blames Customs for high port charges
March 27th, 2017
A study by Nigeria's leading accounting firm, Akintola Williams Deloitte, has blamed the high cost of doing business at the nation's seaports on the Nigeria Customs Service and other government agencies, claiming that Customs processes are responsible for not less than 82.1 per cent of the charges incurred by consignees.
This assertion was contained in an industry report titled: ‘Public Private Partnership as an anchor for diversifying the Nigeria economy: Lagos Container Terminals concession as a case study', which the firm has just published.
Akintola Williams Deloitte stated that its value chain analysis of a 20-foot container laden with cargo worth N44.42m ($100,000) imported into Nigeria from China revealed that about N6.5m would be required to clear and transport the container out of the port.
Out of this amount, about N5.3m (representing 82.1 per cent) is paid to the NCS as Import Duty, Comprehensive Import Supervision Scheme, ECOWAS Trade Liberalisation Scheme, Port Development Surcharge and Value Added Tax.
The firm stated that other actors in the value chain included shipping companies, Nigerian Ports Authority, terminal operators, clearing companies and haulage services providers.
It said shipping companies were responsible for 13.8 per cent of the port charges (N897,000); terminal operators, 1.8 per cent (N117,000); transporters, 1.1 per cent (N71,500); and clearing agents, N78,000.
The report stated, "The value chain of a typical container terminal operations begins with the shipment of the goods through a shipping line to the host country. The consignee pays the freight charges for the shipping as well as the container deposit fees. Demurrage charges may apply where the consignee fails to return the containers on time.
"Upon arrival of the container at the Nigeria port, the consignees pays terminal handling charges, storage charges, delivery charges and customs examination charges to the terminal operators. In addition, the consignees also pay the relevant Customs import duty.
"Consignees pay for logistics services to get the goods out of the terminal. Consignees pay for the services of the clearing agents (where applicable). Large companies are directly responsible for clearing their goods."
Notwithstanding their huge investment and meagre earnings, the report stated that the terminal operators were bearing the burden of most of the challenges at the port.
Culled from: http://punchng.com/report-blames-customs-for-high-port-charges/
March 27th, 2017
Nigeria's quest to borrow about $1.4 billion from international finance institutions may be under threat as the International Monetary Fund (IMF) has dismissed the government's economic recovery plan as unsatisfactory.
According to a report, by IMF, the reform plans are not enough to bring the country out of recession.
Reuters news agency reports that the development could delay talks over $1.4 billion in international loans.
The World Bank has been in talks with Nigeria for a loan of at least $1 billion for more than a year and the African Development Bank, AfDB, has $400 million on offer, but discussions have stalled over economic reforms.
Nigeria is seeking the funding for infrastructure investment and to help plug an expected record deficit in this year's budget as it boosts spending to try to end a recession.
Muhammadu Buhari, Nigeria's president, has rejected further devaluation of the currency.
According to the 68-page IMF report obtained by Reuters, the Washington-based fund will urge Nigeria, a major oil producer, to introduce immediate changes to its exchange rate policy.
It would also say its recent reform plan is not enough to drag Africa's biggest economy out of recession.
"Much more needs to be done," the IMF said in the document, written after a final meeting between its representatives and top officials in Abuja, Nigeria's capital.
Culled from: http://shipsandports.com.ng/imf-report-threatens-fgs-1-14bn-foreign-loan-quest/
Dollar Drops Below N400/$ for First Time in Seven Months
March 23rd, 2017
For the first time in seven months, the dollar fell below the psychological N400 barrier, when the greenback traded at N399 to the dollar in Lagos and exchanged at N395 in Abuja, lower than N410 at which it traded on Tuesday.
With the gains made by the local currency in the last five weeks, the naira inched closer to one of the Central Bank of Nigeria's (CBN) key foreign exchange policy objectives of an exchange rate convergence.
The naira trades for N375 to the greenback for invisibles and at N307 to the dollar on the FX interbank market, the official window for manufacturers and importers of raw materials eligible to buy FX from this segment of the market.
The last time the naira traded at between N395 and N400 to the dollar on the parallel market was in August 2016.
The significant gains made by the naira on the parallel market, according to market analysts, was a reflection of the improved confidence in the FX market, following the sustained dollar interventions by the CBN since last month.
One analyst also attributed the gains made by naira to the Bureau de Change (BDC) operators that are awash with dollars and with little or no customers to patronise them.
He said several retail customers who used to resort to the BDCs (which realistically fund the parallel market) to fund invisible transactions now get to buy dollars at a lower rate from the banks.
"The BDCs are awash with cash. Remember that the central bank sold about $200,000 to each BDC at some point and they had also bought dollars at high rates which they hoarded, thinking that the naira would remain in a free fall.
"But with the CBN's intervention, they are stuck with loads of dollars and little or no customers, so they have stopped buying dollars and are looking for avenues to offload what they bought at ridiculously high rates.
"Essentially, the speculative attacks on the naira has come back to haunt them and they've got their fingers burnt," he said.
In all, the central bank has auctioned a total of $1.895 billion through forward sales, as well as targeted intervention for invisibles.
This amount does not include its daily intervention of $1.5 million on the interbank market.
The CBN Governor, Mr. Godwin Emefiele, on Tuesday expressed optimism about the convergence of the FX rates on the official and parallel markets, stating that the gains made by the naira against the greenback in the last five weeks was not a fluke.
Emefiele said he was happy that the central bank's intervention was yielding positive results.
"I am happy, indeed very gratified, that the interventions have been positive, we have seen the rates now converging and we are strongly optimistic that the rates will converge further.
"In terms of sustainability, I think it's important for us to say that the foreign reserves at this time are still trending upwards to almost $31 billion as I speak with you.
"And the fact that we have done this consistently for close to five weeks, should tell everybody or those who doubt the strength of the central bank to sustain this policy," he had said after the meeting of the Monetary Policy Committee (MPC).
But an analyst at Ecobank Nigeria, Mr. Kunle Ezun, who welcomed the development in the FX market, pointed out that achieving a convergence between the official (interbank rate) and parallel market rate would be a more onerous task.
"For us to have a convergence between the interbank and parallel market, it would require the CBN to devalue the official exchange rate to about N350 to the dollar.
"Without that, I don't see how the official and parallel market rates can converge. Maybe what the CBN governor was talking about is achieving a convergence between the parallel market rate and the rate for invisibles, which is N375 to the dollar.
"But what the CBN has done in the last one month has really helped the parallel market rate. But we need to see improved liquidity on the interbank market," Ezun said in a phone chat with THISDAY.
In another development, the Deputy Governor of the CBN, Economic Policy, Dr. Sarah Alade, retired on Wednesday and urged Emefiele to uphold the credibility of the bank.
Alade, who for four months served as the acting governor of the central bank, following the suspension of the former CBN governor, Sanusi Lamido Sanusi, now the Emir of Kano, also recalled a dark period during her stint when the central bank had "four governors".
Alade spoke at a send off held at the CBN headquarters in Abuja that had in attendance Emefiele; the Minister of Finance, Mrs. Kemi Adeosun; Minister of Budget and National Planning, Senator Udoma Udo Udoma; and officials from the International Monetary Fund (IMF) and World Bank, reported the News Agency of Nigeria (NAN).
Sanusi, in February 2014, was suspended by former President Goodluck Jonathan over allegations of financial recklessness and misconduct.
This happened after Sanusi had claimed that the Nigerian National Petroleum Corporation (NNPC) had not remitted $20 billion from crude oil earnings to the treasury.
"Throughout my period at the bank, I had one slight regret and that's during the period I was the acting governor. It was the time that the CBN was being investigated. It had never happened before that the activities of the CBN were under investigation.
"We went for the IMF meetings and when we met with investors, they asked us ‘what is happening? We understand that there was some financial mismanagement in the CBN'. It was humiliating.
"I think for me, that was a low point. The credibility of this institution was eroded.
"For an institution this important to be subjected to that, is bad. At the end of the day, it was not just CBN that suffered for it but the economy as a whole did suffer.
"So I want to encourage us that whatever we need to do, let us do it right. We must not subject this institution to that type of incident again," she said.
Sharing her experience as acting governor, Alade explained that the investigation had paralysed activities at the bank.
"I remember that during that period, I was reminded every morning that we had four governors.
"The suspended governor, the governor-in-waiting, the acting governor and the investigating governor.
"I remember that the investigating governor told us that there should be no initiative, no payment, no decision-making, nothing. The only thing we could do was to just maintain the bank.
"So the bank was sort of paralysed. We could not do anything. For me, it was a humiliating experience, but we did the best we could," she said.
The persons Alade was referring to were Sanusi - suspended governor; Emefiele - governor-in-waiting; Alade - acting governor; and Mr. Jim Obazee - investigating governor, who at the time was the Executive Secretary of the Financial Reporting Council of Nigeria (FRCN).
Obazee, who was recently fired by President Muhammadu Buhari, had written a damning report on the bank's 2011 and 2012 audited financial accounts under Sanusi's stewardship.
At the send off for Alade, Emefiele described her as "a friend, colleague and a woman of extreme virtue".
He applauded her for her hard work and the 23 years she had served at the central bank.
Similarly, Adeosun described the retiree as one of the brilliant and inspiring Nigerian women in the financial sector.
In her capacity as the Deputy Governor, Economic Policy, a post she held for 10 years, Alade served on the teams on major economic policy studies and was involved in the preparation of the CBN's Monetary and Credit Policy proposals over the years.
She was actively involved in the drafting of the Medium Term Economic Programme for Nigeria and the IMF Staff Monitored Programme/Standby Arrangement.
She was also a member of the Technical Committee on Vision 2010 and is currently a member of the Technical Committee on Vision 2020, as well as the National Economic Management Team.
As deputy governor, Alade superintended over the Economic Policy Directorate, comprising the Research, Monetary Policy, Trade and Exchange, Statistics Departments and the Financial Markets Department.
As chair of the Monetary Policy Implementation Committee, she interfaced with operational departments and coordinated technical inputs for the Monetary Policy Committee of the CBN.
Meanwhile, Fitch Ratings on Wednesday said Nigerian banks would continue to face challenges this year, following the extreme difficultly they faced in 2016.
The ratings agency, in a report on Nigerian banks, pointed out that the financial institutions faced multiple threats from the operating environment in 2016, including Nigeria sliding into recession, the economy continuing to suffer from low oil prices, and severe shortages of foreign currency (FC).
Consequently, banks struggled with declining operating profitability (excluding translation gains), sluggish credit growth, fast asset quality deterioration, tight FC liquidity and weakening capitalisation, putting increasing pressure on their credit profiles.
Fitch stated that the "outlook for the rest of 2017 is not much brighter. We believe that the banks will continue to face extremely tight FC liquidity despite the authorities' best efforts to normalise the foreign exchange (FX) interbank market and improve the supply of US dollars".
It added: "Importantly, deliveries under the CBN's FX forward transactions since first half of 2016 have helped the banks access US dollars and reduce a large backlog of overdue trade finance obligations to international correspondent banks.
"However, given the severity of the FC liquidity issues, refinancing risk remains at the top of our perceived risks for the sector, especially as some banks have large Eurobond maturities in 2017/2018.
"Fast asset quality deterioration is in line with our expectations given the macro challenges and the continuing issues in the oil-sector.
"Oil-related impaired loans (NPLs) are high and this excludes large volumes of restructured loans. Other industry sectors contributing to NPLs include general commerce and trading, which have been affected by both the naira depreciation and FC shortages.
"For the Fitch-rated banks, we believe the NPL ratio could rise to 10%-12% by end of first half 2017 (this remains lower than the CBN's reported figure for the entire sector).
"As a one-off policy change, the CBN allowed banks to write off all fully reserved NPLs by end-2016. Together with significant loan restructuring (particularly in the oil sector), this will ease pressure on NPLs for now, in our view.
"Slower economic growth and a lower risk appetite from banks will continue to translate into subdued credit growth and weak core earnings generation in 2017.
"Loan growth averaged 25% in 9M16, but this was due to the currency translation effect post-devaluation as about half of sector loans are in FC."
According to Fitch, loan growth was negligible in constant currency terms, adding that banks' 2016 profitability was underpinned by large translation gains booked on net long FC positions following the naira devaluation.
"Excluding these, some banks would have reported a significant fall in operating income. Regulatory capital ratios are high from a global perspective, but remain under pressure due to inflated risk-weighted assets (due to the FC translation effect) and lower core retained earnings.
"In our view, there is a limited margin of safety as some banks could very easily breach minimum regulatory requirements in the event of further naira depreciation and/or weaker asset quality," it added.
The agency observed that the Long-Term IDRs of all Nigerian banks are in the ‘B' range, indicating highly speculative fundamental credit quality.
The low ratings, it noted, reflect the significant influence of the weak operating environment, which overshadows other rating factors.
"The banks' IDRs are driven by their Viability Ratings, Fitch's assessment of their standalone creditworthiness.
"Following a re-assessment of potential sovereign support available to the banks in 2016, Fitch believes that sovereign support cannot be relied on given Nigeria's (B+/Negative) weak ability to do so in FC.
"As a consequence, we removed sovereign support from the Long-Term IDRs. Overall, the largest Nigerian banks with stronger and more diverse business models, high revenue-generating capacity and stronger liquidity profiles appear to be coping better than smaller banks on most metrics.
"However, tail risks remain high for all banks due to their sensitivity to concentration risk," it said.
Culled from: https://www.thisdaylive.com/index.php/2017/03/23/dollar-drops-below-n400-for-first-time-in-seven-months/
Naira Sustains Gains on Parallel Market as CBN Auctions $180m
March 22nd, 2017
The naira sustained its momentum on the parallel market yesterday, where it appreciated by N5 to close at N444 to the dollar, stronger than the N449 to the dollar last Friday.
The gain was largely influenced by the increased dollar liquidity in the economy as the Central Bank of Nigeria (CBN) continues its intervention in the interbank foreign exchange (FX) market.
The CBN yesterday offered $180 million to dealers in the interbank FX market.
A breakdown of this showed that the bank sold $100 million to meet bids for wholesale intervention forwards and another $80 million to meet requests for invisibles such as medicals, school fees and personal travel allowances.
Confirming the figures, the acting Director, Corporate Communications Department, CBN, Isaac Okorafor, said the wholesale requests would be settled today (Tuesday), adding that the closing interbank rate for Monday, March 20, 2017, was N307.5/$1.
With the development, it was expected that the naira would further strengthen in the foreign exchange market in the days to come.
While disclosing that the bank had so far met all the legitimate demands from genuine customers, Okorafor reiterated that the CBN would ensure sustainable FX liquidity and transparency in the process to enable as many customers as possible get access to the foreign exchange they genuinely demand.
He therefore advised eligible individuals with genuine foreign currency needs to freely approach their banks and authorised dealers with their request, stressing that the CBN had made adequate provisions of foreign currency for all such legitimate purposes.
CBN Governor, Mr. Godwin Emefiele, recently said the central bank was acting in the best interests of ordinary Nigerians, regardless of the noise from the few entrenched interests whom the bank's policies may be hurting.
He added: "Let me also reiterate the central bank's willingness, determination, and capacity to continue to meet all legitimate transaction-based FX demands in the market. I obviously cannot be of help to people or businesses who are into speculative FX demand. My promise instead to this group, whether foreign or local, is that the CBN will make sure they lose money!"
Emefiele therefore stressed the need for Nigerians, especially policy makers, to develop a sense of national consciousness in carrying out their duties.
Culled from: https://www.thisdaylive.com/index.php/2017/03/21/naira-sustains-gains-on-parallel-market-as-cbn-auctions-180m/
Naira to Appreciate Further as CBN Boosts Forex Sale
March 20th, 2017
The naira is set to appreciate further in the week as the Central Bank of Nigeria (CBN) plans to inject more foreign exchange (forex) into the market to meet the requests of genuine customers.
The spokesman of CBN, Mr. Isaac Okorafor, said this yesterday in Lagos.
The News Agency of Nigeria (NAN) reported that the CBN has so far kept to its promise of continuing to supply enough forex to guarantee liquidity in the market.
The statement said the bank was committed to ensuring that authorised dealers get sufficient supply to meet the demands of authentic customers of banks.
It disclosed that the bank has since February offered over one billion dollars to the interbank forex market.
The central bank expressed optimism that stability had been restored to the forex market.
According to the statement, individuals can easily access forex to address personal and business allowances.
A summary of the CBN intervention in the interbank market over the past two months, showed that the highest bid was N360 per dollar while the lowest was N315 per dollar.
Culled from: https://www.thisdaylive.com/index.php/2017/03/20/naira-to-appreciate-further-as-cbn-boosts-forex-sale/
Naira Gains as CBN Auctions $150m FX Forwards
March 17th, 2017
The naira appreciated slightly on the parallel market on Thursday following last Wednesday's sale of a total of $150 million through foreign exchange (FX) forwards by the Central Bank of Nigeria (CBN).
Specifically, the naira strengthened to N444 to the dollar on Thursday, stronger than the N454 to the dollar it was at some parallel market points in Lagos the previous day.
The CBN sold a total of $150 million to authorised foreign exchange dealers in the interbank at the highest bid rate of N335/$1 and a marginal rate of N320/$1.
Confirming the details of the sale to the dealers, the CBN acting Director, Corporate Communications, Isaac Okorafor, said the highest rate of N335 was the same as the last auction rate of March 8, 2017. He, however, added that there was a change in the marginal rate from N315/$1 during the last auction to last Wednesday's marginal rate of N320.
Speaking further, Okorafor expressed confidence that the pressure hitherto faced by both small and big-end users would be totally overcome soon.
The CBN, in the past few weeks, has been making offers and releases to the inter-bank foreign exchange market in its bid to sustain forex supply to different categories of users. The latest FX offer by the CBN took the total intervention since the changes to its FX policy was announced last month to $1.715 billion.
Meanwhile, Travelex with the approval of the CBN on Thursday sold a total of $25 million to 3,124 Bureau De Change (BDC) operators. The development also helped to improve the volume available to sell to retail customers.
The President of the Association of Bureau De Change of Nigeria (ABCON), Alhaji Aminu Gwadabe, said Travelex sold the dollars to his members at N381 per dollar.
Also, the CBN on Thursday said it had offered and received bids for $100 million from authorised dealers in the interbank market to meet the requests of genuine customers.
The CBN spokesman who disclosed this added that the sales would be settled on Friday.
He, however, disclosed that no intervention was made by the bank to meet requests for invisibles on Thursday.
Okorafor reiterated that the CBN would continue to make necessary interventions in the interbank market to meet all legitimate transaction-based foreign exchange demands by customers.
Culled from: https://www.thisdaylive.com/index.php/2017/03/17/naira-gains-as-cbn-auctions-150m-fx-forwards/
INTELS acquires N1.8bn crane, largest in Africa
March 14th, 2017
In line with its commitment of making Nigeria the hub of Oil and Gas logistics services in Africa, INTELS Nigeria Limited has acquired one of the largest port handling cranes in the world - a 600 tonnes Liebherr crane worth USD6 million (N1.83 billion).
The crane, which has been deployed at the Onne Oil and Gas Free Zone, is the largest at any port facility in Africa.
The Head, Administration and General Services of INTELS Nigeria Limited, Mr. Chibuisi Onyebueke, who conducted some guests round the sprawling Onne Oil and Gas Free Trade Zone on Thursday, said the crane, which is sitting on 104 tyres, is capable of lifting cargoes as heavy as 208 tonnes with a 17-metre boom outreach.
"The crane is characterized by rapid and efficient handling of loads up to 208 tonnes. With its extensive boom outreach, the LHM 600 is the ideal cargo handling solution for the type of very large and ultra large ships operating across the world today," he said.
He said the huge crane, fondly called ‘Big Mama' at the port, was acquired in addition to several other existing cargo handling equipment at the Onne Federal Lighter Terminal and Federal Ocean Terminal. He said the crane is being operated fully by Nigerians who have been trained abroad on its handling and maintenance.
Mr. Onyebueke said INTELS, working with relevant agencies of the Federal Government, has established an Oil and Gas Service Centre at the Onne Oil and Gas Free Zone to serve as a single loading location for the Oil and Gas industry in sub-Sahara Africa.
He said the Oil and Gas Service Centre has improved the efficiency of personnel in the industry while saving downtime on offshore rigs and providing quick response in case of emergency.
"It also provides the opportunity for better physical monitoring and follow up of equipment in stock, modularization of areas and better control of supply vessels for the Oil and Gas industry," he said.
He said INTELS tailored its services, facilities and operations to support activities in the Oil and Gas industry.
"The highly technical facilities required to support Oil and Gas related operations also require special equipment and highly skilled manpower to manage such operations which therefore led to higher level of investments by INTELS relative to competitors," he said.
Mr. Onyebueke also said that INTELS Nigeria Limited remains fully committed to maximizing, in a sustainable manner, the use of Nigerian human resources, materials, equipment and services in its operations without compromising the company's values, quality, health, safety and environment standards.
"As a Nigerian company, INTELS is committed to maximizing the participation of Nigerian businesses and local contractors in its operations in compliance with the Nigerian Oil & Gas Industry Content Development Act 2010," he said.
The signing into law of the Nigerian Oil & Gas Industry Content Development Act otherwise referred to as the "Local Content Act" in 2010, he said, was in line with the expectations of INTELS, "as the issue of Nigerian content has been central to the company's development strategy".
He said the company has actively supported its host communities through supporting sustainable projects and comprehensive corporate social responsibility programmes.
INTELS, he said, has committed billions of naira to road construction, provision of street lights, ultra-modern markets/lock-up shops and ICT centres in various parts of the Niger Delta. Other projects undertaken by INTELS include school renovation; provision of civic centres, youth secretariats, jetty restoration, women empowerment projects and medical outreach.
INTELS Nigeria Limited provides comprehensive integrated logistics services to the Oil and Gas Industry. It operates in major government-owned port facilities and Free Zones in Nigeria, among others.
At present, INTELS is leading the Nigerian Oil and Gas logistics support industry as a core logistics service provider through its skill, efficiency, integrity and quality of service.
The organization has 30 years of experience in ports management and terminal logistics support services in shore bases across Nigeria, applying the "One Stop Shop" solution under its Oil Service Centre Concept.
In 2006, INTELS was awarded concession by the Federal Government to operae Terminal A (Federal Ocean Terminal) and Terminal B (Federal Lighter Terminal) at the Onne Port Complex, which houses the Onne Oil and Gas Free Zone. It also operates terminals in Warri, Calabar and Apapa ports.
INTELS has received several local and international awards and commendation. Recently, the Nigerian Shippers' Council (NSC) - which is a government agency under the Federal Ministry of Transportation - commended INTELS Nigeria Limited for its huge investment and commitment to the development of port operations in the country.
The Chief Executive Officer of NSC, Mr. Hassan Bello, said INTELS deserved the recognition because of its defining role in the provision of integrated logistics services in the Nigerian maritime, oil and gas industries.
Culled from: http://shipsandports.com.ng/intels-acquires-n1-8bn-crane-largest-africa/
FG to prosecute illegal fish importers
March 10th, 2017
The Federal Government says it will henceforth arrest, prosecute and fine illegal importers of frozen foods into the country through the land borders and seal cold rooms where it is sold.
The Minister of State for Agriculture and Rural Development, Heineken Lokpobiri, announced this while speaking with newsmen in Abuja on Thursday.
Lokpobiri said the government would also set up a taskforce to seal and prosecute operators of cold room, who deal on those illegally imported produce.
The minister said the ministry was working in collaboration with the Nigeria Customs Service, Nigerian Navy and the Nigerian Marine Police to actualise the plan.
He said the offenders would pay a fine of $250,000 or attract five years imprisonment or both in addition to the forfeiture and destruction of the produce as stipulated by the law.
He listed some of the fishes usually being imported to include tilapia, red pacus, river bream, pangassius, horse mackerel, sardine and croaker, among others.
Lokpobiri said the illegal venture had resulted to huge loss of revenue, decrease in local production and loss of jobs, as well as discouragement by farmers.
The minister, who said that the move was to encourage local production and exports, disclosed that the country's annual demand on fish was currently at 3.2 million tonnes and deficit at 1.9 million tonnes.
According to him, the Department of Fisheries and Aquaculture in the ministry is the only competent authority empowered by the Nigeria Sea Fisheries Act to issue distant water fishing licence for the importation of frozen fish into Nigeria.
"The department does not issue licence for the importation of frozen farmed fish into Nigeria through the land borders.
"The smuggling of unhealthy frozen fish into the country is detrimental to the progress being made toward guaranteeing the good health and nutrition of Nigerians.
"We will continue to partner with the Nigeria Customs Service, the Navy, marine policy to see how we can clamp down on the offenders.
"Even those that have brought the produce into the country, we are setting up a taskforce that will go round different cold rooms, like what Customs is doing to rice.
"Any cold room that we find these fishes, we will seal them up, ensure you pay the $250,000 fine because laws are meant to be obeyed," he said.
The minister said that consumption of those imported frozen foods were major cause of some health challenges being experienced in the country.
Lokpobiri, who frowned at the rising cases of kidney disease among children between the ages of five and seven, assured that the government would fight the menace to a halt.
In an interview, The National Chairman, Association of Indigenous Seafood Stakeholders, Lamina Rasheed, tappealed to the Federal Government to release foreign exchange (FOREX) for the importation of fish.
He said that getting FOREX at a cheaper rate would ensure reduction in the price of the produce and make it affordable.
The chairman said the illegal importation of fishes was detrimental to their business.
Rasheed said that members of the association paid import duty of 14 per cent, which amounted to millions of naira to the Federal Government while the illegal importers pay next to nothing through the land borders.
According to him, it is difficult to compete with them in the market because they slash their prices.
He attributed the high cost of fish to the current exchange rate, adding that the frozen fish did not enjoy FOREX from the Central Bank of Nigeria (CBN).
"Before, we were getting FOREX from the government but now, we are buying from the open market.
"When you pay 14 per cent and somebody is paying zero per cent, how do you sell your commodity?
"Therefore, all the fishes we brought legally into the country are currently stocked in the cold room because we cannot afford to lose our money or bank's money.
"We have a lot of stocks in the cold room, which are unsold," Rasheed said.
Culled from: http://shipsandports.com.ng/fg-prosecute-illegal-fish-importers/
Nigerian ports get improved safety standards
March 9th, 2017
The United States Coast Guard (USCG) has declared that safety status of the Nigerian ports as improving, commending the level of compliance with International Ship and Port Facility Security (ISPS) Code.
The USCG team, which was in Nigeria to examine the level of compliance with the international ISPS code assured of their support to Nigeria towards achieving a safer ports, jetties and terminals.
The leader of the delegation of the United States Coast Guard, Commander Thomas Foster, commended Nigerian Maritime Administration and Safety Agency (NIMASA) for its strides in ensuring safety at the ports and expressed satisfaction with the infrastructural development as regarding ISPS Code implementation in the ports visited in Lagos.
He said: "It appears that the energy that NIMASA has at the ports is very tremendous, as seen in all the ports visited in Lagos. The level of compliance has tremendously improved compared to our last visit. I therefore assure NIMASA that we will continue to work closely to achieve a safer ports, jetties and terminals in Nigeria".
The Director General NIMASA, Dr. Dakuku Peterside, however assured of the Agency's determination to ensure total compliance with the ISPS Code in all ports, terminals and jetties in Nigeria.
The DG who made this disclosure in Lagos when a delegation of the United States Coast Guard (USCG) led by Commander Thomas Foster came on an assessment visit of Nigerian ports and terminals across the country, described the USCG as the most valued partner in ensuring that our ports are safe for business.
He also reiterated that Nigeria places high premium on issues that border on security and as such, NIMASA as the Designated Authority (DA) for the ISPS Code implementation is leaving no stone unturned to achieve 100 per cent implementation of the ISPS Code in Nigeria. This he said will guarantee the safety of the vessels calling or leaving our ports.
"There is absolutely no doubt that we are determined to get it right; we only need support, assistance and all the encouragement we can get. We are determined to work with the United States Coast Guard to get it right in order to ensure our ports are safe.
Let me also reiterate that as a country, we appreciate the importance of getting security right at our ports, jetties and terminals and that we are committed to it", Peterside said.
He also used the opportunity to appeal to the USCG to continue to render necessary assistance to NIMASA, noting that the Agency is open to support and partnership from them.
The International Ship and Port Facility Security (ISPS) Code is an amendment to the Safety of Life and Sea (SOLAS) Convention (1974/1988) on minimum security arrangements for ships, ports and government agencies.
Having come into force in 2004, it prescribes responsibilities to governments, shipping companies, shipboard personnel, and port/facility personnel to detect security threats and take preventative measures against security incidents affecting ships or port facilities used in international trade.
Culled from: http://guardian.ng/business-services/nigerian-ports-get-improved-safety-standards/
Smuggling, import decline threaten customs’ N1.1 trillion revenue target
March 9th, 2017
The Nigeria Customs Service (NCS) may not meet its N1.1trillion revenue target for 2017 as smuggling continues at the nation's points of entry. The Guardian learnt that the customs failed to meet its 2016 revenue target due to a high level of smuggling and reduction in the volume of import. The agency had set a target of N1 trillion, but generated N898 billion as revenue (including Value Added Tax) last year.
The failure of the customs, one of the crucial revenue-generating agencies for government, to meet its target will mean less money for government to execute its projects and programmes to develop the country and take it out of the current recession.
More than this, it underscores the depth of inefficiency that has come to define port operations in Nigeria, a situation that has forced many importers to migrate their businesses to neighbouring ports of Benin Republic and Togo.
Recently, the Comptroller-General of Customs, Hameed Ali, set another target of N1.1 trillion for 2017, hoping that his team would work strictly in compliance with extant laws to enable it to achieve the goal. Ali directed all the area controllers to ensure strict compliance with extant laws to achieve its revenue target.
He said the area controllers must either "shape up or ship out" as there is no place for complacency in the customs that plays the crucial role of
revenue collection and border security. In a statement, Ali declared 2017 as a year of training and re-training, adding that "ignorance will not be an excuse for any officer as there will be refresher courses for them in batches this year."
The comptroller-general charged customs area controllers to step up supervisory roles for their subordinates; ensure tighter border security, block revenue leakages, punish erring officers, promptly reward hard work and facilitate robust stakeholder engagement for mutual understanding, among others.
But experts in the industry say the target may be a mirage again this year, if proper measures are not put in place to combat the rising cases of smuggling.
A customs officer who preferred anonymity said the target might not be realistic going by the circumstances surrounding importation which has reduced drastically. He also complained about the high level of smuggling around the borders. "Setting target is good, I commend the CG for that, but we need thorough work to meet that target," he said.
The National President of the Association of Nigerian Licensed Customs Agents (ANLCA), Olayiwola Shittu, described the target as "anticipatory, not realistic."
In an interview with The Guardian, Shittu said: "That is what they did last year, and they did not meet the target. They cannot meet it. Are people going to steal cargoes? It appears they are optimistic; they are waiting for the dollar to fall and naira to appreciate so that more people can import. It is an anticipatory target, as far as I am concerned, it is unrealistic.
"There is no magic on the issue of target, you cannot get target and get trade facilitation. We only hope that officers will not cash on it and be giving frivolous bills on imported cargoes. That is the only challenge that we have as customs agents, because everywhere you go now, they will tell you we have a target to meet.
"What we want is for customs to use transaction value in charging, this is in line with the global General Agreement on Tariffs and Trade (GATT). But now that they are talking of target and they will start imposing bills on people, it appears all that government wants is money, they are not looking at trade facilitation," he said.
The customs spokesman, Federal Operations Unit (FOU), Jerry Attah said the unit was determined to combat smuggling in the country, although it is not a revenue-generating unit.
"FOU is not part of the target because its operations are based on anti-smuggling. We are not for revenue generation. However, we always make some interventions. What we have is to reduce smuggling to the barest minimum and enhance trade facilitation," he said.
The FOU seized 1,870 50kg bags of different brands of foreign parboiled rice, and 43 kegs of 25 litres foreign vegetable oil, alleged to be contrabands from Sango market in Ogun State last week.
Attah attributed the failure to achieve the 2016 target to the difficulty in accessing foreign exchange and ban on importation of 41 items by the Central Bank of Nigeria (CBN).
According to him, the service was given a target of N937 billion as revenue in 2016. "The strict insistence of the comptroller general on the application of instant laws enabled the service to generate a total that is inclusive of VAT of N898 billion. If VAT is removed, duty collection only is N720 billion, our performance represents 76.90 per cent. Hopefully we will do better in 2017,'' Attah said.
Culled from: http://guardian.ng/news/smuggling-import-decline-threaten-customs-n1-1-trillion-revenue-target/
Government spends N2.4tr on fuels, lubricants import
March 9th, 2017
The Federal Government spent N2.4 trillion on the importation of fuels and lubricants in 2016, according to the National Bureau of Statistics (NBS).
The agency in its fourth quarter (Q4) foreign and merchandise trade statistics released at the weekend, disclosed that about 18.4 per cent of the total cost was used for the importation of Premium Motor Spirit (PMS) during the year under review.
On a quarterly basis Nigeria spent N699.2 billion for the importation of fuels and lubricants, which if retained in the country, could build institutions that would provide jobs for graduates.
The bureau further disaggregation of fuels and lubricants revealed that Premium Motor Spirit dominated fuel and lubricants imports with 20.2 per cent or N469.2 billion, while other fuels and lubricants accounted for the balance of 9.9 per cent during the period.
The bureau said the structure of Nigeria's export trade is still dominated by crude oil exports, which contributed N2.4 trillion or 81.4 per cent to the value of total domestic export trade in Q4 2016.
The percentage of crude exports to total exports in Q4 thereby decreased to 81.4.0 per cent from 84.3 per cent in Q3, but increased when compared to Q4 2015, accounting for 79.3 per cent of the exports.
It disclosed that Nigeria's import trade by origin in Q4 showed the country imported goods mostly from China, Belgium, Netherlands, the United States and India. They respectively accounted for N404.1 billion or 17.5 per cent, N356.4 billion or 15.4 per cent, N230.0 billion or 10.0 per cent, N205.6 billion or 8.9 per cent, and N113.9 billion 4.9 per cent of the total value of goods imported during the quarter.
Further analysis of Nigeria's imports by continent during the period, revealed that it consumed goods largely from Europe with import value of N1, 127.9 billion or 48.9 per cent, adding that it also imported goods valued at N761.9 billion or 33 per cent from Asia and N312.8 billion or 13.6 per cent from the Americas.
The bureau stated: "Import trade from Africa stood at N82.7 billion or 3.6 per cent while imports from the region of ECOWAS amounted to N15.1 billion.
"For full year 2016, Nigeria imported mostly from China with 19.7 per cent of total imports followed by the Netherlands, 11.7 per cent then the USA, eight years.
"With respect to import by continent, Nigeria imported the most from Europe, 46.7 per cent then Asia, 35.8 per cent and the Americas, 12.2 per cent. Nigerian imports from Africa stood at 4.1 per cent of total imports in 2016, with imports from within ECOWAS at 1.2 per cent."
The total value of Nigeria's merchandise trade at the end of Q4 was N5, 286.6 billion, or 10.6 per cent above the N4.781 billion recorded in Q3.
"Total export value for fourth quarter of 2016 stood at N2.978 billion, which was 28.3 per cent more than the value of the previous quarter. Total import for fourth quarter of 2016 was N2.308 billion, which represented a decrease of 6.1 per cent with the value of the preceding quarter.
"The much faster rise in the value of exports relative to the rise in imports brought the Country's trade balance to N671.3 billion during the review period, showing a stark improvement from the negative trade balance of -N136 billion recorded in the preceding quarter.
"This development stemmed from a rise of N656.3 billion or 28.3 per cent, in the value of exports combined with a decline of N150.9 billion or 6.1 per cent, in the value of imports against the levels recorded in the preceding quarter," it added.
Meanwhile, the Executive Secretary, Lubricant Producers Association of Nigeria (LUPAN), Emeka Obidike, said indigenous blenders are constantly being threatened with the shutting down of their plants and seizure of their consignments.
He said they are also persistently faced with the risk of losing their businesses, corrosion of their goodwill and professional integrity, asphyxiating demurrages and transactions and default in the repayment of facilities.
Obidike alleged that the National Agency for Food, Drugs Administration and Control (NAFDAC) had in many occasions confiscated their consignments and also gone ahead to detain the consignments of importers, insisting on being presented with NAFDAC licences and proof of payment of dues.
He explained that LUPAN members are duly licensed by the DPR to import, store and blend base oil in Nigeria.
Culled from: http://guardian.ng/business-services/government-spends-n2-4tr-on-fuels-lubricants-import/
Nigeria’s external trade rises by 6.5%, hits N17.3bn
March 8th, 2017
The National Bureau of Statistics (NBS) said the value of the total trade at the end of 2016 was N17. 35 billion. The NBS said that the figure was 6.5 per cent higher than the value recorded in 2015.
The bureau announced this in a report on "Merchandise Trade Intensity Index/Re-exports for fourth quarter", released in Abuja.
The report, however, stated that Nigeria's external trade in the fourth quarter of 2016 was valued at N5.28 billion.
"The export component stood at N2.98 billion while the import component stood at N2.31 billion leading to a trade surplus of N671 billion.
"Trade by sector showed that crude oil exports had the largest share of the total trade, accounting for N2.43 billion or 45.9 per cent trade in fourth quarter.
"The second major contributor to total trade by sector was manufactured goods with N1.17 billion or 22.1 per cent of total trade," it stated.
The report stated that manufactured goods were followed by the non-crude oil products, which was also a major contributor to total trade in the quarter under review.
"The non-crude oil products stood at N1.15 billion or 21.8 per cent while Agricultural goods accounted for N212.7 billion or 4 per cent.
"Raw material goods accounted for N309 billion or 5.9 per cent and Solid mineral goods stood at N13.1billion or 0.3 per cent of total trade in the quarter."
The report stated that Nigeria's export intensity in the months of October, November and December 2016 was the highest for South Africa with export intensities of 8.9, 7.3 and 4.1, respectively.
It stated that export intensity in the fourth quarter was also intense with India with export intensities of 5.8, 5.8 and 1.7 for the last three months of 2016.
" Spain and Netherlands also had high export intensities with export intensities of 4.8, 2.9 and 2.0 for Spain and 2.2, 1.5 and 2.2 for the Netherlands.
"Although United States was one of Nigeria's major trading partners, its export intensity was low with 0.6, 0.6 and 0.2 for the last three months of 2016."
Meanwhile, the report stated that Nigeria imported mainly from China with total imports of N404.1billion or 17.5 per cent of total imports.
It stated that China was followed by Belgium with N356.46 billion or 15 per cent while import trade with Netherlands which was the third highest was valued at N230 billion or 10 per cent.
"The remaining trading partners contributed relatively lower proportion of the total import trade.
"United States accounted for N205.6 billion or 8.9 per cent while India accounted for N113.9 billion or 4.9 per cent," the report stated.
Culled from: http://shipsandports.com.ng/nigerias-external-trade-rises-6-5-hits-n17-3bn/
FG okays $20bn Ogidigben gas project for Niger Delta
February 28th, 2017
The Federal Government has endorsed plan to build a $20 billion gas revolution industrial park in Ogidigben, Delta State.
Acting President Yemi Osinbajo disclosed this at the Aso Rock Presidential Villa in Abuja while meeting with international investors and developers who presented the plan for the project.
The acting president, who assured of the government's commitment to the development of the Niger Delta region, said: "The importance of this project is underlined by the presidential attention it is attracting. The Presidency is very interested."
Osinbajo said the Federal Government, in order to demonstrate its commitment, already had a steering committee chaired by the Minister of State for Petroleum Resources, Ibe Kachikwu.
"We are unwavering. We take the project very seriously and glad to see you are committed and ready to make several other commitments. This is a process that we intend to see happen," the Acting President said.
Osinbajo's spokesman, Laolu Akande, said in a statement that the building of an industrial gas hub was one of the feedbacks received during the Acting President's visit to Delta State.
He said the park, envisaged to be a regional hub for all gas-based industries, would cover 2,700 hectares with fertiliser, methanol, petrochemicals and aluminium plants "located in the park that has already been designated as a Tax Free Zone by the Federal Government."
He said a group of international investors and developers under a consortium by Dubai-based firm, AGMC, presented the plan for the establishment of the gas park to the meeting.
Akande stated: "The consortium is made up of Fortune 500 companies like the GSE & C of South Korea, the China Development Bank, Power China and several others global operators from Asia and the United Arab Emirates in the Middle-East. Under the plan, about $20 billion would be invested to develop the Gas Revolution Industrial Park and generating 250,000 direct and indirect jobs in the process.
"The industrial park would be a cluster for several industries in one location benefiting from an efficient, cost-competitive and abundant supply of natural gas, proximity to a deep sea port and centralized utilities, and services such as uninterrupted power, world class telecommunications and processed water.
"The park, originally conceived by the NNPC, is located about 60km from Warri, and is about 1km away from the operational base of Chevron Nigeria Limited. It will be connected to over 18 trillion Cubic Feet of gas reserves in fields such as Odidi, Okan, Forcados, located within a 50km radius. It is equally planned that the park will be connected to Nigeria's most dominant gas pipeline network-ELPS, enabling supply of gas to and from the park."
Kachikwu expressed confidence that the project would bring the much-needed succour to the people of Niger Delta region and the oil-producing states.
The leader of the group of investors and developers, Sheik Mohammed Bayo, described the project as important to resolving the Niger Delta crisis.
Culled from: http://shipsandports.com.ng/fg-okays-20bn-ogidigben-gas-project-niger-delta/?utm_source=feedburner&utm_medium=email&utm_campaign=Feed%3A+Shipsandportscom+%28shipsandports.com.ng%29
FG to reduce agencies operating in ports to six
February 24th, 2017
The Federal Government is currently working towards streamlining the number of agencies operating in the nation's ports to only six from about eight.
This is part of the decisions reached at an expanded meeting of the Presidential Enabling Business Environment Council (PEBEC) presided over by the Acting President Yemi Osinbajo at the Presidential Villa, Abuja on Tuesday.
According to a statement by the council's secretariat, the meeting approved a national action plan to be implemented across its three priority areas of entry and exit of goods; entry and exit of people; and government transparency and procurement over the next 60 days to deliver tangible changes for Small and Medium-scale Enterprises in Nigeria.
The reforms, the statement added, would also help improve Nigeria's ranking in the World Bank Doing Business Index 2018.
The statement read in part, "The reforms are to be implemented by the Enabling Business Environment Secretariat, which became operational in October 2016 and has Dr. Jumoke Oduwole, the Senior Special Assistant to the President on Industry, Trade and Investment as its coordinator.
"The Council was also briefed on the forthcoming EBES stakeholders' engagement forum scheduled for Kano and Lagos on February 23 and 24, respectively. The forums are part of steps being taken to receive feedback and ensure widespread adoption of the PEBEC reforms.
"One of the reforms to be implemented to ease the process of starting a business is the upgrade of the CAC online portal to ensure document upload capabilities that will make it possible for new businesses to be registered online from start to finish without having to visit the CAC office.
"Also, work is ongoing to streamline the number of agencies operating at the nation's ports to just six. Council also listened to updates on the proposed Single Window Initiative at the ports, which is expected to become operational by Q4 2017."
On the entry and exit of people, the statement said the PEBEC observed that the visa on arrival and 48-hour visa processing procedures of the Nigeria Immigration Service were already operational with various levels of compliance.
It said the council was also collaborating with state governments like Lagos and Kano to make the processes for obtaining construction permits and registering properties faster, cheaper and easier.
It added, "In addition, PEBEC will work with the National Assembly to pass important bills like the National Collateral Registry Bill and the Credit Bureau Services Bill, which would ease access to credit for SMEs.
"To show their commitment to PEBEC's reform agenda, the Senate President, Bukola Saraki; and the Speaker of the House of Representatives, Yakubu Dogara, attended Tuesday's meeting."
Culled from: http://shipsandports.com.ng/fg-reduce-agencies-operating-ports-six-2/
CBN Pumps $500m into FX Market, Banks Take up Only $371m
February 22nd, 2017
In keeping with its promise to ease the difficulties encountered by Nigerians in obtaining funds for foreign exchange transactions, the Central Bank of Nigeria (CBN) tuesday carried out special wholesale intervention forward sales in the interbank forex market by offering $500 million.
But 23 banks were only able to take up $370,810,810.79 to meet the visible and invisible requests of the customers.
On Monday, the CBN also sold $80 million to banks to meet the demands of their customers who had applied for forex for school fees, medicals, and personal and business travel allowances, out of the $125 million uncleared backlog for invisibles.
A breakdown of the forwards indicated that $216,465,671.02 was for 30 days, while $154,345,139.77 was for 60 days.
The CBN also yesterday did spot sales of $1.5 million to four banks, totaling $6 million.
The Bank also offered $41 million for sales, of which $35 million was taken up for the payment of school fees, medical bills and personal and business travel allowances.
With the interventions on both days, the CBN sold $491.8 million to commercial banks and authorised dealers in the market.
A source at the CBN disclosed that the qualified bids for the greenback ranged from N315 to N360, adding that seven banks received full allotments of their respective bids valued at $37,500,000 each.
Other banks received allotments ranging from $46,512.50 to $15,578,081.51.
A CBN source informed THISDAY that the central bank actually offered $500 million to the banks yesterday through special wholesale intervention forward sales.
But of this amount, the banks were only able to take up $371 million at a marginal exchange rate of N315 to the dollar.
"The reason the banks could not take up the entire $500 million offered by the central bank was because of lack of naira liquidity," the source explained.
For the $500 million on offer, forex authorised dealers were required to send their request for sums not exceeding 7.5 per cent of the amount on offer.
Confirming the wholesale intervention by the CBN yesterday, central bank spokesman, Mr. Isaac Okorafor, said the Bank's intermediation in the forex market was the first wholesale intervention aimed at easing the pressure of access to forex by Nigerians who intend to meet obligations that fall under visible and invisible needs categories.
He further confirmed that the CBN offered $500 million for sale to the banks, but not all of them provided enough naira backing to pay fully for their respective bids.
While expressing optimism that the wholesale intervention of the CBN would substantially ease the forex pressure on visible and invisible needs of customers, Okorafor assured that the Bank would continue to make interventions based on qualified bids from the banks on the requests of their customers.
He reiterated that the central bank was more than ever ready to support the interbank market by ensuring liquidity and transparency to guarantee efficiency in the forex market.
Okorafor asked all market participants to contribute their quota and assist in ensuring that the new measures put in place by the CBN can guarantee the steadiness of the financial market, as well as the growth and development of the economy to the benefit of all Nigerians.
The CBN, after a meeting with Deposit Money Banks (DMBs) last Friday, issued new policy actions aimed at easing access to forex for personal and Business travel allowances, as well as educational and medical fees, among others.
As part of its new policy action, the CBN also directed all banks in the country to open forex retail outlets at major airports as soon as logistics permit them to do so.
The impact of the new FX policy had a positive impact on the parallel market yesterday, where the naira appreciated by N10 to close at N515 to the dollar, stronger than the N525 at which it closed on the previous day.
Before the close of business, market watchers said the naira actually appreciated to N510 to the dollar before settling at N515 over concerns that the CBN, in its circular on Monday, had asked authorised dealers to demand for tax clearance from their customers.
In line with the circular, banks were reported to have started demanding for tax clearance from their customers, resulting in added pressure on the parallel market.
However, a CBN official informed THISDAY last night that the demand for tax clearance was erroneous and would be corrected today in a revised circular to be issued on the new actions for the forex market.
He said: "The CBN is not FIRS. The inclusion of the tax clearance was a mistake and will be corrected. Our desire is to meet all genuine demand and not drive bank customers back to the parallel market."
In addition, CBN yesterday issued operational guidelines for the special wholesale intervention forward sales for forex transactions not exceeding 60 days.
It restated that the policy was aimed at enhancing transparency and confidence in the sector.
The CBN noted that it would not apply all the provisions of Clause 2.4.3 (SMIS-Wholesale) of the revised guidelines for the operation of the Nigerian Interbank Foreign Exchange Market of June 2016 for the new window.
The CBN in a circular signed by its Director, Financial Market Department, Dr. Alvan Ikoku added that banks will not be allowed to allocate funds for customers' letters of credit (LCs) which had already benefited from past SMIS that are yet to mature.
The circular further restricted any bank from exceeding its Net Trading Position limit at any particular time under the new FX regime.
The central bank also pegged the allowable spread between bid and offer at 50 kobo and banks will be required to open equivalent amounts of fresh LCs (confirmed or unconfirmed) for any of their customers and send evidence of such fresh LCs within a week of release of reaction results.
Among other conditions for participating under the special intervention window, the CBN also forbade multiple bid entries and insisted that all allotments be trade backed.
It warned that any bank, which fails to comply with the rules of the special wholesale window and other extant forex guidelines, will be sanctioned, including executives and other officers of the affected bank.
This came as market analysts threw their weight behind the new FX measures announced by the CBN on Monday.
The CEOs spoke in separate interviews with THISDAY yesterday.
Commenting on the action, the chief executive of Financial Derivatives Company (FDC) Limited, Mr. Bismarck Rewane said the CBN was moving slowly in the right direction. "But a lot more work needs to be done."
Rewane added: "It is commendable on the fact that they had the courage to finally understand that the naira is overvalued.
"Secondly, we must move away from multiple exchange rates. Multiple exchange rates are a recipe for round-tripping.
"There is a crisis of confidence and crisis of supply. As the crisis of supply is being dealt with, the crisis of confidence also needs to be dealt with as well and we need additional courage to do that."
The Director General of the West African Institute for Financial and Economic Management, Prof. Akpan Ekpo, held the view that the new measures announced by the CBN would help address the misalignment between the official and parallel market rates.
According to the former university vice chancellor, "They (CBN) figured out that part of the problem was access to forex.
"So, if the banks open retail offices at the airports, it would facilitate access to a lot of people and it may become more transparent.
"The misalignment in the currency is causing a lot of distortions in the economy.
"But I am advising that the CBN should continue to prioritise forex access to manufacturers so that they can import raw materials and equipment.
"But in the long term, we cannot keep importing the things that we can produce here. If you look at the data, imports have reduced due to the removal of those 41 items from accessing forex."
He stated that the improvement in forex supply in the country would help dampen the effect of rising rate of inflation.
Ekpo, however, added: "But we must all understand that Nigeria has a forex supply problem. It is not really a CBN problem. We get forex majorly by selling crude oil.
"So, we need to change the structure of our economy so that we can have other sources of earning forex. If we have a viable manufacturing sector that exports most of its products, we would have enough forex."
Also, the chief executive of BIC Consultancy Services, Dr. Boniface Chizea, expressed optimism that the CBN would be able close the wide gap between the parallel and interbank FX markets "if and only if we meet all the demand for foreign exchange at the official window".
He added: "Once demand is sought outside this window, it must be at a premium, even if it is from the bureau de change.
"The move to make dollars available to the banks to sell to those who demand for PTA, school fees and medicals at a rate lower than the parallel market rate, which was dangerously trending south, is a masterstroke.
"This should reduce the demand pressure at the parallel market, resulting in an appreciation which would catch some economic agents that if they are not careful they would get their fingers burnt."
Culled from: https://www.thisdaylive.com/index.php/2017/02/22/cbn-pumps-500m-into-fx-market-banks-take-up-only-371m/
Non-oil revenue improving, no need for IMF loan – Finance minister
February 22nd, 2017
Nigeria sees no need to apply for an International Monetary Fund programme as it is pursuing its own economic reform plan, Finance Minister Kemi Adeosun said on Tuesday.
Sharp falls in the price of crude oil, its main export, have tipped Africa's biggest economy into its first recession for 25 years and hammered the naira currency, prompting speculation it might need IMF funding to cover a growing budget deficit.
"For us the IMF is really a lender of last resort when you have balance of payments problem. Nigeria doesn't have balance of payments problems per se, it has a fiscal problem," Adeosun told CNBC in an interview.
"We are already doing as much reform as any IMF programme would impose on Nigeria," she said. "Nigerians want to take responsibility for their future. We must have our home-grown, home-designed programme of reform."
Adeosun said non-oil revenues were improving while the government was fine-tuning an economic reform plan needed to support an application for a loan of at least $1 billion from the World Bank. It is also seeking further funds from the African Development Bank.
"Non-oil revenue is improving very steadily. All the measures we have put in place are beginning to yield fruits," she said, without giving numbers.
"Oil production is back up, we are very grateful for that, but we should be careful for getting excited about that."
Diplomats and officials have told Reuters the Nigeria, Africa's leading crude producer, which relies on oil revenues for most of its income, plans to finalise its proposal to the World Bank this month.
The country needs to plug a gap in its record 7.3 trillion naira ($23.17 billion) 2017 budget, which contains a number of measures aimed at stimulating the economy.
It had initially promised to submit an economic plan to the World Bank by the end of December but did not do so, sources told Reuters last month.
Nigeria will also present its economic proposal to the African Development Bank to help release a second loan tranche worth $400 million to support the budget, officials have said.
Culled from: http://shipsandports.com.ng/non-oil-revenue-improving-no-need-imf-loan-finance-minister/
As Emefiele Targets $40bn FX Reserves, CBN’s Strategy Becomes Apparent
February 13th, 2017
The strategy adopted by the Governor of the Central Bank of Nigeria (CBN), Mr. Godwin Emefiele to rebuild the country's foreign exchange reserves has been identified as one of the primary reasons the country's Eurobond issue was oversubscribed by 780 per cent last week, THISDAY has learnt.
Investigations have shown that as of last week, Nigeria's foreign reserves, which had hit $29.5 billion, climbed to $30.5 billion - the highest in more than 12 months - following the success of the Eurobond.
A CBN official, who accompanied Emefiele and others in the federal government delegation on the Eurobond road show to the United Kingdom and United States of America, informed THSDAY that the strategy adopted by the governor worked wonders in boosting investors' confidence in the Nigerian economy and the country's ability to meet its foreign obligations.
He also disclosed that with the single-mindedness exhibited by the CBN governor to rebuild FX reserves, he has set a target to grow reserves to $35 by the middle of 2016 and $40 billion by the end of the third quarter of this year.
The official, who preferred not to be named but is one of the architects of the central bank's FX policy, held the view that contrary to the argument by several analysts that devaluing the currency and allowing a true float of the naira would attract foreign investors, it is actually the accretion of foreign reserves that would instill confidence in the economy.
"With a comfortable level of FX reserves, foreign investors will be assured that once they want to take their funds out, they can do so without hindrance.
"If you noticed, once reserves fell to as low as $21 billion, investors were not attracted to the Nigerian economy, irrespective of whether we devalued or whatever we did with the FX market.
"As long as they felt that you had insufficient reserves to meet your foreign obligations, they were not going to remain comfortable about investing in the Nigerian economy. They continued to exit the economy.
"For example, look at South Africa and Kenya which have floating exchange rates, yet they have found it difficult to attract investors. They continue to flee their economies in droves.
"However, since the International Monetary Fund (IMF) announced in November that it had approved a $12 billion standby facility for Egypt, the country has been attracting almost $300 million a month.
"What this means is that investors need to feel comfortable with your level of FX reserves and your ability to meet your obligations when they fall due.
"So instead of the CBN getting distracted by the debate over devaluation or no devaluation, it has focused on reserves accretion, which as you know help to attract investors during the Eurobond sale last week.
"Given what we know, the target by the CBN is to increase reserves to $35 billion by the middle of this year and $40 billion by the end of the third quarter," he said.
The official said the accretion of FX reserves could be attributed to two factors - the improvement of oil prices following the agreement by OPEC and Russia to slash oil production by 1.2 million barrels per day, and the relative peace achieved in the Niger Delta.
"The oil price rally coupled with improved output from Nigeria have resulted in increased foreign earnings in recent months.
"If you recall, about a year ago, revenue from the sale of crude oil fell to less than $400 million a month, but now Nigeria is making between $600 million and $700 million, enabling the CBN to save more," he explained.
He was quick to add, however, that whatever savings the central bank is making must be complemented by a comprehensive fiscal and industrial strategy by the ministries and agencies of government.
"A fiscal and industrial strategy is still required, because saving FX reserves alone will not give you the silver bullet," he said.
The official also allayed concerns that the savings being made by CBN could delay payments of maturing trade obligations and in turn continue to exert pressure on the FX market.
He said: "The CBN remains committed to funding maturing trade obligations through FX forwards on the interbank market.
"Importers with eligible transactions have nothing to be concerned about, as the central bank will continue to support them through the forwards arrangement already in place on the interbank market.
"Also, confidence is growing that the speculative attacks on the naira in the parallel market would subside, because with the accretion of reserves, the CBN will have a schedule that would enable it to meet demand through FX forwards."
Also, THISDAY learnt that with the tenure of two deputy governors of the Central Bank of Nigeria (CBN) gradually drawing to a close, some Nigerians have started jostling for the top jobs.
Specifically, while the Deputy Governor, Economic Policy, Dr. Sarah Alade, who has been in the position since March 26, 2007, is expected to step down next month, the tenure of the Deputy Governor, Operations, Alhaji Suleiman Barau would come to an end by the end of this year.
Both of them would have served two terms of five years each when their tenures expire.
Section 8 (1) of the CBN Act 2007 states that "the Governor and Deputy-Governors shall be persons of recognised financial experience and shall be appointed by the President subject to confirmation by the Senate on such terms and conditions as may be set out in their respective letters of appointment".
To this end, THISDAY learnt that politicians seeking the plum jobs for their cronies as well as economists and other financial market experts who feel they are qualified for the jobs are already lobbying officials in the presidency.
"There is intense lobbying for the CBN deputy governors' jobs. Those seeking for these jobs are already putting their contacts in the presidency under pressure," a source who pleaded to remain anonymous said.
The CBN Act is silent on whether a deputy governor can be appointed from within the central bank on the recommendation of the CBN governor.
But there have been instances where directors of the central bank have been elevated to the position of deputy governors.
There have also been instances where a CBN governor made the recommendations and were approved by the president.
For instance, prior to her appointment as deputy governor, Alade was Director, Banking Operations Department.
In that capacity, she served as Chairman Board of Directors, Nigeria Interbank Settlement System (NIBSS) and was the Secretary, National Payments System Committee (NPSC).
She is from Kwara State, and in line with the federal character principle, she would likely be replaced by someone from any of the states in the North-central geopolitical zone.
As deputy governor (Economic Policy), Alade superintends the Economic Policy Directorate comprising the Research, Monetary Policy, Trade and Exchange, Statistics Departments and Financial Markets Departments.
Also as the Chairperson of the Monetary Policy Implementation Committee (MPIC), she interfaces with operational departments and coordinates technical inputs for the Monetary Policy Committee (MPC).
Barau, who is expected to step down by December, is from Kaduna State and would also likely be replaced by someone from the North-west region of the country.
He superintends the Banking and System Payment Directorate, Branch Operations, Currency Operations, Information Technology and Reserve Management.
Culled from: http://www.thisdaylive.com/index.php/2017/02/13/as-emefiele-targets-40bn-fx-reserves-cbns-strategy-becomes-apparent/
Notore signs MUo with Cross River State on 255,000 Metric ton-Producing Rice Mill
February 10th, 2017
Notore Chemical Industries Limited in a committed mission in securing food sufficiency in Nigeria. has signed agreement with the Cross River State Government to help establish a 255,000 metric ton-producing international rice mill and a 20,000-hectare rice farm in the state.
The integrated rice processing mill, which has the potential to create 15,000 new jobs and support the development of 500 Commercial Farms, will be complemented with a state wide out-growers buy-back scheme to supply the extra paddy rice that the mill would require.
Notore Chief Executive Officer Onajite Okoloko, while speaking on the new development said that, "The initiative taps into three of the Federal Government's seven-point agenda in the areas of food security, employment and wealth creation. Notore is committing huge resources to build capacity in Nigeria for world class rice production. Overall, this will boost food production, reduce rice importation, stimulate rice exportation and aptly position the nation towards food sufficiency."
As a champion of the African Green Revolution, he assured that Notore's dream was to see Nigeria become a self-sufficient and food secure nation and Notore's ambition doesn't stop there.
" It has plans in progress to also establish another rice mill and 20,000-hectare rice farm in Taraba State to augment efforts of the Calabar rice mill. This will ensure a steady supply flow after take-off", adding that, "Nigeria has the potential to meet its five million metric ton rice needs and export to other African countries, but for now imports stand at two million metric tons, worth over $1billion annually from Asia. We consume about five million metric tons of rice per annum but produce three million metric tons, mostly of low quality; demand is estimated to grow to over eight million metric tons in the next decade while processing capacity is limited. The country operates significantly below capacity with insufficient raw material, and there is huge preference for long grain polished rice over local varieties."
Agriculture is a priority for the state and Onajite further added that: "Notore has already established a world class supply and distribution system that will guarantee the off-take of paddy rice from the small scale out-grower farms established nationwide to ensure that the required quantity of paddy rice be consistently achieved and channeled to the global and local market."
Notore is well-positioned to champion increasing local production of rice by leveraging world class agricultural skills, building relationships with farmers and a wide distribution network for fertilizer and seeds, which will also serve as a guaranteed market for the farmers.
Culled from: http://www.thisdaylive.com/index.php/2017/02/09/notore-signs-muo-with-cross-river-state-on-255000-metric-ton-producing-rice-mill/
FG May Reverse Forex Restriction on 41 Items, Says Customs
February 10th, 2017
The Zonal Coordinator, Zone ‘A' of the Nigeria Customs Service (NCS), Assistant Comptroller-General, Monday Abueh, has said the federal government may reverse the foreign exchange restriction placed on 41 items imported into the country.
Abueh disclosed this in Ibadan during his familiarisation tour of the Oyo-Osun Commands as part of his visits to Customs formations under his jurisdiction.
The Central Bank of Nigeria (CBN) in July 2015, restricted 41 items, including vegetable oil, poultry products, toothpicks, cosmetics, plastic and rubber products, among others, from accessing foreign exchange from the interbank foreign exchange market.
Importers of the restricted items are expected to source their forex requirements from autonomous sources. The policy has been partially blamed for the increased pressure in the parallel market for more than 20 months.
Rationalising the ban, the central bank had said the country had the capacity to produce those items locally.
According to the News Agency of Nigeria (NAN), Abueh said that when government's policies are rolled out, they are in the interest of the people, adding that Nigeria cannot be enriching other countries by allowing some banned items into the country.
He advised officers to be fully sensitised about implementing government policies anywhere they were posted to serve.
Abueh urged officers to also enforce the land ban on imported rice and vehicles.
He said smugglers might try to make Oyo and other land borders their alternative routes since security at Idiroko and Seme had been beefed up.
The zonal coordinator said that the Comptroller-General of Customs, Col. Hameed Ali (rtd.) and its management had redeployed officers at land border commands to ensure that nothing escaped through the routes in the areas.
He also urged the officers to be abreast of excise operations in order to assist with cargo clearance.
Abueh said his visit was meant to continue reminding officers about the federal government's polices as well as the directive given by the comptroller-general on security and protection of lives in the country.
When contacted on Abueh's statement on the restricted 41 items, CBN spokesman Isaac Okoroafor expressed ignorance of the remarks made by the Customs zonal coordinator.
"I don't know what he is talking about or where he got his information on the possibility of the forex ban being lifted on the 41 items.
"What we know is that the restriction imposed on the 41 items was in the best interest of the economy.
"The signs are already visible, as farmers and manufacturers have invested so much to produce those items that can be produced locally and that has translated in considerable forex savings.
"So I do not know where the Customs official got his information, but we know that the forex restriction imposed on the items is achieving the desired results," Okoroafor said.
Culled from: http://www.thisdaylive.com/index.php/2017/02/10/fg-may-reverse-forex-restriction-on-41-items-says-customs/
Nigerian ports berth 19,833 vessels in 3 years
February 9th, 2017
The National Bureau of Statistics (NBS) says the traffic statistics at Nigerian ports recorded 19,833 vessels berthed at the various ports between 2013 and 2016.
The statistics is contained in a report on "Shipping and Port Activities 2013 to 2016" released by NBS on Wednesday in Abuja.
Similarly, the report stated that 544 million tonnages were registered within the period under review.
The report said that 2014 recorded the highest number of vessels berthed as well as tonnages registered while the least were in 2016.
"Tin Can Island Port handled the most ships accounting for 33 per cent of total number of ships that berthed in all ports and 32 per cent of total tonnage registered in all ports.
"It is closely followed by Apapa port which accounted for 28 per cent of ships that berthed and 25 per cent of total tonnage registered.
"Onne port accounted for 15 per cent of ships that berthed and 30 per cent of total tonnage registered.
"Also, cargo traffic statistics revealed a total of 312 million tonnes, 185, 808 cargo traffic was recorded at all Nigerian ports between 2013 and 2016.
"63 per cent or 196,851,236 of the cargo traffic were inwards while 115, 334572 or 37 per cent were outward."
In addition, the report stated that Apapa port handled the most number of inward cargoes accounting for 39 per cent of total inward cargoes.
It stated that the Apapa data was closely followed by Tin Can Island and Delta ports accounting for 31 per cent and 11 per cent respectively.
"Calabar port accounts for 4.29 per cent to record the least.
"Similarly, Onne ports handled the most number of outward cargoes.
"Onne ports accounts for 80 per cent of total outward cargoes and closely followed by Delta and Apapa ports, accounting for 10.63 per cent and 3.52 per cent respectively.
"Also, Calabar port accounts for 0.05 per cent to record the least."
According to the report, the number of passenger traffic within the period under was put at 52,262 while the highest number of passenger traffic was recorded in 2013.
Culled from: http://shipsandports.com.ng/nigerian-ports-berth-19833-vessels-in-3-years/
To view above mentioned report, please click here
The managing director of the Oil and Gas Free Zones Authority (OGFZA), Umana Okon Umana has given the
February 6th, 2017
The managing director of the Oil and Gas Free Zones Authority (OGFZA), Umana Okon Umana has given the assurance that government will retain incentives that have been put in place to attract investment in the oil and gas free zones across the country.
Umana explained that the incentives were specifically designed to support investors operating in the zones. Speaking during official visit to Indorama and Brawal offices in Onne, Rivers State, Umana commended the companies for their show of strong confidence in the nation's economy and pledged to create the enabling environment for Brawal, a free zone developer, and Indorama, a free zone investor, to optimize return on their investments.
Umana explained that OGFZA's support for free zone businesses include unflagging implementation of the policy on ease of doing business, enhanced in part by the one-stop-shop concept in force in the free zones; a regime of attractive package of incentives highlighted by 75per cent import duty rebate, 100 per cent foreign ownership, as well as 100 per cent repatriation of profit and dividends.
Indoram has so far invested $1.2 billion in the free zone and exported more than 1.2 million metric tons of urea last year and supplied a further 300,000 metric tons of the product to the domestic market. Umana reiterated the agency's open door policy and stressed its willingness to solve policy-related problems that could hamper legitimate operations of free zone investors.
He therefore advised businesses at the free zones to bring their policy-related challenges to his attention any time they arise. He also called for more collaboration between investors and the regulatory agency in order to achieve greater synergy and facilitate ease of doing business in the free zones.
Culled from: http://shipsandports.com.ng/fg-retain-75-per-cent-import-duty-rebate-oil-gas-free-zones/
Why does Nigeria import so much rice?
February 3rd, 2017
A long line of customers queue along a glass divide separating them from a rice food station at an eatery in Lagos, Nigeria's commercial capital. Diners can choose between white rice, fried rice and jollof at this popular local restaurant known as "The White House".
A steady flow of customers is served in the main hall, and in two packed adjoining rooms diners are enjoying Nigerian dishes.
Rice is the basis of the popular national dish jollof and a staple across the country.
The problem is not a lack of land, or that there are not enough people to grow it in Africa's most populous country.
During the grain market crisis eight years ago, Nigeria experienced shortages in rice that made the country rethink its food security and ability to supply the local market.
As a result, President Muhammadu Buhari has made rice farming a priority.
Nigerians' appetite for rice means that the country imported nearly 17 million tonnes of it over the past five years. Duties for imported rice are currently 60% and consumers have seen the price of a bag of rice double in the past 12 months.
Many domestic players have been entering the market. Olam, a multi-national agribusiness, set up a rice farm in 2012 in response to government calls for local players to help feed the 170 million Nigerians.
Nigeria's rice in numbers
- Imported nearly 17 million tonnes over the past five years
- Imported 2.3 million tonnes in 2016
- 2016 demand was 5.2 million tonnes
- Spends $5m (£4m) a day for rice shipments
- Rice accounted for 1.26% of the entire budget for 2017
It is a bumpy journey to Olam's farm in Rukubi village close to the Benue River in Nasarawa State. The lush green fields of the farm are an oasis among miles and miles of dusty red road and bushes.
Large metal silos carrying 228,000 tonnes of rice rise up from the ground, gleaming in the scorching afternoon sun. Manager Anil Nair, drives us around 4,500 hectares of the farm and mill.
Most of the farm hands have finished work for the day. They usually work in the rice paddies from 07:00, before the sun gets too hot. Only a few women remain, standing ankle deep in the paddies, planting rice seedlings.
This is one of the largest rice farms in Nigeria and although it grows 50,000 tonnes each year, that is still just a small fraction of the country's demand.
According to the United Nations Food and Agriculture Organisation (FAO), the country imported 2.3 million tonnes in 2016, about half of the country's estimated requirements.
Minister of Agriculture Audu Ogbeh says that the culture of importation has to stop.
"We can't afford $5m a day for rice shipments in this country. It's gone on for 40 years. And I assure you that it's our reckless policy of importation that's brought Nigeria down to where she is now.
Those who keep talking of imports either don't mean Nigeria well or simply refuse to recognise the fact that we can't afford the imports."
However, most farmers in Nigeria are small scale and struggle to get the financing they need to improve farming methods and boost their yield.
Members of the Rice Farming Association of Nigeria say they can only access high-interest loans from commercial banks.
Joseph Jatau Kudu has been farming near the town of Doma in Nasarawa State since 1982. He says the banks charge as much as 30% to lend money.
"It's too high. We end up earning nothing," he says.
Without the capital to mechanise, workers must do everything on his 15-hectare farm by hand.
"Sometimes the tractors are not available. So now I'm using manual labour. It's not as effective as in the case of using a tractor and it's one of the reasons I can't expand."
The agriculture minister claims that Nigeria will become self-sufficient in rice production by the end of the year.
However, critics of government policy not only point to a lack of spending on agriculture, but also to an under-investment in the entire value-chain for rice, from field to cooking pot.
Ninety two billion naira ($302m; £240m) was assigned to the sector in the 2017 budget - only 1.26% of the entire budget for the year.
AgroNigeria's Managing Director Richard Mbaram says that achieving self-sufficiency in the next couple of years is merely a "pipe dream".
"Rice production isn't willed into existence. It is cultivated and systematically sown.
"There is research, there is mechanisation, there is warehousing and storage. There is market opening and market access.
"You cannot drive industrialisation or agro-industrialisation without connecting the farm gate where the production is happening. Do we have that? We're very far back in terms of achieving that."
In the meantime, Nigerians' appetite for rice shows no sign of slowing down.
Culled from: http://www.bbc.com/news/world-africa-38795673
Nigeria’s capital inflows drop by 46.8% in 2016
February 2nd, 2017
The value of capital imported into Nigeria in 2016 fell by 46.86 per cent when compared to what came into the country in 2015, while on a quarterly basis, capital importation dropped by 15 per cent in the last quarter of the year.
Capital inflows into the country dropped to $5.12 billion at the end of 2016 compared to $9.64 billion that came into Nigeria through Foreign Direct Investments, Foreign Portfolio Investments and other investments in 2015. This was the lowest value since the series started in 2007, which reflects the numerous economic challenges that afflicted Nigeria in 2016.
The value of capital imported into Nigeria in the fourth quarter of 2016 dropped by 15 per cent to an estimated $1.548 billion despite a rise in Foreign Direct Investment (FDI) and other investments. The drop in capital inflow was caused by a decline in Foreign Portfolio Investments which declined by 69.8 per cent in the last quarter of the year.
According to the National Bureau of Statistics, decline in portfolio investment was mainly due to base effects: there were large investments in money market instruments and bonds in the third quarter, which were not matched in the final quarter.
The statistics office noted that the weakening of the naira may have had an impact on the inflow figures as a weaker naira means more can be purchased with each dollar, and therefore investment projects requiring naira payments cost less in dollar terms.
As foreign direct investors take a longer-term view, NBS in its report which was released yesterday said, Nigeria's recession and currency problems may carry less weight in investment decisions. FDI had dropped by 27.83 per cent between 2015 and 2016, considerably less than portfolio investment. By contrast, other investment increased between 2015 and 2016, by 3.48 per cent, due to an increase in loans
FDI accounted for $344.63 million, or 22.25 per cent of the total, representing a growth of 1.17 per cent relative to the previous quarter, and of 179.83 per cent relative to the same quarter of the previous year, the first year on year growth rate in five quarters. However, the latter growth rate was high in part due to a base effect as the value of FDI in the final quarter of 2015 was one of the lowest on record.
While other types increased relative to the previous quarter, Portfolio Investment fell by 69.12 per cent. This was partly due to a spike in Portfolio Investment in the previous quarter, but nevertheless there was also a decline relative to the previous year, of 70.16 per cent.
Culled from: http://shipsandports.com.ng/nigerias-capital-inflows-drop-by-46-8-in-2016/
China Exim bank approves N408bn for Lagos-Ibadan rail project
January 31st, 2017
About a week after the Federal Government announced the release of N72 billion as its counterpart fund for the construction of the Lagos-Ibadan standard gauge rail line, the Export-Import Bank of China has approved $1.275 billion (about N408 billion) loan for the project on behalf of the Chinese government.
While Nigeria is to bear 15 per cent of the cost of the project, China will shoulder 85 per cent for the first phase fast rail that will eventually terminate in Kano.
The Managing Director, Nigerian Railway Corporation (NRC), Fidet Okheria, said on Sunday that with the approval of the funds by the Chinese Exim bank, all was set for the commencement of the construction of the modern rail line from Lagos to Ibadan.
"The Exim bank of China has now approved the loan and the next stage is for the Minister of Finance to sign it to signal the beginning of the project," he said.
He, however, said the final signing by the Chinese government for the project to commence could only come after two weeks when the country's new year holiday would have been over.
The Minister of Transportation, Rotimi Amaechi, had last Monday said the Federal Government decided to release the N72 billion as its counterpart funds in full was to ensure that there would be no delay in the implementation of the project.
"On the construction of Lagos-Ibadan railway line, the Minister of Finance has been kind enough to release the counterpart funding in full. I think in the history of Nigeria, this is the first time that we are releasing counterpart funds in full so that there will be no delay," he had said.
The contract was awarded to the China Civil Engineering Construction Corporation last year by the Federal Government and both parties had signed an agreement to that effect.
The new Lagos-Ibadan rail, spanning 156.65 kilometres, is a double line, which is the first phase of the new Lagos-Kano standard gauge line.
The contract for the 2,733km new Lagos-Kano rail was first awarded by the former President Olusegun Obasanjo administration in 2006 at a cost of $8.3 billion to the CCECC, but could not be executed due to paucity of funds.
It was rewarded to the same contractor by the President Goodluck Jonathan administration in 2012 for execution in six phases, starting with the Lagos-Ibadan stretch.
It was learnt that the new rail line would be built on the corridor of the existing narrow gauge Lagos-Kano rail line and but it would accommodate only modern locomotives and other rolling stock meant for standard gauge rail for faster movement.
Culled from: http://shipsandports.com.ng/china-exim-bank-approves-n408bn-lagos-ibadan-rail-project-2/
NPA, Customs move to create ‘single window’ at seaport
January 27th, 2017
To promote trade, the Nigerian Ports Authority (NPA) and the Nigerian Customs Service (NCS) are collaborating to introduce the much-awaited Single Window (SW) platform at the ports.
According to the Managing Director of NPA, Hadiza Balla Usman, the two agencies have embarked on the establishment of SW through an intense automation and introduction of Standard Operative Procedure (SOP) at the port.
Usman said the adoption of Single Window would make Nigerian ports competitive in the international trade network and boost trade facilitation programme of the government.
Speaking during her courtesy visit to the Comptroller General of Customs, Hameed Ali in Abuja yesterday, Usman said the synergy on Single Window would boost government revenue and promote public private partnership through the attraction of local and foreign direct investment.
She said government was aware of its responsibilities to create enabling business environment for businesses to thrive.
She said the Federal Government was determined to make the ports efficient, safe, secure and productive.
Usman said NPA and Customs are the two key agencies driving the logistic and financial portals on behalf of the government and that the duo have the responsibility of working together to build a common industry culture around the ports to achieving the right level in trade facilitation.
She said, "The goal of trade facilitation is to help trade across borders, import and export faster, cheaper and more predictably while ensuring its safety and security.
"Trade facilitation focuses on simplifying and harmonizing formalities, procedures and the related exchange of information and documents between the various partners in a supply chain."
She said transparency, simplification, harmonization and standardisation of port operations will only be achieved by embarking on the establishment of a well articulated single window system.
"I would therefore urge us not to lose track as well as relentless commitment as to meet the target of Nigeria joining 20 other countries to be in the forefront of implementing an efficient, effective and sustainable single window in 2020, " she said.
In his response, Customs Comptroller General Hameed Ali said Usman's visit would lead to regular meetings and constant consultation between the two agencies.
He said the Nigeria Customs Service would "do everything possible" in promoting the trade facilitation programme of government through collaboration with sister agencies and through robust initiatives to promote business at ports.
Ali also promised to collaborate with NPA to rejuvenate port operation and port security committees and ensure that the committees' meetings are attended by senior Customs officers.
Culled from: http://shipsandports.com.ng/npa-customs-move-to-create-single-window-at-seaport/
Rising youth unemployment puts Nigeria on ‘time bomb’
January 26th, 2017
Nigeria's rising youth unemployment is now a major source of worry with the World Economic Forum (WEF) and the Lagos Business School saying the country sits on a ‘time bomb.'
Government says the situation is under control and efforts to curb joblessness will pay off in 2017. The country's unemployment rate rose from 13.3 per cent in the second quarter of 2016 to 13.9 per cent in third quarter, according to the National Bureau of Statistics' Unemployment/Under-employment Report released in October last year.
The rising rate of unemployment will enlarge existing risk of insecurity and militancy in major parts of the country and undermine government's efforts at fighting insurgency in the Northeast, uprisings in the Southeast and other serious crimes in parts of the country. Past President of the Nigeria Employers Consultative Association (NECA), Mazi Sam Ohuabunwa, in agreeing with the WEF/LBS' report, said Nigeria is experiencing insecurity largely due to joblessness and perceived marginalization. He added that unemployment rate has been rising consistently since 2014.
The Nigeria Economic Transformation Map co-curated with the Lagos Business School (LBS), as written by Dr Franklin Ngwu, Ndidi-Edozien and Olayinka David-West - all of the LBS - insists that the high rate of unemployment "can be attributed to many factors such as high dependence on oil revenue and limited diversification of the economy." It called for urgent action by government.
"The impact of unemployment is already evident, as we look at general levels of militancy in the South South, the problems with the Boko Haram and even some of the eruptions in other parts of the country, especially the IPOB and the MASSOB," says Ohuabunwa who still sits in the NECA council. He argues that the country's misery index has reached 50 per cent, meaning that more than half of Nigeria's more than 180 million people "are miserable." The Misery Index is a measure of unemployment in line with inflation rate - the average rate of increase in prices of good and services. Ohuabunwa explains that gross unemployment rate when factored with under-employment rate in the third quarter of last year for example, puts the unemployment rate at 50 per cent. "We are the third highest country with misery index, only behind Venezuela and Iraq. Recession has worsened our condition. Therefore, social stability and job creation should be at the core of our economic policy."
But there is always the good side. Abiola Rasaq, an investment analyst with the UBA Capital, sees the challenge posed by youth unemployment differently. "It can either be positive or negative for the country," he submits. "The rising youth unemployment reinforces the fact that Nigeria can become a manufacturing giant given the repository of labour force," says Rasaq as he cites the productive activities of the Asian Tigers - China, Taiwan, Singapore and Malaysia, among others - with relatively cheap labour. "If we can harness and drive productivity, then it will be a win-win."
Rasaq agrees that failure to harness "this rich human capital resource can create social menace for us. There is potential that unemployed youths can become a social force for civil unrest; we need to ensure that we make our youths productive," said Rasaq who cited the Tony Elumelu Foundation and the Dangote Foundation as exemplary initiatives driving entrepreneurship and job creation.
The Federal Government yesterday responded to The Guardian enquiry on the WEF/LBS report as Festus Akanbi, the media aide to the Minister of Finance, Kemi Adeosun, said "government already has a lot of programmes to address unemployment this year."
Senior Special Assistant on Media and Publicity in the office of the Vice President, Mr. Laolu Akande, also said government's N-Power programme is already targeting unemployed graduates.
"Half a million people are being targeted but we have done 200,000. It is just for unemployed graduates. And we have already reached another 100,000 non-graduates as micro credit is being made available to young people who want to develop their businesses."
Akande explained that the scheme is not limited to youths but they could get as much as N100, 000 business grant as part of government's Social Investment Scheme. He also hinted of plans to create technology hubs in eight strategic centres across the country - one each in Lagos and Abuja, and the rest in the six geopolitical zones of the country.
The number of unemployed in the labour force, the NBS said, increased by 555,311 persons just as the underemployment rate rose from 19.3 per cent in second quarter to 19.7 in the third quarter.
Nigerians aged 15 to 64, who during the reference period were available and actively seeking work but were without work were categorised ‘unemployed,' while underemployment occurs when a person works less than 40 hours, but works at least 20 hours a week. The NBS also explained that underemployment could occur when a person works full time but is engaged in an activity that underutilises his skills, time and educational qualifications.
According to Ngwu, a co-curator of the Nigeria Economic Transformation Map, "Nigeria is constrained by many challenges such as limited infrastructure development, youth unemployment, insecurity, human capital development and issues of good governance.
The report stressed that addressing the "youth unemployment is not only important, but also most urgent given the link between unemployment and other social problems such as terrorism, kidnapping, armed robbery, which are unfortunately becoming more common in Nigeria."
Joe Ajero, who leads one of the factions of the Nigeria Labour Congress (NLC), yesterday told The Guardian that the unemployment situation was a national emergency. "No one needs to tell us that this is a problem that will explode any moment from now, especially as those who are leaving school are not getting jobs," he said. "Those who are working are not being paid salaries and those who had worked and are retired are not being paid their pensions." Ajero called for urgent action to avert what he said could lead to civil unrest.
Culled from: http://guardian.ng/news/rising-youth-unemployment-puts-nigeria-on-time-bomb/
NIWA to concession four river ports
January 25th, 2017
The National Inland Waterways Authority (NIWA) is inching closer to the final concessioning of the Onitsha, Lokoja, Baro and Oguta River ports.
The Managing Director, NIWA, Boss Mustapha recently confirmed the receipt of certificate of compliance from the Infrastructure Concession Regulation Commission (ICRC) to go ahead with the concessioning process.
The concessioning will allow for private sector management and trigger improved utilisation of the inland waterways for transportation and easy conveyance of goods.
Mustapha, who was on a tour of the area offices under his jurisdiction, said the tour would expose the operations at various points in order to take the necessary action.
At the Onitsha River Port, he was impressed with the state of the cargo handling equipment and other facilities. He therefore promised to accelerate the process of completion of the concession of the port.
However, he frowned at the slow pace of work at the Oguta River Port site and promised to get the National Assembly and Imo State government to support the process of completing the port.
Mustapha was also delighted with the asset of NIWA at Warri Dockyard, which he said is enough to sustain the authority financially if properly managed.
He noted that the issue of inadequate manpower and obsolete equipment at the port would be addressed, adding that some operations at the Dockyard may be leased to the private sector.
The NIWA boss also visited two jetties in Yenegoa, Bayelsa State, and promised the people of the state that the two jetties would be put into use very soon.
Culled from: https://guardian.ng/business-services/maritime/niwa-to-concession-four-river-ports/
Naira drops to 498 as CBN resumes dollar
January 20th, 2017
The naira fell against the United States dollar at the parallel market to 498 on Thursday, from 497 on Wednesday. This came hours after the Central Bank of Nigeria resumed dollar sales to Bureau De Change operators through Travelex. Before dropping to 498, the naira had appreciated to 495/dollar early on Thursday. The currency traded flat at 497/dollar consecutively between Monday and Wednesday. Economic and financial experts said the resumption of dollar sales to the BDCs by the CBN through Travelex would help boost the naira. The local currency has been under persistent pressure owing to scarcity of dollar in the economy. Economic and financial experts are divided over the outlook of the naira and most economists believe the local currency would continue to fall against the greenback unless the CBN reviewed its monetary and foreign exchange policy. According to an economic expert, Mr. Henry Boyo, the currency monetary policy framework adopted by the CBN is flawed and there is an urgent need for the central bank to jettison it for a framework that can take the country off the current economic challenges. He stressed that unless this was done, the rising oil prices would not make the economy better. Boyo said, “The oil revenue is not the problem; the primary cause of the oppressive dilemma is the distortional process the CBN adopts for infusing the dollar revenue into the domestic money market to drive economic growth. “President Muhammadu Buhari must be disturbed that the naira exchange rate has suffered so poorly under his watch, particularly after he promised parity between the naira and dollar, if he won the election. He added, “Unfortunately, the worst has yet to come, because, if crude oil price further rises while output remains favourable, the dollar will paradoxically spike well above N500/$1 and may approach N1000/$1 before December 2017! “Any attempt to bridge the widening gap between official and parallel market exchange rates will devalue the naira and trigger a steep rise in fuel price to shoot inflation well beyond 20 per cent and make Nigerians poorer still.” “We will continue to see reasonable volatility of the naira during the first half of this year. The fundamental issues underlying the volatility of the naira have not been addressed,” a currency analyst at Ecobank Nigeria, Mr. Kunle Ezun, said. According to Ezun, the naira will continue to depreciate at the parallel market while the CBN will keep managing the official rate around 305/dollar. “It will depreciate further but there has been some resistance around 500/dollar. The CBN seems to have come to the end of monetary policy because it is the issue of liquidity,” the Ecobank analyst added.
Culled from: http://punchng.com/naira-drops-498-cbn-resumes-dollar-sales/
Reduced importation: Terminal operators jostle for general cargoes
January 19th, 2017
There is currently fierce competition among terminal operators for general cargoes amidst a lull in vehicle importation, investigation by our correspondent has revealed.
On a visit to the Tin Can Island Port on Wednesday, our correspondent observed that the lack of activities that was a common feature at the port in 2016 had not improved this year despite the Federal Government's latest efforts to direct traffic to the nation's ports by imposing a ban on vehicle importation through the land borders.
It was gathered that because they were not taking delivery of vehicles through the ports, the terminal operators had turned to general cargoes to survive and remain in business.
Contrary to the situation two years ago when the ports were congested and there was no space to discharge cargoes, the terminals are currently empty.
Also, there has been a drop in the level of general cargoes coming into the country, increasing competition among the terminal operators for the discharge of the few available cargoes.
In the wake of the recession that struck the economy last year and the dwindling fortunes of the country, the terminal operators were said to have lost over 75 per cent of their earnings as Nigerians cut down on importation of foreign goods because of the high naira to dollar exchange rate.
According to the operators, the situation has been made worse by the hike in tariff on imported vehicles, which was imposed by the administration of former President Goodluck Jonathan as part of the Automotive Policy to encourage local production of vehicles.
The Managing Director, PTML Nigeria, Mr. Ascanio Russo, told our correspondent that the hike in tariff led to a drop in the volume of vehicles discharged at the firm's terminal from over 17,000 to 5,000 a month, adding that the company was forced to cut its staff strength due to low volume of business.
According to him, there has been no improvement in the volume of vehicles coming into the ports following the ban on their importation through the land borders.
He suggested that the high tariff was likely to continue keeping importers away from the ports, while increasing smuggling.
In a related development, Russo has declared that the current charges at the PTML are the lowest in the last 10 years ago.
He said this in response to complaints of arbitrary charges at the ports by freight forwarders.
Russo said the current terminal fees did not take into account the inflation figure in the country, which had increased to over 18 per cent.
He said, "If one were to use inflation as reference, one would see that the level of charges of terminal operators is much lower than it used to be when we started this concession 10 years ago.
"It is easy to calculate judging from the fact that prices of everything in Nigeria have gone up. When one compares the current prices of items, they are higher than they were 10 years ago. In actual fact, we are collecting much less than we were collecting 10 years ago because we have not increased our prices in line with inflation or any other goods in this country."
He added, "Let us also not forget that terminal operators are suffering because of the general slowdown of the economy. We are not even able to recover the original price we paid and that is why some terminal operators are asking to be allowed to pay their concession fees in naira. They cannot even access dollars anymore.
"Our charges have gone down, compared to terminal services, which have seen a lot of improvement. I remember when I came here 12 years ago; to take a container out of the port, it would take 30 days to 35 days. Now, 50 per cent of the containers are going out within three to four days and the average time a container spends in our terminal is nine days."
Culled from: http://punchng.com/reduced-importation-terminal-operators-jostle-general-cargoes/
FG’s plan to secure foreign loans stalls
January 18th, 2017
The Federal Government's efforts to secure funds from international lenders to help haul the country out of recession have stalled because it has not submitted the required economic reform plans, according to one of the banks and sources close to the matter.
The Federal Government has been in loan talks with the World Bank for a year. It had told the lender it would present its proposed reforms to make the economy more resilient and attractive to investment by the end of December, according to Western diplomats and a Nigerian official who declined to be named as they are not authorised to speak publicly, Reuters reported.
But this has not happened and as a result of the delay, which the government has not explained, the Washington-based bank has not been able to consider a loan yet, according to the sources.
The Minister of Finance, Mrs. Kemi Adeosun, and the World Bank declined to comment, Reuters reported.
The Director of Press, Ministry of Finance, Mr. Salis Nai-nna, said he could not comment immediately on the matter when our correspondent contacted him on Tuesday night.
He asked our correspondent to put the questions into writing and that comments would be available today (Wednesday).
The Director-General, Debt Management Office, Dr. Abraham Nwankwo, did not pick calls or respond to a text message sent to his mobile telephone line.
Similarly, the President, African Development Bank, Dr. Akinwumi Adesina, told Reuters on the sidelines of the World Economic Forum in Davos, Switzerland on Tuesday that the AfDB was holding back the second tranche of $1bn loan for Nigeria because the country had yet to submit its economic recovery plan to the lender.
"We are waiting for the economic policy recovery programme and the policy framework for that," Adesina said, without specifying when the AfDB had expected to receive the reform plans.
The Federal Government is seeking to borrow $4bn in total from the World Bank and other foreign institutions, and $1bn through Eurobonds to plug a yawning budget deficit and fund badly needed infrastructure projects.
The country, which relies on oil revenue for most of its income, has been hit hard by the sharp fall in crude prices since 2014 and is struggling to drag itself out of its first recession in 25 years.
It is unclear why the government has not submitted reform plans to the international lenders.
The funding deadlock could throw into doubt badly needed infrastructure projects planned for this year, including new roads and improvements to power infrastructure.
The failure to secure the funds, and to present a reform programme, could also deter some investors from Nigeria's planned $1bn Eurobonds sale in March.
A financial source said the government was working with a consultancy firm on putting together a package of proposed reforms.
The source, who declined to be named as the matter is confidential, did not elaborate.
The Federal Government needs money to help plug a budget deficit of N2.2tn ($7bn) for 2016 and to help fund a record budget of N7.3tn for 2017, which is aimed at stimulating the economy.
It has been holding talks with various institutions and China over the last year to borrow funds but apart from a $1bn loan from the AfDB, at a rate of 1.2 per cent, nothing has been made public.
The AfDB paid out an initial $600m in November but is awaiting the economic reform proposals before it disburses the rest of the money.
It is unclear how much money Nigeria is seeking from the World Bank, or whether the lender was pushing for any specific economic reforms from the government.
The diplomatic sources, however, said the bank wanted to see how Nigeria planned to lower its dependence on oil revenues and boost investment, which has been hit by a high official exchange rate for the naira currency.
The Central Bank of Nigeria, backed by President Muhammadu Buhari, has kept the naira rate to the dollar at 40 per cent above the unofficial or parallel market rate, which has dried up dollar supplies on official channels.
The policy has also made investors reluctant to commit to new projects as they expect the central bank will have to devalue the naira eventually as oil production has been hit by an insurgency in the Niger Delta oil hub.
The central bank has also imposed hard currency curbs, making impossible the import of almost 700 goods, which has forced dozens of plants to close running out of spare parts.
Adesina told Reuters on Tuesday that the currency rate problem needed to be addressed by the government in its reform programme, which he said the AfDB was coordinating with the World Bank.
"We are being clear that the quantitative restriction in terms of access to FX is what's creating huge gap between parallel market rates and official rates," he added.
Culled from: http://punchng.com/fgs-plan-secure-foreign-loans-stalls/
Government moves to tackle corruption at Nigerian ports
January 18th, 2017
Plans are in the pipeline by the Federal Government to deploy its anti-corruption mechanisms to significantly reduce the menace of fraudulent and criminal activities at the Nigerian ports.
This comes as the Nigerian Ports Authority (NPA), is currently studying the various tariffs across ports in West Africa, with a view to determining how competitive Nigerian ports are compared to its neighbours.
An October 2016 report identified corruption, which is closely linked to the inefficiencies at the ports, as costing Nigeria the loss of about N1trillion annually.
These corruptive tendencies also contribute in making the Nigerian ports among the most expensive in the world due to the legion of charges ports users are being subjected daily.
If these multi-challenges are resolved, experts believe Nigeria will be on the path to becoming the maritime hub in West Africa, as being clamoured for.
Already, the Managing Director, Nigerian Ports Authority (NPA), Hadiza Bala Usman, has confirmed that the Presidential Advisory Committee on Anti-Corruption will soon open an office in the NPA in line with a report submitted by the Independent Corrupt Practices Commission (ICPC) on the corruption index in ports administration.
Usman, who is also a member of the Presidential Advisory Committee on Anti-Corruption, affirmed that the Authority will embark on strong anti-corruption measures in 2017.
The move will further sanitise the sector and enhance smooth operations and clearance of cargo at the ports. Many illegal payments that contribute to making Nigerian ports charges non-competitive in West African region would be eradicated and enhance the ease of doing business at the ports.
The NPA boss, who visited major customs agents and freight forwarders last weekend, also assured that the Authority will interact more with stakeholders in 2017, in order to keep abreast with happenings at the various ports.
To this end, she said the NPA would introduce quarterly stakeholders meetings to know what is on ground at the ports, and be better informed on the plight of operators.
Usman also acknowledged the need to block revenue leakages to make the ports more competitive in the area of appropriate pricing.
To this end, she said there was the need for government to look into corruption at the ports and how to plug the leakages.
She further said the NPA is currently studying the tariff structures across ports in West and Central Africa, with a view to determining how competitive Nigerian ports are compared to its peers in these regions.
Usman promised that in the event that Nigerian ports turn out to be more expensive, the agency will advise the Federal Government to reduce charges to enable more cargoes come into the nation's ports.
The National President of ANLCA, Prince Olayiwola Shittu charged the NPA MD to address some of the problems at the ports, which he itemised to include: corruption, bad roads, and high port charges at the port leading to un-competitiveness of Nigerian ports, compared to neighbouring West African ports.
"We want to appeal to you to use your God-given approach to battle corruption at the ports," he said.
Meanwhile, the British High Commission and the NPArecently resolved to work together to improve port development in Nigeria.
The British High Commissioner to Nigeria, Paul Arkwright, who was at NPA headquarters last Friday, promised to assist the authority to address the challenges facing Nigerian port industry.
Usman also pledged stronger relationship with United Kingdom's companies operating in the Nigerian maritime sector, adding that NPA would welcome any assistance that would boost port efficiency from Britain, to fast track the ports development.
Arkwright, who identified piracy as one of the major challenges in the country's maritime industry said that Britain would make significant contribution to enhance operational efficiency in the port.
He stressed the need to support NPA towards finding a lasting solution to the issue of piracy in the country's waters.
Culled from: http://guardian.ng/business-services/government-moves-to-tackle-corruption-at-nigerian-ports/
Kidnappings at sea hit 10-year high in 2016
January 11th, 2017
Kidnappings at sea hit a 10-year high in 2016 despite piracy attacks as a whole falling to their lowest level since 1998, according to the International Maritime Bureau (IMB).
Last year saw a tripling in the number of seafarers kidnapped for ransom by pirates with a surge in such attacks in the Sulu Sea between East Malaysia and the Southern Philippines.
According to the IMB, pirates kidnapped 62 seafarers in 2016 in 15 separate incidents. West Africa remained a hotspot for kidnappings with 34 of the 62 kidnappings taking place in the Gulf of Guinea, but it is the sharp rise in such attacks off Malaysia and Philippines that has drawn particular concern.
There were12 crew members kidnapped from three vessels in the Sulu Sea in the last quarter of the year.
"The kidnappings in the Sulu Seas between eastern Malaysia and the Philippines are a particular concern," said Potengal Mukudan, director of the IMB's Piracy Reporting Centre.
IMB said it advises charterers and owners to consider avoiding the Sulu Sea by routing vessels West of Kalimantan. Mukundan said shipowners should avoid high risk area.
"Shipmasters should follow the latest best management practices and where possible take early action to avoid being boarded. They should inform the IMB PRC or regional counter piracy centres for help and advice," he said.
There was also an increased use of guns in attacks with 48 reports of the use of guns in 2016 compared to 33 in the previous year.
Overall though the number of piracy attacks globally dropped to an 18 year low with 191 attacks compared to 246 in 2015.
"The continued fall in piracy is good news, but certain shipping routes remain dangerous, and the escalation of crew kidnapping is a worrying trend in some emerging areas," commented Mukundan.
Culled from: http://shipsandports.com.ng/kidnappings-at-sea-hit-10-year-high-in-2016/
How CBN foreign exchange policy crippled manufacturing firms in 2016
January 11th, 2017
Nigeria's manufacturing sector performed dismally in 2016 as manufacturers faced several challenges which affected them negatively.
The Central Bank of Nigeria (CBN) said the industrial sector recorded a general decline between January and November as indicated by the Purchasing Managers Index (PMI).
The PMI is an indicator of the economic health of the manufacturing sector.
The index stood below 50 index point in the months of January to November which indicated decline in industrial production.
The PMI is based on five major indicators - new orders, inventory levels, production, supplier deliveries and the employment environment.
Operators said that the sector was faced with myriads of challenges ranging from scarcity of foreign exchange, infrastructure deficit, high banking charges and lack of raw materials.
About 272 firms were shut, while some reduced their production, staff strength and remuneration of workers.
Frank Jacob, the President, Manufacturers Association of Nigeria (MAN), said that industrial capacity utilisation hovered around 20 per cent during the year.
"More than half of the surviving firms are classified as ailing which posed serious threat to the survival of the manufacturing sector.
"The business environment was plagued by epileptic power supply, bad roads, high interest rate and high cost of energy which contributed to high cost of production and impediment to competitiveness of the sector," Jacob said.
A major challenge was the acute scarcity of foreign exchange which restricted the ability of manufacturers to import raw materials for production.
The apex bank had earlier maintained an official exchange rate with the bound of N197 to N199/USD from February 2015 to June 2016.
To address the problem of foreign exchange scarcity, the CBN introduced a new foreign exchange system and some monetary controls in June 2016.
Under the new flexible exchange rate system, the naira exchange rate to the dollar depreciated to the average of N320 in the official market and N485 in the parallel market during the year.
The CBN also banned 41 raw materials from getting foreign exchange for importation at the official segment of the foreign exchange market.
MAN, however, said that the new foreign exchange system worsened the plight of manufacturers as it led to a cumulative loss of N500 billion for manufacturers in 2016.
Babatunde Odunayo, the Chairman, Apapa Branch of MAN, said that some Letters of Credit and Form Ms, approved to manufacturers at N197/US$ before the introduction of the flexible exchange system, were redeemed at N320.
He said this meant a huge loss to manufacturers as the related goods had mostly been sold before the commencement of the new exchange rate system.
Odunayo said that the exchange rate loss of N500 billion reflected in their accounts and led to factory closures, unemployment and loss of investments.
According to him, the exchange rate losses required additional working capital to shore up cash differences of between N320 and N197.
To further address the foreign exchange crisis, the CBN, on August 22, directed banks to allocate 60 per cent of their foreign exchange sales to manufacturers for procurement of raw materials, plants and machineries.
In spite of this directive, the problem of foreign exchange scarcity persisted.
Hamma Kwajaffa, the Director-General, Nigerian Textile Manufacturers Association (NTMA), said that the textile industry nearly went into extinction due to inability to access foreign exchange for critical raw materials.
Kwajaffa said that no textile manufacturer had accessed foreign exchange inspite the $660 million earmarked for manufacturers at the official interbank market.
Nnamdi Okafor, the Managing Director, May and Baker, said the inability of manufacturers to access foreign exchange through the interbank affected industrial production and contributed to inflation.
"It has been a herculean task running any business in Nigeria, especially import-dependent manufacturing business.
"I can confirm to you that as a company, we have not been able to access official forex allocation in the past six months.
"In fact, some of the letters of credit we opened as far back as the fourth quarter of 2015 have not been funded by the banks.
"Consequently, we incurred huge exchange rate losses in 2016 and these will likely impact on bottom-line at the end of the year," Okafor said.
Erisco Foods Limited, an indigenous tomato paste manufacturer, relocated its 150 million dollars tomato paste processing plant to China due to the same problem.
Erisco Foods had a production capacity of 450,000 metric tons of tomato paste annually and had 22 brands with over 2,000 workers in Nigeria.
Eric Umeofia, the Chief Executive Officer, Erisco Foods, said that the company relocated to friendlier business environment since it lost over N3.5 billion in Nigeria.
Muda Yusuf, the Director-General, Lagos Chamber of Commerce and Industry (LCCI), said the inability of manufacturers to access foreign exchange at the interbank market impeded growth in the real sector.
He urged the Federal Government to ensure more liquidity in the foreign exchange market to restore investors' confidence in the economy.
Industry experts also urged the CBN to review its policy on the 41 items restricted from the official foreign exchange market as it had stifled production and forced many firms out of business.
They urged the apex bank to redirect its policies towards stimulating the economy rather than tightening money supply.
They said that monetary and fiscal policies should be coordinated for economic revival and growth.
The experts also called for review of some monetary and fiscal policies that have hindered the growth of the manufacturing sector.
Culled from: http://shipsandports.com.ng/cbn-foreign-exchange-policy-crippled-manufacturing-firms-2016/
FG slashes import duties for 115 items
January 5th, 2017
The Federal Government, in a bid to promote development in critical sectors of the economy, has approved a reduction in the import duties of 115 items in various sectors of the economy.
The approval was given by President Muhammadu Buhari as part of the fiscal policy measures of the Federal Government for the country.
The Minister of Finance, Mrs. Kemi Adeosun, while communicating the approval through a circular obtained by our correspondent in Abuja on Wednesday, said the move was in line with the provisions of the Economic Community of West African States' Common External Tariff.
The ECOWAS CET, which will cover the 2017 to 2019 fiscal periods, is composed of three categories made up of an Import Adjustment Tax list of 173 tariff lines, a national list consisting of 91 items and an import prohibition list, which is applicable to certain goods originating from non-ECOWAS member states.
It read in part, "This is to confirm that His Excellency, Mr. President, has approved the 2016 fiscal policy measures made up of the supplementary protection measures for implementation together with the ECOWAS CET 2015-2019 with effect from 17th of October, 2016.
Consequently, all transactions prior to the effective date of this circular shall be subjected to the tariff rates applicable before the coming into effect of this 2016 fiscal policy measures.
An analysis of the import adjustment tax list, which contains 173 items, shows that the Federal Government has given approval for the reduction of 26 of them, while it left the tariffs on 144 items unchanged.
However, the tariffs on three items contained in the import adjustment tax list were reviewed upwards.
For the national list consisting of 91 products, the circular stipulated that a downward review was approved for 89 items in order to encourage development in the real sector of the economy.
The items in the national list whose import duties were reduced from 10 per cent to five per cent are milk and cream; tea; fats of sheep or goat; malt extract; tomatoes prepared or preserved by vinegar; under natured ethyl alcohol for medical, pharmaceutical or scientific purpose; petroleum oils and oils obtained from bitumen minerals other than crude.
Others are hypochlorites; synthetic organic colouring matter; grease for treatment of textile materials; prepared glues and adhesives; activated carbon; picking preparations for metal surfaces; organic composite solvents and thinners; mixes alkylbenzenes; and industrial monocarboxylic fatty acids.
In the same vein, the government also approved a reduction from 10 per cent to five per cent for tubes, pipes, hoses, sheets, foil, tape, polyethylene, paper and paper board, yarn, synthetic staple fibres, semi-finished products of iron or non-alloy steel, stranded wire ropes, and completely knocked down or unassembled for the assembly industry.
For items such as automatic circuit breakers, switches, lamp-holders, electrical apparatus for switching or protecting electrical circuits, the Federal Government gave an approval for the reduction of their import duties from 20 per cent to 10 per cent.
For machineries and equipment used in sectors such as agriculture, cement, hospitality, power, iron and steel, solid minerals, textile and aviation, the government, according to the circular, approved a zero import duty.
Before the approval, the import duties for machineries and equipment used in these sector were put at five per cent.
Some of them are refined vegetable oil, cocoa butter, spaghetti/noodles, fruit juice in retail packs, bagged cement, soaps and detergent, mosquito repellent coils, corrugated paper and paper boards, telephone recharge cards and vouchers, carpets and rugs, all types of footwear, bags and suitcases, and used motor vehicles above 15 years from year of manufacture.
The government also banned the importation of live or dead birds, waters, liquid dietary supplements and medicament such as paracetamol tablets and syrup, chloroquine tablets and syrup, among others.
Culled from: http://punchng.com/fg-slashes-import-duties-115-items/
Attached is the circular from the Federal ministry of Finance amending the Import Adjustment Tax/duties on some items. To view, please use this link: Revised Duty Tariff
Nigeria to spend N9.9trn on importation in 2017
January 3rd, 2017
Nigerians are expected to spend as much as N9.9 trillion in 2017 to import various items into the country.
This information was contained in a data obtained from the Central Bank of Nigeria (CBN). The apex bank data also revealed that the country spends about N3.4tn annually on importation of four food items including rice, wheat, fish, and sugar.
The document also projects that the country would begin to see a significant reduction in the level of importation from N9.9 trillion in 2017 to N9.34 trillion and N8.79 trillion in the 2018 and 2019 fiscal periods, respectively.
The Acting Director, Trade and Exchange Department, CBN, Woritka Gotring, said the huge preference for imported items especially rice, wheat, fish and sugar by many Nigerians if left unchecked could worsen the economic recession currently facing the country.
Gotring stated this while responding to questions after speaking recently at a forum on the challenges of foreign exchange management in Nigeria under economic recession.
He said the depletion of the country's external reserves was largely caused by the huge demand for foreign exchange, adding that this was a major reason a lot of actions were taken in that direction by the apex bank in recent times.
Gotring said while the economy was going through tough times owing to the decline in foreign exchange inflows, the problem could be better managed with patronage of made in Nigeria products.
He said, "Foreign exchange rate is one of the most important means through which a country's relative level of economic health is determined.
"The slump in global oil prices has hit Nigeria hard, plunging the country into recession. It is evident that the economy is going through tough times with declining inflows and continuous demand pressure for foreign exchange arising from high import bill."
He said that it was the resilience of the informal sector that had been reducing the impact of the economic crisis on Nigerians.
He said if not for the resilience shown by the informal sector where a lot of people were engaged in various economic activities, it would have been difficult to manage the economic crisis.
He said despite the fact that a lot of people in the informal sector were employed in one form of economic activity or the other; the infrastructure gap in the country was limiting the potential of the sector.
In order to enable the country to conserve its foreign exchange, he called for policy consistency that would encourage capital flow and promote local production, fiscal discipline, enhancement of local manufacturing capacity and import substitution.
Gotring also called for increased investment in agriculture, mining and solid minerals, and infrastructure in order to lower the cost of doing business.
Culled from: http://shipsandports.com.ng/nigeria-spend-n9-9trn-importation-2017/
NEPZA issues license to Maritime Africa Economic City
January 3rd, 2017
The Nigeria Export Processing Zones Authority (NEPZA) has granted license to Nigeria's largest and most ambitious Free Trade Zone and Mega Port project - the Maritime Africa Economic City otherwise known as the Badagry Free Zone.
The license was handed over to the Project Director of the Zone, Mr. Patrick Bird by the Managing Director of NEPZA, Mr. Gbenga Kuye in Abuja on Thursday.
"Today marks a tremendous milestone in the development of the Badagry project. With NEPZA, we intend to develop Maritime Africa Economic City into one of the most successful special economic zones in all of Africa," Mr. Bird said shortly after receiving the NEPZA license.
"The benefits of having this approval are enormous for our clients and despite the current downturn in the economy, we are still fielding a lot of interests from domestic and foreign companies wanting to set up in Badagry.
"We thank NEPZA for their continued support. This is going to be a great partnership to the benefit of Nigeria," he said.
Mr. Bird said some of the benefits of the new Free Trade Zone include various tax advantages, 100% repatriation of profits and dividends, immigration incentives, round the clock operations, and fast track cargo clearance procedures.
The Maritime Africa Economic City will be developed on 1,100 hectares of land with over 6 kilometres of quay wall, including a container terminal, roll-on-roll-off (RORO) terminal, general cargo terminals, oil service centre and refined products import terminals.
It will also include a power plant, oil refinery, industrial park, warehousing and inland container depot functions as well.
The Zone is connected to Lagos by the Lagos-Badagry Expressway, which is currently being upgraded and expanded by the Lagos State Government as well as the Porto Novo Creek, allowing for the barging of cargo between the existing port system of Lagos and the new facility.
A rail line will also be developed in the future to connect the new Free Trade Zone for even more seamless transit of goods.
In October, Lagos State Governor, Mr. Akinwunmi Ambode said the Badagry Free Zone and Mega Port project would be a major turning point that would go a long way to bring about global growth to Nigerian waters and by extension the nation's economy.
The Governor said the project would also complement the emergence of Lagos as the fifth largest economy in Africa.
The Governor, while lauding the investors for staying the course with the project, which is expected to generate hundreds of thousands of direct and indirect jobs upon completion, pledged his government's commitment to ensuring the interests of the host communities alongside a sustainable regeneration and urban renewal of the area.
The Federal Government approved the construction of the proposed Mega Port and Free Zone at the Federal Executive Council meeting of August 3, 2016.
Also, speaking in support of the project, Minister of Transportation, Mr. Rotimi Amaechi said the project will boost Foreign Direct Investment in the country.
The Minister of Information, Alhaji Lai Mohammed said the approval shows that Nigeria is still a preferred investment destination in Africa despite the challenges it is currently facing.
Also speaking on the project, Minister of Power, Works and Housing, Mr. Babatunde Fashola, while thanking President Muhammadu Buhari for granting the approval, said, "There are bigger vessels now being built across the world that require larger depths and drafts to berth. Now some of our competitors on the continent like Djibouti are building bigger ports, so if we don't build this port we risk becoming uncompetitive and we risk a threat to our maritime hub status in the sense that we may become a transshipment port instead of a port of original destination."
The Maritime Africa Economic City is being developed by a consortium of top local and international companies.
Culled from: http://shipsandports.com.ng/nepza-issues-license-to-maritime-africa-economic-city/
2016, the worst year for port operations
December 28th, 2016
With only a few days into 2017, maritime operators including seaport operators, clearing agents and all stakeholders are unanimous in their assessment that the outgoing year has been the most challenging and one that will linger in their mind for a long time to come.
They attributed these challenges to many of what they described as Federal Government's unfavourable policies, a development that saw the seaports, which used to contribute a large chunk of Nigeria's non-oil revenue becoming less active.
This left government almost financially stranded, with less capacity to invest in infrastructure, create more jobs, address security, including fighting insurgency, and funding other activities that define good governance.
Recent statistics from Nigerian Ports Authority (NPA), which governs and operates the nation's ports showed that container traffic inward Nigerian ports (import) dropped to 6,831,348 tonnage as at September 2016, from 9,419,672 in 2015. Besides, the outward container (export) also dropped drastically from 2,263,594 tonnage in 2015 to 1,485,338 in September 2016.
Also, the number of vessels dropped to 11year lows and stood at 3,347 against 5,014 in 2015 and 5,333 in 2014.
The Guardian gathered that importation of raw materials has also dropped significantly, as importers argued that lack of access to foreign exchange and low patronage was killing their business.
Many of the terminal operators are groaning under poor handling of goods, while many of them are finding it difficult to meet their payment obligations to the Federal Government.
As such, opinions are varied regarding the effect of government's policy pronouncements during this fiscal year, while hoping that 2017 will turn out to be much more fruitful, as captured below:
Reduce tariffs to bolster ports activities, urges STOAN
The Spokesperson for Seaport Terminal Operators Association of Nigeria (STOAN), Bolaji Akinola, while declaring that Year 2016 has been a very difficult year for port operations, told The Guardian that government needs to reduce tariffs to boost activities.
According to him, "The ports have dried up. Usually at this time of the year (December), it will be difficult to get into Apapa or come out of it. But go to Apapa now, the whole place is as free as ever. This is the peak season, yet there is no traffic. No cargo movement. Everywhere is dried up and the main reason like we have said severally is government's unfavourable policies."
Such unfavourable policy is also seen in the National Automotive Policy, which he said has wiped out vehicle cargo traffic at the ports completely and almost decimated the roll-on, roll-off, RORO terminals in the country.
Akinola said: "The hike in import duty of vehicles; hike in rice duty has take away the rice cargo traffic, that is why you have some terminals like ENL Terminal drying up overnight. It's a terminal that used to be very boisterous and very active, providing jobs for many people."
He argued that although the ban on importation of vehicles through the land borders will take effect from January 1, 2017, but it will not be effective, as it will lead to increase in smuggling.
He insisted, "The ban will not be effective without a corresponding slash in vehicles tariffs. I am not trying to scare anyone, but that is the truth of the matter. It will only lead to high rate of smuggling. The only way to check smuggling right now is to accompany that ban with a slash in tariff so that you bring it to the same level as what obtains in the ports of Cotonou and other countries in the sub-region. Otherwise smuggling will be heightened.
"I will give you a practical illustration. Look at rice, importation of rice through the land border has been banned, yet there is no scarcity of imported rice in Nigeria today. Those imported rice you see in the market did not come in through the ports. You can go to the ports and check; you will not see rice vessel there. So how do they come in? They are smuggled in. The same thing will happen to the vehicles, so that is why the only way out is to slash the tariff to 10 per cent that it was, so that it will be at par with other ports in the sub-region," he said.
For Akinola, the final nail on the coffin is the "ill-advised" Central Bank of Nigeria (CBN), the lender of last resort, restriction of 41 items from the official forex window.
As the New Year is ushered in, he urged the government to look into these policies and reverse them, especially the CBN's policy and the hike in tariff of imported vehicles.
Ports upgrade is a necessity
For Master Mariner, Captain Adamu Audu Biu, the upgrade of the nation's ports must take a centre stage in the coming year, saying that Nigeria must rise up and develop its ports facilities. He said this will enable the country to accommodate very large crude carriers (VLCCs) and ultra large crude carriers (ULCCs), which are the latest trend in the global market now, if its desire of becoming the maritime hub in West Africa would be realistic.
Biu said: "Our ports and their approaches were last upgraded in the late seventies and early eighties. One must commend the efforts of some of the terminal operators since the concessioning of the ports. The depth of water available in all our port approaches, jetties and berths need to be significantly improved. Same is the case with the structural integrity of our quay aprons," he said.
President of the Ship Owners Association of Nigeria (SOAN), Greg Ogbeifun, while agreeing that the industry did not do too well in the outgoing year, expressed the hope for better performance in 2017.
In a chart with The Guardian, he insisted that the industry recorded some achievements in 2016, without giving further details, noting that the stakeholders' forum organised by the Ministry of Transport, further brightened the hope for a better industry in 2017.
"I must say some salient challenges are still there. It's one thing to come with good policy it is another thing to be able to implement it. If you don't have more knowledgeable people in the right positions to implement the policies then you cannot achieve what you set out to achieve," he said.
He appreciated the minister's determination to resuscitate Nigerian flag flying ships to ply the nation's waters with the attendant benefits of job creation and training activities for cadet officers.
"In the area of regulation, there is a lot to be done. I don't think the regulatory agencies are doing much. The fundamental reason for that is that apart from the fact that people that are being appointed to certain positions don't seem to be knowledgeable enough, there hasn't been enough stakeholders' engagement," he said.
In 2017, the SOAN president said the government should review some of the extant laws and policies including taxes so as to increase the emergence of Nigerian fleets; while issues of human capacity development should be taken serious.
"We must look inward now to grow our ability to build maritime capacity, making use of the maritime institutions that we have in-country. We should stop going out looking for places in Malaysia, India or Philippines. Let us develop our own institutions to meet these standards and it can be done.
"The Maritime Academy, Oron, has a very strong and basic infrastructure that can be built upon, the software can be improved, employ the right calibre of teaching staff. Nigeria has no reason to be sending cadets out of this country to look for schools or ships, when we have thousands of them here in Nigeria.
"Also, Institute of Oceanography has many potential that has not been tapped, so, government should also look into that too.Government should listen to the ship owners, because we have a lot of ideas and we are doing the job.
NPA promises facelift for Apapa roads in 2017
The Managing Director, NPA, Hadiza Bala Usman has promised that the dilapidated port access roads will be fixed in the coming year, as the Federal Ministry of Power, Works and Housing, has incorporated some of the projects in the 2017 budget.
Expressing commitment to make the port access road motorable again, Usman said: "On the ports access road, we have given timelines and deadlines to the respective agencies. On the Wharf Road, we have concluded discussion with Sanford and Flour Mills on mechanism to fixing the road, taking into consideration the need for drainage. The final draft will be submitted to the Ministry of Power, Works and Housing in four weeks, whereby the Ministry will conclude on the framework in which the road will be built. The Ministry will communicate the details to the public when they are ready.
"We have also discussed extensively and gotten the Creek Road and two other roads within Apapa into the 2017 budget by the Ministry of Power, Works and Housing, and they will be constructed within that period."
Culled from: http://guardian.ng/business-services/2016-the-worst-year-for-port-operations/
External reserves fall by $4bn in one year
December 28th, 2016
Despite the staggering crash in the value of the naira against the United States dollar and other major foreign currencies in 2016, the Central Bank of Nigeria spent $4bn from the nation's external reserves to defend the local currency in 12 months, statistics obtained from the CBN website on Tuesday showed.
The data also revealed that the external reserves would likely be closing the year on the $25bn mark.
The external reserves stood at $25.361bn on December 22, 2016, the latest data from the CBN showed.
On December 22, 2015, the reserves stood $29.341bn. This means that the external reserves have fallen by $4bn in 12 months. It also means that the CBN has depleted reserves by 14 per cent of its value as at the end of last year to defend the naira.
On December 31, 2015, the last day of the year, the external reserves recorded $29.069bn.
The controversial defence of the naira by the CBN has come under severe criticism by economists, who believe that the forces of demand and supply should be allowed to determine the exchange rate of the naira, at least to a considerable level.
The foreign exchange reserves rose to about four-month high of $25.361bn on December 22, the CBN latest data showed.
In less than one week, the reserves rose by almost $300m from $25.084bn recorded on December 16, 2016 to $25.361 on December 22, 2016.
However, currency and economic experts are not sure if the marginal increases in the external reserves' level are sustainable amid a falling naira and acute shortage of dollar in the foreign exchange markets and the economy.
"We are not sure the extent this can go. Currently, the FX market is not a free-float one where the interplay of demand and supply determines price and volume. The uptick is not as a result of supply over demand. It happens when there is a slowdown in the allocation of the FX," the Chief Executive Officer, Cowry Asset Management Limited, Mr. Johnson Chukwu, said.
A senior associate in investment banking at Afrinvest, a research and investment firm, Mr. Ayodeji Ebo, said the gradual increase might only be sustainable if the oil price maintained its current level and there was a continuous ramp up in oil production.
The nation's fast-depleting reserves recorded $23.89bn low on October 19, 2016.
As a result, the reserves dropped by 15.9 per cent from last year when they closed at the $29bn mark.
At the end of November, 2016, the reserves stood at $24.77bn, up from $23.95bn on October 31.
The foreign exchange reserves declined to $24.92bn on September 14 from $25.11bn on September 9.
The reserves had fallen from $26bn on August 4, 2016 to $25.97bn on August 5 as the central bank stepped up dollar sales to boost liquidity at the interbank market and support the ailing naira.
The naira, which touched an all-time low of 365.25 per dollar on August 18 at the official market, has consistently closed around 305.5 in recent weeks.
The CBN had on June 20 lifted its 16-month-old naira peg, following overwhelming dollar demand from companies and calls for a free floating of the naira by industry experts.
Experts argued that the central bank had yet to fully allow the naira to float freely.
The CBN has struggled to support the naira as the country's external reserves continue to fall.
Dollar shortages have caused many companies to halt operations and lay off workers, compounding an economic crisis exacerbated by the fall in global prices of oil, which accounts for over 70 per cent of Nigeria's budget revenue.
Experts expect the naira to depreciate further and hit the 500 mark to the United States dollar at the parallel market next week as the greenback scarcity persists and the CBN cuts supply to foreign exchange operators.
The local currency closed at 485 per dollar at the parallel market on Friday, up from 495 the previous day.
Meanwhile, the Bureau De Change operators are now getting $8,000 each per week against the usual $15,000 each per week.
The severe shortage of the dollar has put the naira under persistent pressure at both the official and parallel forex markets.
Economic and financial experts said unless the lingering dollar supply problem was abated, the volatility in the exchange rate and the consequent economic challenges might continue.
Culled from: http://punchng.com/external-reserves-fall-4bn-one-year/
Nigeria loses N200b yearly to diversion of cargoes
December 23rd, 2016
The Federal Government may be loosing about N200 billion yearly to diversion of automobile imports to the ports in neighboring countries, particularly the Port of Cotonou in Republic of Benin.
The amount, according to stakeholders represents the value of tariff that should have accrued to government through the Nigerian Customs Service (NCS), if the vehicles were imported through Nigerian ports.
The NCS is responsible for collecting revenues for government through duties payable as well as guarding against smuggling activities.
The Guardian learnt that more Nigerian importers are attracted to the Port of Cotonou because of lower customs duty on vehicles and other imports.
As a result, the Managing Director of PTML Terminal, Ascanio Russo, expressed support for the ban on importation of vehicles through the land borders imposed recently by the Federal Government.
PTML is the leading dedicated Roll-On-Roll-Off (RORO) terminal in Nigeria, handling the largest volume of vehicles imported into the country.
Russo said the company's operations were, however, negatively affected by the astronomical hike in the import duties of vehicles, leading to a loss of more than 80 per cent of its cargo volume.
The hike in vehicles import duty from 10 per cent to 35 per cent and the imposition of an additional 35 per cent surcharge under the administration of former President Goodluck Jonathan, led to the diversion of Nigerian-bound vehicles to ports of neighbouring countries and increased smuggling activities.
The PTML boss, in a statement said: "We fully support this ban, which we believe is going to halt the huge import of vehicles for the Nigerian market through the ports of neighbouring countries and the loss of revenues by the Federal Government, the Nigeria Customs Service and private operators.
"We are confident and hopeful that the government may want to go a step further and review downward the level of duties applied on used vehicles to make them affordable for the Nigerian people."
The Chairman, Seaport Terminal Operators Association of Nigeria (STAON), Princess Vicky Haastrup, had said, "Since the high tariff was introduced, importers have resorted to landing their vehicles at the ports of neighbouring countries and smuggling them into Nigeria without paying appropriate duties to government. This amounted to huge revenue loss to Customs.
"The policy also led to loss of more 5,000 direct and indirect jobs at the affected port."
The Managing Director, Nigerian Ports Authority (NPA), Hadiza Bala Usman, said the Nigerian ports are capable of taking the import traffic that will emerge as a result of the ban.
She said: "We are very ready to have seamless operations of increased traffic. Some of the traffic that we are seeing dwindling was the function of some of the government policies on importation of new cars. With this ban through the land borders, we will see an increase ports activities and we have put in place mechanisms to ensure that the additional traffic will not form any bottleneck. We always had that capacity, only that it was not utilised, but now that we hopefully will get more traffic due to the ban, we will just up our ante. The terminal operators are keen and they are ready to take up the traffic on vehicle importation through the ports,"
Several other maritime industry stakeholders had, at various times, called on the government to reduce the import duty on vehicles to stem the tide of smuggling and revive operations at Nigeria's RORO ports, which had suffered the most from the hike in vehicles import duty.
Culled from: http://guardian.ng/business-services/nigeria-loses-n200b-yearly-to-diversion-of-cargoes/
NIMASA shuts three port facilities in Lagos
December 23rd, 2016
For non-compliance with the International Ship and Port Facility Security (ISPS) Code, the Nigerian Maritime Administration and Safety Agency (NIMASA), which regulates shipping, maritime and coastal waters activities, has shut three jetties and port facilities for non-compliance with the provisions of the code. The ISPS Code is an amendment to the Safety of Life at Sea (SOLAS) Convention (1974/1988) on minimum security arrangements for ships, ports and government agencies.
The facilities shut included Heyden Petroleum Jetty Ijora, Lagos; Waziri Jetty, Dockyard Road, Apapa, Lagos; and Starz Marine Shipyard Limited, Onne in Rivers State.
Defending the closure of the facilities, spokesperson for NIMASA, Hajia Lami Tumaka, said the affected operators have persistently failed to comply with the ISPS code thus necessitating their closure to forestall a situation where security breaches in such facilities will negatively impact the compliant ones.
These closures are in exercise of the Agency's powers in line with provisions of Part VIII of the ISPS Code Implementation Regulations 2014, under which the facilities were adjudged to be non-compliant despite repeated warnings to remedy the deficiencies.
NIMASA has consistently stated its commitment to the enforcement of full compliance with the ISPS Code especially in the face of growing terrorists' activities globally.
While hosting a pre-assessment team from the United States Coast Guard (USCG) recently, the Director General of NIMASA, Dr. Dakuku Peterside, expressed the determination of the Agency to enforce the code saying that "ultimately all of us are working for a common purpose, a safer world through safety and security of the maritime sub sector. If we fix our different corners of the earth, the whole world will be safer for everybody. And so no effort should be spared in trying to guarantee safety and security."
While the exercise is a continuous one, all the facilities shut down will remain so until their managers corrected the identified deficiencies in line with the provisions of the Code, as the Agency aims to achieve 100 per cent compliance with the cooperation of all stakeholders.
Culled from: http://guardian.ng/business-services/nimasa-shuts-three-port-facilities-in-lagos/
Nigeria's Buhari unveils record budget
December 15th, 2016
Nigeria's President Muhammadu Buhari, has unveiled a record budget of more than 7 trillion naira ($24bn; £19bn) which is aimed at pulling the country out of its first recession in 25 years, Reuters news agency reports.
Presenting the budget at a joint sitting of the National Assembly and Senate, Mr Buhari said It marks an increase of more than 20% on last year's spending plan.
The budget seeks to boost spending to revive the economy, he added.
The recession was largely caused by low global oil prices, as crude sales account for two-thirds of the Nigerian government's revenue.
The president also said he wants to restore oil output to 2.2 million barrels per day.
It had been severely disrupted following a series of attacks on energy facilities in the oil-rich Niger Delta by militants demanding a greater of the region's oil wealth.
The budget unveiled to the National Assembly is now to be debated by the MPs.
It must be agreed by the parliament before Mr Buhari can sign it into law.
Culled from: http://www.bbc.com/news
FG to review CBN forex ban on 41 imports
December 13th, 2016
The federal government is set to review the Central Bank of Nigeria (CBN) policy banning 41 items on the legitimate importation list from accessing foreign exchange through the official forex window.
This is part of a 10-point fiscal roadmap, designed to stimulate the economy and set it on the path of recovery and growth by the government.
Highlights of the roadmap were rolled out by the Minister of Finance, Mrs. Kemi Adeosun, who represented the Vice President Yemi Osinbajo, at the annual dinner of the Lagos Business School.
Adeosun itemised the fiscal policies and actions being taken to tackle the key barriers to economic growth.
A major component of the roadmap, according to her, is to replace administrative measures on the list of 41 items with fiscal measures to reduce demand pressure on foreign exchange at the parallel market.
The Central Bank of Nigeria (CBN) had barred importers from assessing forex, particularly the United States dollars, for the 41 items via the official window in 2015. The measure had generated intense controversy.
The measure pushed importers to sourcing forex from the parallel market, which led to forex shortage and inadvertently affected the value of the naira and the economy.
But with the federal government's decision to reconsider its policy on the 41 items, the expectation, according to the roadmap, is that there would be a reduction in the demand for US dollars to ramp up forex supply.
Speaking at the session, which was attended by industry leaders across key sectors of the economy including oil, banking and telecoms, Adeosun said, "The Federal Government's Fiscal Roadmap is addressing barriers to growth that will drive productivity, generate jobs and broaden wealth creating opportunities to achieve inclusive growth."
She stated that the President Muhammadu Buhari administration was determined to convert Nigeria to a productive economy from the one that is consumption driven. To do so, she pointed out, the federal government would tackle the infrastructure deficit to unlock productivity, improve business competitiveness and create employment. The minister stated that the government would actively partner the private sector to achieve this by use of a number of new funding platforms. These, according to her, include the Road Trust Fund, which will develop potentially tollable roads, and the Family Homes Fund, which is an on-going PPP initiative for funding of affordable housing.
In addition, Adeosun detailed a revision to the tax provision that allows companies to receive tax relief for investment in roads on a collective basis. She explained that the existing provision that enabled companies to claim relief for road projects had only been taken advantage of by two companies, Lafarge and Dangote Cement. This was because few companies were large enough to fund roads alone.
The revision, she noted, would now allow collective tax relief such that companies would be able to jointly fund roads, subject to approval by FIRS and the Ministry of Works, and share the tax credit. This would be particularly attractive to firms in clusters such as industrial estates, many of which are plagued by poor road conditions.
She emphasised the role of infrastructure in creating inclusive growth, explaining the current barriers to growth in agriculture, solid minerals and manufacturing. She stated that the drivers of inflation were structural and were being addressed through the focus on power, rail and road infrastructure.
Adeosun also outlined measures planned to deal with the problem of hidden liabilities, which were affecting the banking sector and efforts to revive the economy. The minister explained that the conversion from cash accounting to IPSAS (International Public Sector Accounting Standards) had unveiled unrecorded debts owed to contractors, oil marketers, exporters, electricity distribution companies and others. These liabilities were estimated at N2.2 trillion and would be addressed with a 10-year Promissory Note Issuance programme in conjunction with the Central Bank of Nigeria. This measure would be subject to a rigorous audit process of all claims to ensure validity and mitigate fraud and the impact of past corrupt practices.
Henceforth, the minister said that measures would be put in place to prevent recurrence of such a problem by ensuring that contracts are managed in a manner that firms have assurance over when they would be paid. She cited the fact that many contractors were owed as a reason that many of those recently paid by government were slow in remobilising to site. According to her, "Some contractors had not been paid in the past 4 years and in some cases the banks they were owing, refused them access to the funds released, causing delays."
She explained further that those receiving the Promissory Notes would be expected to provide a material discount to government. The issuance was a solution to a long term problem that was ‘a drag on economic activity'.
Adeosun gave assurances that, despite the current challenges facing the Nigerian economy, the outlook is positive due to the strong fundamentals and the on-going reform programme. She reiterated that the federal government was determined to create an enabling environment and put in place supportive policies to return to growth in 2017 including greater alignment of monetary and fiscal policies.
Culled from: http://shipsandports.com.ng/fg-review-cbn-forex-ban-41-imports/
Trade takes backseat as seaports operations falter
December 8th, 2016
Efforts at job creation and price stabilisation are proving very little in the face of dwindling seaport operations. Statistics from the Nigerian Ports Authority (NPA) showed nine-month low of import and export estimates. The third quarter report, obtained by The Guardian showed that the ports recorded the lowest number of vessels in September this year, while the cargo throughput also saw its lowest numbers.
Lower import-export operations will starve the economy of the much-needed productive activity to create jobs, sustain high prices for consumer goods and keep the country much longer in recession than anticipated.
Nigeria's economy entered into recession following sustained negative growth that has lasted nearly one year. With low oil revenues, the country looks up to the seaports for revenue, which grew from N57 billion in 2005 to N184 billion in 2015, according to Ms Hadiza Bala Usman, the Managing Director of the NPA.
"Nigeria is import-dependent, and in this era of low oil prices which is affecting the way government does its business, there is a heavy revenue burden of expectation on the NPA to efficiently manage the ports and generate alternative revenue for the government," Usman said last month.
She spoke when NPA signed a Memorandum of Understanding with BudgIT Information Technology Network to develop an open budget system platform and implement a public data dissemination programme.
When seaports that contribute large chunks of Nigeria's non-oil revenue become inactive, it leaves government financially stranded. It means less capacity to invest in infrastructure, create jobs, address security, including fighting insurgency, and fund other activities that define good governance.
Concerned by the relative inactivity and acknowledging the need to beef up operations at the ports, government has banned importation of vehicles through the borders. The ban three days ago followed a similar ban on rice importation through the seaports of neighbouring countries.
Customs Area Comptroller at the Tincan Island Port, Bashar Yusuf, while lamenting the dwindling fortunes from ports operations, said that the Command would continue to explore avenues to maximise revenue collection. He admitted that the downturn has placed more responsibility on the Service.
Records at the NPA showed that about 341 vessels called Nigeria in September, the lowest in nine months and a fall from 400 recorded in August.Cargo throughput also dropped from 6.3 million metric tonnes recorded in January this year to 5.6 million in September, which is also the year's lowest.
The statistics also showed that a total of 3,347 ocean-going vessels have called Nigeria so far this year, estimated at about 100,152,274 metric tons.The breakdown showed that Apapa Ports received 318 vessels in the third quarter against 301 in second quarter; TinCan Island Ports recorded 406 vessels in third quarter, against 368 in the last quarter; Rivers Ports recorded 80 ships against 84 in the previous quarter; Onne received 152 vessels against 163; Calabar recorded 51 against 52; Delta received 132 ships in the third quarter while 109 was received in the last quarter.
Although, the total ongoing ships traffic increased from 1,077 in the second quarter to 1,139 in the third quarter, the coastal vessel traffic dropped from total 3,178 in the last quarter to 3,038 in the third quarter.
The Guardian gathered that importation of raw materials has dropped just as fewer vehicles are being shipped into the country. Vehicle dealers have at various times argued that lack of access to foreign exchange and low patronage were killing their business.
Amid the gloom, the NPA boss has promised to boost capacity by providing infrastructure and technologically up-to-date equipment at the ports.The Federal Government through the NPA, Usman said, would reposition the ports industry to play its key role as the gateway to the nation's economy.
Usman directed terminal operators to invest more in up-to-date equipment that will make the nation's seaports competitive and efficient.Growth in trade volumes, she said, was a strong factor in the need for port investment to boost efficiency, build robust, responsive and competitive port economy in tune with global best practices.
National President of the Association of Nigeria Licensed Customs Agents (ANLCA), Prince Olayiwola Shittu, said: "The exchange rate factor is highly instrumental to the vessel traffic plunge. People are no longer travelling, orders have dropped drastically and when there is no cargo, there will be no vessel."
The Director-General Lagos Chamber of Commerce and Industry (LCCI), Muda Yusuf, linked the sharp drop in importation to the foreign exchange scarcity and high exchange rate.
"For you to even import those materials that are not on the prohibition list (the Central Bank of Nigeria has placed ban on importation of 41 items), you cannot get the forex. So, if you don't have the forex, how will you import?"
He therefore urged government to review the liquidity of the foreign exchange market so that businesses would be able to buy and sell at any time irrespective of the rate.
Besides, he said the government should look into the import duties that are paid on raw materials and review it downward, adding that the currency depreciation is a huge burden on them. "So, if we have a high currency and have a high import duty, the cost will be completely unbearable," he said.
Culled from: http://guardian.ng/news/trade-takes-backseat-as-seaports-operations-falter/
FG Bans Importation of Vehicles Through Land Borders
December 6th, 2016
The federal government has prohibited the importation of vehicles, new and old, through land borders.
This was contained in a statement issued monday by the Nigeria Customs Service (NCS) Public Relations Officer, Mr. Wale Adeniyi.
The statement said there was a presidential directive restricting all vehicle imports to Nigeria Sea Ports only, adding that the order would take effect from January 1, 2017.
According to him, "The restriction on importation of vehicles follows that of Rice, whose imports have been banned through the land borders since April 2016.
"Importers of vehicles through the land borders are requested to utilise the grace period up till December 31, 2016 to clear their vehicle imports landed in neighbouring ports."
The government may have, with this restriction, acceded to one of the requests made by Nigerian Automotive Manufacturers Association (NAMA) to ease their operations.
Last week, the Chairman, Mr. Tokunbo Aromolaran, said: "Manufacturing has been tough in this environment for the reason that specific attention has not been paid to our own peculiarities. All the people that we compete against operate in an environment that makes it easy for them to access the things they need to put together to add value to their various environment, but here, you have to build your own power station, roads, water system, coming through the port is a hell, inflation affects us too, at 21 per cent, and when you put all these together, the cost of production is naturally higher."
Aromolaran, who is the Managing Director of VON Automobiles Limited, said if the government wants to encourage the auto sector then "there should be preferential policies to ensure that people, who are getting Nigerians employed and assisting to put food on the table in millions of homes, should be encouraged to grow and grow faster. When they get past that threshold, then they can compete with anybody. Now, we are not able to compete and that is why it is easier to import. For those who prefer to import, it is easy business. Nigerians are suffering; we are seeing people working in other countries while our own people are walking in the streets."
He said if not that VON was strong enough, they would have been down-sizing by now because "there is no business. But we have taken a stance that we will keep our workers because we have spent millions training them and it does not make sense to invest in people and let them go."
He said: "Right now, we are bleeding. That is why working in manufacturing in this country right now is not the best situation you can have. We are hoping that government looks at the policy again that surrounds manufacturing, let's have some preferential interest rates, let's look at the FX allocation to allocate to sectors that generate something back for the country. We spend a lot of money paying for invisibles, most of our dollars pay for things nobody sees, and if they are not there we wouldn't miss a thing. But there are those things that add value to us and if we can look at our policies again and redirect them, Nigeria will be better for it."
Aromolaran said the preferential duties given to auto manufacturers through the Auto Policy should be improved upon, explaining that "for those of us who assemble either from completely knock down or semi knock down, government, through the Auto Policy, has put in place preferential duties; it was part of the suggestions we made to encourage local production. That has helped so far, but we need to carry it further, the reason being that if we don't achieve the volumes, then what we want in terms of lower prices will not manifest and what we are hoping is that Nigerians would be channeled towards buying locally produced cars, which means less of cars that have been used by other people for 10-15 or more years abroad; we are not second-class people; Nigerians are proud, hardworking people; they should have the opportunity to also buy brand new cars when they have worked hard in their lives."
He said: "If the policy can be made wholesome, there is no need having a duty rebate alone, they must give us a wholesome environment where we can thrive, then the government will enjoy the benefit of it."
Culled from: http://www.thisdaylive.com/index.php/2016/12/06/fg-bans-importation-of-vehicles-through-land-borders-2/
CBN to fund local production of forex-banned items
December 2nd, 2016
The Central Bank of Nigeria has pledged to provide funding for local manufacturers to produce items considered not eligible for foreign exchange at the interbank window, the Manufacturers Association of Nigeria has said.
Owing to the fall in global oil prices, the CBN, in one of its measures to protect the country's fast depleting foreign reserves, had in 2015 restricted importers of 41 items from accessing forex through the official window.
Among the restricted imports are household items, consumables and some raw materials that manufacturers insist are essential to their production process.
The result of the restriction is that most of the firms that depend on the items have closed shop. Over 2,000 firms have shut down between 2015 and now, according to a recent data from MAN; more factories are said to be on the verge of being shut.
The President of the association, Dr. Frank Jacobs, and other stakeholders had been in constant meetings with top officials of the CBN and the Federal Government with a view to reviewing the list.
But Jacobs said the deliberations with the apex bank had yielded positive outcome, adding that the bank had promised to fund local manufacture of the 41 items.
He said, "The CBN has said that any manufacturer who wishes to produce the items on the list will be encouraged to do so and will have the CBN's full funding support including forex funding."
He stated this while delivering a keynote address during the Annual General Meeting of MAN, Ikeja Branch recently, adding, "Our engagement with the CBN has gathered higher momentum and the higher forex allocations to the manufacturing sector are direct results of this engagement."
Jacobs, who spoke on the theme ‘Vibrant diversified economy; panacea to economic recovery', said the issue highlighted the attention that needed to be paid to the manufacturing sector as the hope of getting out of the current recession.
According to him, the Federal Government has been committed to the sector and given its pledge that the suspension of the Export Expansion Grant, a major incentive to the sector, will be lifted soon and payment will commence from the scheme to beneficiaries.
Culled from: http://punchng.com/cbn-fund-local-production-forex-banned-items-2/
Stowaway cases rise, crime rates drop at Lagos ports – Police
November 28th, 2016
Crime rate at the seaports in Lagos have reduced drastically due to low level of activities occasioned by low volume of importation, a senior police source in the Western Port Police Command has told SHIPS & PORTS DAILY.
He however said the ports have witnessed more cases of stowaways in recent times.
The police source, who pleaded anonymity, as he was not authorised to speak with the media, explained that compulsory charging of suspects to court without option of bail and other measures put in place by the police, including constant police presence at the terminals, training of its personnel had helped to discourage crime at the Lagos ports.
"Obviously, the economic recession is affecting activities in the port and this can be linked to some government policies. The port is no longer as busy as before, as the economy is really biting hard on the populace. And I think this is why crime has reduced in the port, but recently, few persons have been caught as stowaways on vessel," he said.
The officer identified some challenges faced in the port as bad access road and poor lighting at night.
"The patrol team moving around the ports has also helped to reduce crime. The calibre of police personnel in the port are officers who know their onions and whoever is arrested is charged to court without any form of cutting corners. Such attitude has deterred port users from engaging in any form of crime.
"The re-training of police officers have also contributed to better service delivery because they now have the orientation that they are public servants so they have to be respectful and be courteous when talking to members of the public," he noted.
He further added that there has been a good synergy with other security agencies especially the Nigeria Customs Service.
"The fight against crime is a collaborative effort. No one can do it alone," he said.
Culled from: http://shipsandports.com.ng/stowaway-cases-rise-crime-rates-drop-lagos-ports-police/
Group raises alarm over Delta Port, says 15 vessels grounded in five months
November 23rd, 2016
A body known as the Shipping Trade Group (STG), Warri has raised alarm over the dilapidated condition of the once boisterous Delta Ports in Warri, Delta State, saying that no fewer than 15 vessels have been grounded in the port channel in the past five months.
In a letter signed by its President, Ackerman Thilo and Secretary, Obioma Ochulor, and addressed to the Managing Director of Nigerian Ports Authority (NPA), the group said the breakwater at Escravos "is now completely submerged", thereby destroying the buffer between the ocean and the river channel.
This development, according to them, creates room for siltation and negatively impacts on the port channel, restricting the draft to a maximum of five metres.
"More than 15 vessels have gone aground at the Escravos entrance since June this year with its attendant demurrages, man hour loss, hiring of tugboats, and damages to ship propeller," the STG declared.
The group also said that there were no more buoys on the port channel, leading to "frequent grounding of vessels along the channel".
"The non-availability of functional pilot cutter in the Warri/Sapele pilotage district has reached an unbearable and disquieting point.
"Be informed that since 2008, shipping companies operating in Delta ports have been paying for crafts to convey your river and harbour pilots to and fro Escravos and Bennett Island.
"Since then, we have been demanding for refund of such expenses as it amounts to double payment because those payments have already been covered in your provisional bills.
"Through this medium, we are appealing you grant approval to our genuine demand and take over your statutory responsibility of conveying your pilots to and fro their port of primary assignment forthwith.
"On this note, we plead herewith that you provide your personnel the requisite equipment to do their job without expecting us to bear the brunt of your failure," the group added.
Culled from: http://shipsandports.com.ng/group-raises-alarm-delta-port-says-15-vessels-grounded-five-months/
Senate begins public hearing to amend NPA, NIWA laws
November 22nd, 2016
The Senate on Monday commenced a public hearing to amend the Nigerian Ports Authority (NPA) and National Inland Waterways Authority (NIWA) Acts.
The upper chamber of the National Assembly assured stakeholders that it would set performance benchmark for NPA in accordance with global best practices.
President of the Senate, Bukola Saraki, while declaring open a public hearing on amendment of the NIWA and NPA Acts organised by the Senate Committee on Marine Transport, lamented that Nigeria was losing huge revenue to inefficiencies in the Nigerian maritime sector.
Saraki, who was represented by the Deputy Minority Whip, Senator Philip Tanimu Aduda, said that the nation's marine sector had fallen short of meeting the needs of water transportation system.
"The 8th Senate will take time to create enabling laws for private sector participation and NIWA must be part of Nigeria's agencies that generates revenues for economic growth," he said.
The Chairman of the committee, Senator Ahmed Rufai Sani, expressed optimism that the marine transport would be part of Nigeria's quest for economic recovery.
He said, "With the concession of the port terminals in 2016, the Nigerian Ports Authority is no longer in active participation in the day-to-day running of ports in Nigeria. We will set benchmark and give adequate legal backing."
Sani also said the proposed amendment would be geared towards huge revenue generation and creation of jobs.
Culled from: http://shipsandports.com.ng/senate-begins-public-hearing-amend-npa-niwa-laws/?utm_source=feedburner&utm_medium=email&utm_campaign=Feed%3A+Shipsandportscom+%28shipsandports.com.ng%29
Nigeria inflation grows to 18.4% in October – NBS
November 15th, 2016
Nigeria's inflation rate grew geometrically in September as Consumer Price Index (CPI) rose by 0.48% bringing the figure to a total of 18.4 per cent at the end of October 2016. This is higher than the 17.9 per cent recorded in the previous month.
"The Consumer Price Index (CPI) which measures inflation increased by 18.3 per cent (year-on-year) in October 2016, 0.48 per cent points higher from the rate recorded in September (17.9 per cent)," the National Bureau of Statistics said in its latest report.
According to the report, the economy recorded increment in the price of good across almost all major divisions of the economy, which contribute to the Headline Index.
The Food Index rose by 17.1 per cent (year-on-year) in October, up by 0.47 per cent points from 16.6 per cent recorded in September. During the month, all major food groups which contribute to the Food sub-index increased with Fruits recording the slowest pace of increase at 11.5 per cent.
Communication and Restaurants and Hotels recorded the slowest pace of growth in October, growing at 5.7 per cent and 9.4 per cent year-on-year respectively.
In the month under review, core sub-index went up by 18.1 per cent, while highest increases were seen in housing, water, electricity, gas and other fuels as well as, fuels and lubricants for personal transport equipment and education.
There was also a significant price movement under the Core Sub-index for Clothing and Footwear, which recorded as increase of 17.8 per cent year on year. Hotels and restaurants, recreation and culture as well as communication record the least growth of 9.4 per cent, 10.3 per cent and 5.7 per cent respectively.
On month-on-month basis, the Urban index rose by 0.81 per cent in October from 0.79 per cent recorded in September bringing it to a total of 19.9 per cent, while the Rural index rose by 0.84 per cent in October from 0.83 per cent in September bringing it to a total of 16.9 per cent.
The percentage change in the average composite CPI for the twelve-month period ending in October 2016 over the average of the CPI for the previous twelve-month period was 14.2 per cent, higher from 13.5 per cent recorded in September. The corresponding twelve-month year-on-year average percentage change for the urban index increased from 14.4 per cent in September to 15.3 per cent in October, while the corresponding rural index also increased from 12.6 per cent in September to 13.3 percent in October.
The rise in food index was caused by increase in prices of Bread and Cereal, Fish, and meat.
Culled from: http://shipsandports.com.ng/nigeria-inflation-grows-18-4-october-nbs/
Nigeria to end $800m a year wheat import from Russia
November 15th, 2016
The federal government has resolved to end the importation of wheat from Russia to preserve foreign reserves.
Foreign Affairs Minister of State Hajiya Khadija Abba-Ibrahim, stated this at the weekend after the fourth Joint Commission meeting between Russia and Nigeria in Abuja.
Nigeria spent $880 million on wheat imports last year and has already spent $660 million this year.
The minister said Nigeria would henceforth invite Russians to help improve the country's agricultural productivity.
"We import a lot of wheat from Russia and we are telling Russia that this has to stop.
"We want the Russian companies and farmers to come to Nigeria to show us how we can grow our agriculture sector with modern technology," the minister said.
The Russian delegation led by Dianov Alexandar Yurievich attended the meeting.
The value of wheat imported into Nigeria between January and September 2016 is $660m, according to data obtained from the National Bureau of Statistics.
Nigeria, in the first week of November, imported approximately 53 million metric tons valued at $7.8 billion.
Nigeria has stepped up wheat production and has hit 60,000MT, ranking it 61st out of 79 countries in global production.
According to data from the Central Bank of Nigeria, the country spends $11 billion (N3.1tn) annually to import wheat, rice, sugar and fish.
Nigeria's food import was growing at an unsustainable rate of 11 per cent per annum.
Wheat is in high demand in Nigeria as a raw material for bakery and feed mills.
Culled from: http://shipsandports.com.ng/nigeria-to-end-800m-a-year-wheat-import-from-russia/
Investments in Nigeria’s oil sector decline to N78b
November 14th, 2016
Capital importation into Nigeria's oil and gas sector has declined from the $200 million (N90 billion) from the second quarter of 2016 to $172 million (N78 billion) in 3rd quarter, according to the National Bureau of Statistics (NBS).
But this decline has been attributed to uncertainty in the country's oil and gas sector occasioned by insecurity, delay in the passage of the Petroleum Industry Bill (PIB) and delay in meeting contractual obligations in the services industry.
NBS stated in the report that the oil and gas sector maintained a high level of capital importation; although it decreased by 14.4 per cent relative to the previous quarter; but still elevated relative to previous periods at $171.63 million.
It noted that the sector is characterised by isolated periods of high capital importation, adding that it is therefore unusual that the level has remained high for two consecutive quarters.
This sector, it said, accounted for the third highest amount in the third quarter of 2016.The oil and gas sector, had for the first time, during the second quarter of the year, recorded the largest amount of capital, which accounted for $200.39 million, or 19.23 per cent of the total.
NBS explained that in all previous quarters, the sector that imported the most capital had been banking, financing, production or telecommunications.
It noted that oil and gas is characterised by occasional high levels of capital importation, interspersed with periods in which very little capital is imported. "This sector imported $20.83 million in first quarter and only $4.86 million a year previous," it added.
Giving reasons for the decline in capital importation to the country's oil and gas sector, former President, Nigeria Society of Petroleum Engineer, Dr. Emeka Ene, said it was due to increase of uncertainty, which he said repels investors' interest in the sector.
Ene, also a former Chairman, Petroleum Technology Association of Nigeria (PETAN), and Managing Director of Oil Data Nigeria Limited, noted that some major projects in the oil and gas sector have suffered delays.
He said that there is gap in policy alignment on gas, PIB versus Ministry of Environment and security situation in the country."Until we have an alignment, there may not be substantial investment in the sector. Majority of the investment end up with the service industry, which executes most of the jobs. Right now, the service industry is in a very comatose state because the contractor's obligations are not being met. A lot of money is being owed to Nigerian service companies over a very long period of time, which creates uncertainty," he said.
Ene warned that the effects of the present lack of substantial investments are going to impact negatively on the Nigeria's oil sector in the future."We are going to be feeling the effects when the oil industry turns around. It is going to be worse. Some service companies are being owed for over two years. Bear in mind that the companies borrowed from the banks to execute the contracts and they're not being paid for two years, how will the companies be able to take another loan to service any other business? This is exactly the uncertainty we are talking about."
Speaking on the possibility of low oil prices having effects on investment inflow into the oil and gas sector, Ene citing Kuwait as an example, said: "Between 2015 and 2020, it planned to spend $50 billion in the oil industry. This is because it recognised that this is the best time to drill and produce and that the pricing issues will definitely be tackled in the future and that prices will rise in the future.
"Nigeria service industry should be encouraged, because they can do the work cheaper, and get people employed for longer, so that when the industry turns around, these people will still be alive to do the work.
"The oil industry is strategic and will continue to be strategic in Nigeria for long time for economic security. We have seen Nigerian government not having the dollars to pay for goods imported and its impact on the wider economy.
"Although the oil industry does not contribute so much to the country's Gross Domestic Product (GDP) like agriculture, but the impact of the oil industry is definitely much more because we are still part of the global economy. Most of the infrastructural projects being undertaken by government need dollars for execution.
"The service industry is facing severe challenges. We were asked to reduce service charges; we are being owed for two or three years and at the same time, and the government refused to reduce systemic costs. For example, we have some agencies, which have not reduced their fees and licenses running to billions of naira."
Ene therefore called on the Federal Government to tackle the local challenges confronting on oil sector is make it attractive to more investment.
On his part, PETAN Chairman, Mazi Bank-Anthony Okoroafor, emphasised the need for the Federal Government to reduce contracting cycle from three to four years to six months.
Okoroafor said that there also need to create good image for Nigeria through institutional transparency, well-articulated policy consistency and building of enabling infrastructure.
He said there is need to restructure the country's oil and gas industry operations by simplifying access to assets, maintaining sanctity of contracts, instilling corporate governance in all our dealings and reducing overall project costs for cost effectiveness.
Culled from: http://guardian.ng/business-services/money/investments-in-nigerias-oil-sector-decline-to-n78b/
Why Nigeria is cutting down on food importation – Osinbajo
November 11th, 2016
Foreign exchange constraints and the availability of arable land in Nigeria makes the case for improved local agricultural production in Nigeria an imperative, rather than continued importation with its significant pressure on dwindling foreign earnings of the country.
Vice President Yemi Osinbajo gave this explanation earlier on Thursday while receiving in his office a Russian delegation led by the Russian Minister of Agriculture who is also the Co-Chair of the Nigeria-Russia Joint Commission, Alexander Tkachev.
"The oil prices have gone down tremendously and yet large amount of foreign exchange is used to purchase food abroad and we have large arable land for agric. It won't make sense, if you don't use the land," according to the vice president.
According to a statement by his spokesman, Laolu Akande, Prof. Osinbajo then invited Russian farmers to invest in Nigeria, produce and import from here, saying "We are just 6 hours away from Europe by air. Vegetables, flour can be exported to Europe from here, even our local market here is a lot."
Both the Vice President and the delegation that included the Russian Ambassador in Nigeria, Ambassador Nikolay Udovichenko, Russian Deputy Minister of Agriculture, Evgeny Gromyko and officials of Russian's firm-United Company (Rusal) agreed that Nigeria and Russia should deepen the existing diplomatic relationship, especially economically.
According to Osinbajo, "There is a lot of money to be made if Russian technology in agriculture is deployed locally," adding that there are better opportunities for economic cooperation between both countries.
Speaking earlier, the Russian Agriculture Minister expressed his country's willingness to enhance the existing trade relations with Nigeria.
He observed that the Nigeria-Russia trade volume as at the end of 2015 exceeded $300 million, but added that there are potentials for improvement in the years ahead.
Culled from: http://shipsandports.com.ng/nigeria-cutting-food-importation-osinbajo/
Dangote refinery to start operation in 2018
November 9th, 2016
Dangote Group said its 650,000 barrels per day capacity refinery currently under construction in Lagos would come on stream by the end of 2018.
The group's Executive Director, Stakeholders' Relations/Corporate Communications, Alhaji Ahmed Mansur , announced this during a media parley in Abuja on Tuesday.
He said this would ultimately end fuel importation.
He said the refinery's daily production capacity would be 150 per cent of the current total demand of petroleum products in the country, saying that the excess would be exported to other countries.
Mansur said a 1.3 million metric tonnes per annum petrochemical plant was also under construction at the refinery site in Lekki area of Lagos .
In addition , he said that a fertiliser company with capacity to produce 2.8 million metric tonnes of assorted fertilisers was also being added to help the country to achieve food security.
Mansur disclosed that the company had also diversified into gas business as it had started constructing a gas pipeline from the South East to Lagos.
He said that the gas plant, when completed, would have the capacity to produce three million standard cubic metres of gas per annum.
The executive director said the project would help the country to record appreciable improvement in power and manufacturing sectors.
According to him, the company's huge investment in the oil and gas sector will impact positively in the economy, especially in the areas of employment and preservation of foreign exchange.
Culled from: http://shipsandports.com.ng/dangote-refinery-to-start-operation-in-2018/
Naira may not fall below 475, say experts
November 7th, 2016
Economic and financial experts say the naira may not fall below 475 against the United States dollar between now and end of December.
They based the prediction on declining dollar demand and efforts being made by the Central Bank of Nigeria to boost supply of foreign exchange.
The experts spoke in separate interviews on the outlook of the naira.
"It appears the exchange rate has got to the peak, which is something around 470/dollar. I think the naira may not go beyond 475/dollar between now and end of December," a currency strategist at Ecobank Nigeria, Mr. Kunle Ezun, said.
He added that holidaymakers returning to Nigeria for Christmas would also make dollar supply to increase.
According to Ezun, this will reduce the currency volatility created by dollar scarcity.
The Chief Executive Officer, Cowry Asset Management Limited, Mr. Johnson Chukwu, said due to declining economic activities, demand for forex was gradually reducing.
This, coupled with efforts being made by the regulator to boost forex supply, will make the naira-dollar exchange rate to remain around the 470 mark in the coming weeks, according to him.
The President, Association of Bureau De Change Operators, Alhaji Aminu Gwadabe, said efforts being made by the CBN to boost supply would make the naira to appreciate in coming months.
He said, "The CBN Governor, Mr. Godwin Emefiele, met with the International Money Transfer Organisations in London on Saturday. The government is trying to woo these operators to enable them to bring more forex into the country. This will boost supply. Already, the exchange rate which the IMTOs can sell dollars to the banks has been increased from 336 to 375."
He added, "At the association level, we have created committees that will check sharp practices in the market. All these will yield result."
Culled from: http://punchng.com/naira-may-not-fall-475-say-experts/
Hadiza Usman: NPA will not grant approval to some proposed deep seaports
November 4th, 2016
There are indications that despite having a number of deep seaport projects planned by prospective private and state government ownerships across the country, not all will get approval from the Nigerian Ports Authority (NPA).
Managing director of NPA, Hadiza Usman said no seaport would be approved pending the outcome a 25-year port master plan which the Federal Ministry of Transportation through the NPA is currently working on.
There are several deep seaports planned across the country's Southwest and South-south regions, specifically in Lagos and Ogun/Ondo states and Cross River and Akwa-Ibom states respectively. Some of the ports are the Lekki Deep Seaport and the Badagry Deep Seaport in Lagos, the Olokunla Port in Ogun and Ondo states and the Ibom Deep Seaport in Ibaka, Akwa-Ibom State.
The need for building deep seaports for receiving ultra-mega vessels with huge economies of scale have been in the front burner for nations in recent time, with Nigeria responding to such need, but having so many deep seaport plans at the same time.
Experts have also raised concerns on the need to concentrate on just one or two of them owing to the current economic situation in the country. Most of the ports are being developed in partnerships with the Federal Government through the NPA.
"I strongly advise that we get only one deep seaport off now because of current economic situation and even if we have private participation coming up for all these deep seaports, we know that the terms will keep changing," said Capt Adamu Biu, a master mariner and former Executive Secretary of the Nigerian Shippers' Council.
With concerns that there is just one channel and point of entry in some of the areas, such as the Calabar and Akwa-Ibom coastal axis, the NPA boss, Usman said not all of the planned ports would eventually be approved.
"We have the nod from the Ministry of Transport that no port will be approved pending the outcome of the 25-year port master plan which we are currently working on. And of course, we understand that with what we are doing regarding the port master plan, not all of the ports will be approved eventually," Usman said.
Culled from: http://shipsandports.com.ng/hadiza-usman-npa-will-not-grant-approval-proposed-deep-seaports/
NPA acquires new tugboats worth N6.2bn to boost port operation
October 31st, 2016
The management of Nigerian Ports Authority (NPA) has acquired two brand new modern tugboats to enhance marine operation and service delivery in the Lagos Pilotage District, SHIPS & PORTS DAILY can authoritatively reveal.
Usually reliable sources in the office of NPA's Managing Director, Hajia Hadiza Bala Usman, told SHIPS & PORTS DAILY that the ultra-modern, high-tech boats were acquired at the sum of 9million Euros each (equivalent of N3.1billion), bringing the total amount spent on both to a princely N6.2billion.
The boats, named MT Daura and MT Ubima were delivered to NPA by Depassa this month and moored parked at Continental Shipyard Limited in Apapa, awaiting commissioning by the Managing Director.
Daura is the home town of President Muhammadu Buhari while Ubama is the home town of Transportation Minister, Rotimi Amaechi.
The source said two similar boats - named MT Uromi and MT Majia - had earlier been delivered by Depassa on September 1, 2015 and have been deployed to enhance the provision of marine services to ships coming in and going out of the ports.
"The new tugboats were built by Damen shipyard in Romania and they have very strong engines built by Rolls Royce. They are the best you can find in any port of the world. They are strong and very efficient," the source, who asked to remain anonymous because he was not officially authorised to speak on the matter, said.
He said the delivery of the boats were in line with an ambitious project by the new management of NPA to retool the ports as the authority seeks to break new frontiers in the maritime trade.
The boats' specifications sighted by SHIPS & PORTS DAILY revealed that they were from the series of ASD Damen tugboats 2810 with 60tonnes bull and pull power. They are 28metres long and 10metres wide, with a two-thruster propulsion system built by Rolls Royce and driven a state-of-the-art turbo MTWU 4000 diesel engines made in Germany. They have a speed of 40 knots, which makes for faster deployment and operation. They also have fire-fighting capabilities.
When contacted, Managing Director of Depassa Nigeria Limited, Mr. Danny Fuchs confirmed that his company had delivered the new tugboats to NPA. While commending the new management of NPA for acquiring the new boats, he said the new assets will assist in faster pull and push of ships visiting the port.
"The ships are becoming bigger so the tugboats must become stronger. The new boats will make for better efficiency because they can handle ships of any size including the Egina FPSO expected in Nigeria soon," he said.
The new tugboats are expected to be commissioned and deployed to service in November.
Culled from: http://shipsandports.com.ng/npa-acquires-new-tugboats-worth-n6-2bn-to-boost-port-operation/
Government to begin restriction of access to seaports, airports in 2017
October 25th, 2016
The Federal Government has directed that from January 1, 2017, nobody will be allowed access into the seaports and airports without a security gate pass.
The Minister for Transport, Rotimi Amaechi, who approved this directive in a letter referenced T.4604/S.2/T3/491 obtained by The Guardian yesterday said: "for anybody to gain access to the port, he/she must have proof of business at the port for that day or he/she is a staff of the port."
The letter signed by Deputy Director, ICD, Maritime Service Department of the Ministry, Patrick Ekawu, said that as a requirement for access into the ports, freight forwarders must possess the Council for the Regulation for Freight Forwarding in Nigeria (CRFFN) certificate or identity card before obtaining the gate pass to operate at the seaports, airports, and land border stations.
It however, declared that the "CRFFN shall collect all monies for the Practitioners Operating Fee (POF) and warehoused by the Council and disbursed based on the formula recommended by the committee,"
The directive therefore forbid the associations from collecting dues within the seaport and airport facilities and land border stations.
"From January 1, 2017, the use of biometric cards will be enforced to make for seamless and effective operation at the seaport.
"The representatives of the Nigerian Customs Service (NCS) are to inform their management on the decisions reached at the meeting for their implementation of Sections 19(1&2) of the CRFFN Act.
"That the NCS will ensure that all license to be issued or renewed henceforth will first be cleared by CRFFN. The Council will prior to issuance ensure full payment of registration, yearly subscription and POF.
"Furthermore, that the Nigerian Civil Aviation Authority (NCAA) will direct the Nigerian Aviation Handling Co. Limited (NAHCO) and Sky Aviation Handling Co. Limited (SAHCOL) to comply with the minister's directive on payment of Practitioners' Operating Fee and Nigerian Ports Authority to direct the Seaport Terminal Operators (STOAN) to comply with the minister's directive on payment of Practitioners' Operating Fee by ensuring the POF payment as additional requirement for release of cargo from ports.
"That the port access through biometric card will take effect from 1st January 2017, while the payment of POF will commence with effect from Monday 24th October 2016," the release stated.
The stakeholders had on October 11 met with the minister at the Ministry's conference room in Abuja to look at the recommendations of the report on the investigations of alleged illegal collection of fees at the nation's seaports, airports and land border stations.
Culled from: http://guardian.ng/news/government-to-begin-restriction-of-access-to-seaports-airports-in-2017/
Government to reduce number of agencies at ports
October 25th, 2016
Worried about the loss of business to neighbouring countries arising from low competitiveness, indications emerged at the weekend that the Federal Government may further reduce the number of agencies at the nation's ports.
This is part of measures to address complaints bordering on the ease of doing business.
The Government said efforts are underway to reduce human intervention at the ports, some of which have been responsible for the poor operational efficiency, by deploying technology and increasing stakeholder collaboration on regulatory frameworks.
The Minister of Transportation, Rotimi Amaechi, noted that the present administration is looking at issues raised by stakeholders bordering on concessions, charges and local content as well as the number of agencies at the ports. This is with a view to improving earnings from non-oil exports as well as encouraging bilateral ties between Nigeria and other trading partners.
With many importers and traders diverting their cargoes to neighbouring countries, the Government noted that measures are underway to address the bottlenecks in the maritime sector.
Besides, the government also announced plans to invest massively in infrastructure and human capacity development, noting that it is focusing on policies and reforms geared at promoting diversification and structural reform of the economy.
The Government had in the past reduced the number of agencies at the ports in a bid to check complaints by operators on the number of signatories and turnaround time needed to clear their cargoes at the ports.
Vice President, Prof. Yemi Osinbajo, noted that successful policies execution is expected to result in enhanced productivity growth; increase manufacturing share to Nigeria's total export earnings and drastic reduction in susceptibilities of the economy to external shocks from commodity volatility currently being experienced by the nation.
He explained that reform efforts at the ports is focused on deploying a deliberate, well thought through automation strategy that achieves the tripartite objectives of blocking revenue leakages, improving process efficiency and reducing human intervention.
During a public-private dialogue on port efficiency and maritime sector roadmap organised by the Lagos Chamber of Commerce and Industry ( LCCI), he revealed that in the strategic implementation plan for 2016, the Government is making efforts at facilitating trade by ensuring that the environment is conducive for operators and investors.
Osibajo, who was represented by the Senior Special Assistant to the President on Industry, Trade and Investment, Office of the Vice President, Dr. Jumoke Oduwole, stated that to improve ease of doing business in Nigeria, particularly trade across borders, the administration is focusing on critical infrastructure to achieve the objective.
In his words, "In light of the well-documented challenges experienced by users of Nigerian ports today, making it easier and faster to facilitate the exit and entry of goods into Nigeria, as well as improving the business environment are critical to the sustainable and inclusive development of the Nigerian economy."
Culled from: http://guardian.ng/business-services/government-to-reduce-number-of-agencies-at-ports/
How $15b Nigeria-India deal will tackle forex crisis
October 24th, 2016
The Nigeria-India upfront oil payment deal will help the Federal Government to tackle the foreign exchange (forex) crisis in the country.The Minister of State for Petroleum Resources, Dr. Ibe Kachikwu, initiated the deal during a three-day working visit to India.
In an exclusive interview with The Guardian in August, the minister had disclosed his intention to search for a market, particularly in Asia and other oil-consuming nations, with a view to shoring up the naira, while guaranteeing revenue to the government.
The success of the deal would also be a huge help for the Central Bank of Nigeria (CBN), which has made efforts to attract foreign inflows to support foreign exchange market, including the pursuit of a naira-yuan swap.
Nigeria's external reserves, currently at $23.9 billion, will not only be shored up with a $15 billion upfront payment for crude purchase, but will also provide dollar earnings for the federal and state governments to stabilise domestic fiscal conditions and current account deficits.
At the weekend, analysts at Afrinvest Securities told The Guardian that the deal would support the monetary policy and particularly the foreign exchange market, as it would guarantee additional three months' import cover and reduce speculative tendencies in the market.
Meanwhile, India imported about 23.7 million metric tonnes (169.2m barrels) between 2015 and 2016, accounting for about 12 per cent of the country's total import.
According to a recent export data from the Nigerian National Petroleum Corporation, India was ranked a top export destination of Nigerian crude, with 17.6 per cent of total crude exports sold to India in 2014.
The deal would be due for signing by December, according to reports. Besides the upfront payment for crude oil, investments in the upstream and midstream sectors, particularly refining, by Indian public sector companies, it will also help to reduce Nigeria's oil import dollar bills.
"This upfront payment provides the Indian government an opportunity to hedge against commodity price risks peradventure the proposed production cut/cap agreement by the OPEC holdsup; which may result in a rally in oil prices.
"Furthermore, the proposed investments in the midstream sector by the Indian public sector companies (if harnessed properly), coupled with the coming on board of Dangote refineries has the potential to end the supply/demand gap for petroleum products in the country," the analysts said.
But a top government official told The Guardian that the challenge to the policy adoption would be the fear of under-production, given the unending militancy and "greed" - the tendency for some to oppose it based on future price rise.
"For me, something must give. Where we find ourselves as a country is compelling enough to give off something in order to achieve our goals. The idea is good and should be devoid of the usual politics," the source said.
The Managing Director of Cowry Asset Management Limited, Johnson Chukwu, expressed optimism that government would pursue this initiative, which he also described as "noble", to logical point.
According to a finance analyst, Femi Ademola, it means that the country, besides getting the money, has sold its oil output, whether there is volatility in price or not. That means sustained earnings and guaranteed market.
Meanwhile, the United States (U.S) crude oil imports from Nigeria rose by 504,000 barrels per day (bpd) during the first half of 2016, according to the U.S. Energy Information Administration (EIA).
Also, the Nigerian National Petroleum Corporation (NNPC) said that the country's crude oil exports to South America increased from the 854,048 barrels in April to 2.5 million barrels in June.
NNPC added that Nigeria's crude oil export to North America increased from 9.5 million in the month of May to 12.8 million in June. Besides, the World Bank has raised its 2017 forecast for crude oil prices to $55 per barrel from $53 per barrel as members of the Organisation of Petroleum Exporting Countries (OPEC) prepare to limit production after a long period of unrestrained output.
As at yesterday, Brent crude oil prices gained by 0.77 per cent at $51.78 per barrel, while West Texas Intermediate (WTI) increased by 0.43 per cent to reach $50.85 a barrel.
Culled from: http://guardian.ng/news/how-15b-nigeria-india-deal-will-tackle-forex-crisis/
IMF Affirms Nigeria as Africa’s Biggest Economy
October 19th, 2016
Nigeria has been affirmed by the International Monetary Fund (IMF) as the biggest economy in Africa - ahead of South Africa and Egypt.
In August 2016, Nigeria was reported to have lost its spot as Africa's biggest economy to South Africa, following the recalculation of the country's gross domestic product (GDP).
"A recalculation using current exchange rates put South Africa on top because the rand has strengthened against the dollar," BBC had said in August.
"Based on gross domestic product at the end of 2015 published by the International Monetary Fund, the size of South Africa's economy is $301 billion at the rand's current exchange rate, while Nigeria's GDP is $296 billion," Bloomberg had also said.
But according to TheCable, latest estimates from the IMF however put Nigeria's GDP at $415.080 billion, from $493.831 billion at the end of 2015.
The IMF World Economic Outlook for October 2016 puts South Africa's GDP at $280.367 billion, from $314.732 billion a year earlier.
Egypt's 2016 data was reported as not available, but its 2015 size remained at $330.159 while that of Algeria, one of the largest economies on the continent, was put at $168.318 billion.
The United States, China and Japan maintained their spots as the largest economies in the world, with a GDP of $18.561 trillion, $11.391 trillion and $4.73 trillion respectively.
These countries are being trailed by Germany, United Kingdom and France in that order.
The Managing Director of the IMF, Christine Lagarde, said at the just concluded World Bank/IMF meetings that global growth had been too slow for too long.
"We continue to face the problem of global growth being too low for too long, benefiting too few," she said after the world economic outlook was published.
The world expects an economic growth of 3.1 percent in 2016, reviewed from 3.4 percent.
Culled from: http://www.thisdaylive.com/index.php/2016/10/19/imf-affirms-nigeria-as-africas-biggest-economy/
EU may ban Nigeria's export over partnership agreement
October 18th, 2016
There are indications that the European Union will at the end of October 2016 stop the Temporary Free Market Access it granted Nigeria and other ECOWAS member States to export their products to the region. This is because of Nigeria's failure to sign the Economic Community of West African States (ECOWAS)/European Union (EU) Economic Partnership Agreement (EPA) over the past six years.
Investigation shows that of the sixteen ECOWAS member countries, twelve have ratified the agreement except Nigeria, Liberia, Sierra-Leone and the Gambia.
Checks show that EU is Nigeria's biggest trade partners for exports, accounting for 36 per cent, followed by India 15 per cent, Brazil 10 per cent, South Africa 5 per cent and Japan 4 per cent. On the imports side, Peoples Republic of China is the country's main export partner accounting for 25 per cent, EU 19 per cent, USA 10 per cent and India 5 per cent.
A cursory look at the annual trade data of export goods (oil and non-oil) from Nigeria to the EU, obtained from the Commission, showed that the top ten are oil and gas, cocoa preparations, oil seeds, skins and leather, rubber, copper, fish and crustaceans, including wood and wood charcoal.
EU Ambassador/Head of EU delegation to Nigeria and ECOWAS, Michel Arrion, disclosed that the EU has no offensive agenda for Nigeria and other countries in the region, adding that other West African countries will appreciate Nigeria's contribution to the West African regional cohesion as they need the EPA to retain their EU access after October 2016. According to him, in a move to aid the ratification of the Economic Partnership Agreement (EPA) by West African countries, especially by Nigeria and Gambia, the European Union (EU) had announced plans to spend at least 6.5 billion euros every five years beginning from 2015-2019, as well as during the transition period of 20 years till 2035.
The EU urged the Federal Government to review its protectionist policies in the interest of the region as non-ratification of the EPA by Nigeria may affect ratification of the trade treaty in the ECOWAS region, as well as terminate the temporary free access to the European Union being enjoyed by the country and other ECOWAS member States.
According to the EU, the EPA has no hidden agenda; rather the benefits of the trade deal should be properly appraised by stakeholders.
Arrion said EU will be making strong commitments in terms of financial development assistance, saying that the EU and its member States have all agreed to provide a minimum of 6.5 billion euros of trade development assistance every five years till 2035. "Every five years, we are committed to give grants, development assistance.
EU and the 28 member States have agreed to give a minimum of 6.5 billion euros for every five years. In the last five years it was 8.5 billion euros.
We are very comfortable to provide this development assistance. He assured that the EU will not invade the West African market with products that could compete with domestic products of what Nigeria and other countries in the region would be producing, pointing out that the EU has removed all its export subsidies to the West African market.
Culled from: http://shipsandports.com.ng/eu-may-ban-nigerias-export-over-partnership-agreement/
Nigeria begs US to lift sanction on jetties over non-compliance to ISPS Code
October 13th, 2016
The Federal Government has reiterated Nigeria's commitment to maritime security through the full implementation of the International Ship and Port Facility Security (ISPS) Code. This is even the government appealed to the United States Coast Guard to lift the sanctions it placed on some jetties and terminals which were found deficient two years ago in complying with the Code.
The commitment and appeal were made by the Minister of Transportation, Chibuike Rotimi Amaechi when he led a delegation to the United States Coasts Guard (USCG) head office in Washington DC.
The Minister expressed government's appreciation for the support of the USCG in implementing the ISPS code in Nigeria and assured the international shipping community that the country is committed to the full implementation of the code to safeguard the maritime domain.
He noted that since taking over the implementation of the ISPS code as the Designated Authority (DA) in Nigeria, the Nigerian Maritime Administration and Safety Agency (NIMASA) has performed creditably moving the compliance level from 9% in 2013 to 79.3% in 2016.
According to Amaechi, "Nigeria appreciates the efforts and support of the United States Government in encouraging a cordial bilateral relationship with Nigeria not only in the area of maritime security but also in other areas. I want to assure the US Coast Guard and indeed the international shipping community of Nigeria's commitment to the full implementation of the ISPS code to further institute a strict security regime in our maritime environment".
The Minister also requested the US government to revisit the Condition of Entry (COE) earlier placed on vessels that have called some port facilities in Nigeria which were not compliant with the code saying that over 80% of those facilities have since complied with the code and needed to be removed for the COE list.
Receiving the delegation, the Assistant Commandant of the USCG, Rear Admiral Paul Thomas expressed his country's determination to continue to support Nigeria in its goal of full implementation of the ISPS code.
Thomas who oversees the USCG directorates of Inspection and Compliance as well as Marine Transport Systems commended Nigeria for its progress in the ISPS code implementation so far saying the visit to the US was aimed at exposing the delegation to some of the strategies adopted by America to successfully implement the code.
The visit which was at the invitation of the USCG is expected to serve as an exchange programme for the Nigerian delegation exposing them to the implementation strategies of the United States so as to replicate same in Nigeria.
The Minister was accompanied on the visit by the Director, Maritime Safety and Security in the ministry, Danjuma Dauda, the Director General of NIMASA, Dakuku Peterside and Managing Director of Nigerian Ports Authority (NPA), Hadiza Usman.
Culled from: http://shipsandports.com.ng/nigeria-begs-us-to-lift-sanction-on-jetties-over-non-compliance-to-isps-code/
Customs pushes for total ban on rice importation from 2017
October 11th, 2016
The Nigeria Customs Service (NCS) is advocating a total ban on rice importation into Nigeria from 2017.
The Customs also reaffirmed that importation of rice remains banned through the land borders, although rice imports through the ports are still allowed subject to payment of extant tariffs.
The NCS in a statement yesterday by its Public Relations Officer, Deputy-Comptroller Wale Adeniyi, said the Customs is confident that Nigerian rice producers will fill the existing gaps in the supply of the product by next year.
He, however, dispelled the rumour that Customs has reversed the ban on rice importation through the land borders.
He said: "We like to reiterate the position that importation of rice remains banned through our land borders, and we have the commitment of partner government agencies and stakeholders to enforce this restriction. While this restriction is in force, rice imports through the ports are still allowed subject to payment of extant charges.
"It is equally important to restate the confidence of the Nigeria Customs Service in the ability of Nigerian rice Producers to fill the existing sufficiency gaps in the supply of the product.
"The Service has noted with satisfaction the ongoing rice revolution undertaken by many state governments, and strategic interventions by federal government agencies. The Service is convinced that the bumper harvests expected from these efforts will address the supply gap in 2017.
"It is our belief that continuous waste of scarce forex on a commodity that can be produced locally makes no economic sense, most especially at a period of recession.
"The Service will, therefore, advocate a total ban on rice importation into Nigeria with effect from 2017," he said.
He noted that the false publications that resurfaced this weekend were being attributed to a press interview granted in October 2015.
"We strongly suspect that some powerful forces behind rice smuggling are at work, recycling an old report under a different circumstance to create confusion. We urge Nigerians to watch out for similar antics as the firm stand on Rice smuggling will pitch their selfish interest against our national interest," he said.
Culled from: http://guardian.ng/business-services/customs-pushes-for-total-ban-on-rice-importation-from-2017/
Ambode Revs up $2.3bn Badagry Deep Sea Port Project
October 10th, 2016
Governor Akinwunmi Ambode of Lagos State on Thursday met with representatives of APM Terminals to advance the development of the Badagry Deep Sea Port project, restating his administration's key strategic imperative to creating a friendly environment to encourage private sector participation in driving economic development in the State.
At the meeting which took place in London, United Kingdom, Ambode said the Badagry Deep Sea Port Project with an estimated investment of over $2.3billion would address the infrastructure enhancement and urban renewal agenda of the State.
Ambode, who expressed appreciation on the resolve of the investors to stay the course with the project, said the facility on completion would generate over 500,000 direct and indirect jobs.
He assured that government would spare nothing to see the project to realization, while pledging that the interests of the host communities within the location of the project will be protected.
He said the Badagry Deep Sea Port, on completion, will be the biggest in the African continent as it is expected to sit on a land space of over 1000 hectares.
Speaking on behalf of APM Terminals, Head of Africa, Peter Volkjaer Jorgensen said the Group was strongly committed to partnering the State Government on the project.
The meeting had in attendance Country Manager, APM Terminal, Mr. David Skov; Chairman APM Terminal Apapa, Chief Ernest Shonekan; Head of Africa, APM Terminal, Peter Volkjaer Jorgensen; Chairman, Supreme Offshore Ltd, Mr. Chidi Ofong; Mr. Koye Edu; Lagos State Commissioner for Commerce, Mr. Rotimi Ogunleye; Permanent Secretary, Lagos Global, Mr. Olajide Bashorun and Country Senior Partner, PricewaterhouseCoopers, Mr. Uyi Akpata.
It would be recalled that Ambode, back in July 16, 2015, inspected the Badagry Deep Sea Port project where he assured that the state government would give adequate support to the initiative just as he assured the communities within the location of the project that their interests will be protected
He said the Deep Sea Port, on completion, would be the biggest in the African continent.
The governor said: "The land space for the Deep Sea Port is over 1000 hectares of which we have just been told that there's going to be a free trade zone and then a container terminal that we are going to have here.
"We already know that the investors have done the best they can. We have Mearsk in the bouquet of investors who have signed on to this project and what that means for us is that we are going to have the largest cargo container port in Africa, situated in Badagry.
"That means a lot of us in terms of employment. It means a lot for us also in terms of new settlement like it has been said, we hope that in the next two months we're coming to start this project here".
He said that he personally came to see the project, stating that it was part of his promise aimed at bringing development to the communities in that axis.
Harping on the need for compensation, he said that the state government would ensure that the 12 communities expected to be resettled as a result of the project are duly compensated.
"Like you have also been told, this project is 500 metres away from the ‘Point of No Return' which is also a tourist attraction for us, So, we have decided to protect that particular place to make sure that tourism is also complemented in this project.
"With a Deep Sea Port project like this, it means that there would be new settlements in Badagry, new towns and the standard of living is positively affected by this kind of project".
Culled from: http://www.thisdaylive.com/index.php/2016/10/08/ambode-revs-up-2-3bn-badagry-deep-sea-port-project/
Kachikwu: Nigeria Will Soon Close $4bn Investment Deal with China
October 6th, 2016
The Minister of State for Petroleum Resources, Dr. Ibe Kachikwu, has said that Nigeria will soon close the deal on a $3 billion to $4 billion loan from China that will be channelled towards the provision of infrastructure in the oil and gas sector.
Kachikwu made the disclosure at the end of the Federal Executive Council (FEC) meeting held in the State House, Abuja wednesday, adding that the loan was a fallout of the July roadshow held by the petroleum ministry and the Nigerian National Petroleum Corporation (NNPC) in China.
Briefing State House reporters alongside the Ministers of Information and Culture, Lai Mohammed; Interior, Abdurahman Danbazzau; and Power, Works and Housing, Babatunde Fashola, Kachikwu also revealed that over 40 Chinese investors would be visiting Nigeria by the end of the month, explaining that the memoranda of understanding (MoUs) signed during the road show generally have a gestation period of about one year, as both countries set up their teams on a bilateral basis to look at specific areas of investment interests.
He said: "Generally, when you have a memorandum of understanding, the gestation period takes over a year, because after you get your MoUs signed you have to set up teams from both countries on a bilateral basis.
"Then begin to look specifically at the areas you pledged; what are the business incentives, the terms, and whether to invest.
"That is still work in progress, but we are having a team of over 40 Chinese investors, members of some of those bodies with which we signed MoUs that will be visiting Nigeria by the end of this month.
"We are also setting up a full inter-ministerial panel that will be deliberating with them for each of those sectoral investments.
"I will say that the target we had while going to China was to raise $40 billion, which is the total cost of our infrastructure gap for the oil industry but we had commitments for about $75.6 billion, $69 billion of which were NNPC and government-related potential investments and loans, and the rest directly to the private sector. If we get even 20 per cent of that, that will be a major achievement for us.
"We have a one-year period to work on these, and we expect that some will come earlier. But there are some facility lines that are almost readily available close to about $3 or $4 billion, but the investment packages will take us time.
"I realise that this is different from the pledges that were made when the president visited China which was an all African-type front basis, this is completely separate.
"I know that that fund on the all African basis, which is roughly about $60-$70 billion, we just realised the enormity of the sort of success that the roadshow had.
"So a lot more work is still in the pipeline and how we would now crystalise this into actual investments, but we are encouraged by what we are receiving in terms of the distinction and the contacts. Hopefully, by the end of the month, when this 40-man team comes, we would be able to make substantial progress."
Last July, Kachikwu led a roadshow to China to attract investments to close the infrastructure gap in Nigeria's oil and gas sector.
The management of NNPC at the end of the roadshow announced the signing of MoUs with Chinese companies worth over $50 billion for infrastructure development.
The corporation had listed companies involved in the deal to include China North Industries Corporation (NORINCO Group), China Cinda Asset Management Company Limited (CINDA), China National Offshore Oil Corporation (CNOOC), China Petroleum & Chemical Corporation/Addax Petroleum (SINOPEC/ADDAX), and International Chamber of Commerce/ China's National Development and Reform Commission (ICC-NDRC), among others.
Kachikwu also said FEC approved the resuscitation of the National Council on Hydrocarbon, as part of efforts to foster peace in the volatile Niger Delta region.
Kachikwu said the council would consist of stakeholders from oil producing areas, with a mandate to deliberate on the challenges facing the oil sector and on proffering solutions.
He explained that the council would, as part of its functions, undertake the continuous review of policies in the oil minerals sector in relation to how they affect the indigenes of oil producing communities, especially with respect to the militancy in the region by creating forums where everyone converges to discuss the problems affecting all participants in the sector.
FEC also approved a N3.5 billion contract for the procurement of 350 operational vehicles for the Nigerian Prisons Service (NPS).
Dambazzau, who spoke on the approval granted his ministry, said the approval to buy the vehicles was part of the logistics being put in place to de-congest prisons nationwide by making it easier for the prison service to convey inmates to and from courts during their trial without delays and as and when due.
Dambazzau also said that the procurement of the vehicles was part of the processes being undertaken by the ministry in collaboration with the judiciary and police to strengthen the criminal justice system in the country, which he said had been ineffective and unfavourable to inmates.
According to him, there are currently 65,000 inmates in Nigerian prisons, of which 70 per cent were awaiting trial in the 5,022 courts situated across the country.
He said the absence of operational vehicles in the past had made it difficult to convey awaiting trial inmates to courts, resulting in prolonged trials and overcrowding in prisons.
"We are trying to see how we can reduce the number of inmates awaiting trial. But the Criminal Justice Act of 2015 has also made provisions for alternatives to sentencing, otherwise known as non-custodian sentencing.
"The courts can now use that rather than sending the individual to prison, depending on the crime committed, or apply other means of dealing with such cases," he said.
In his briefing, Fashola painted a picture of gloom regarding the state of road construction and rehabilitation nationwide, citing limited resources.
He said government can only undertake repairs and reconstruction of critical roads due to the limited resources allocated for roads in the 2016 budget.
He revealed that the liabilities and indebtedness of his ministry on road projects stood at N1.5 trillion while a paltry N200 billion was made available for road projects in the budget.
As a result of this, he said government had to prioritise work only on roads that are used for conveying petroleum products, food and high vehicular traffic.
He said the government inherited contracts amounting to N2.2 trillion already awarded for road construction.
According to him, contractors are owed about N1.5 trillion for work they had already done, adding that with the limited budget, government had to prioritise.
He said: "The budget that we have for the three ministries that I superintend is in the region of N400 plus billion, of which over N200 billion was dedicated to roads across the country.
"So that is the deficit that we have to deal with and in making these choices. We then have to deal not with roads that necessarily bother us but roads that carry the heaviest traffic.
"First is to deal with roads that evacuate our energy needs because without energy, the nation will grind to a halt - those roads that evacuate energy from the south to the north, like fuel in particular.
"Second, those roads that evacuate our nourishment and food supply, like our millet, tomatoes and yam from the north to the south. We also have to ensure that the transportation business does not die.
"So when you are hearing Lagos-Ibadan, it is not Lagos- Ibadan itself, it is Lagos-Ibadan that is critical to keep the economy of this country going.
"That is where importers from the north or south move goods, because the bulk of imported cargo comes from the Apapa and Tincan ports. That is where fuel is largely discharged for the country from the tank farms in Apapa and hauled to the furthermost parts of the country.
"So we are in a situation where we have to make choices and this is how a family makes choices - what gives the greatest good to possibly the greatest number with the most limited resources.
"So we are limited by resources but trying to ensure that each geo-political zone is not left behind. We are also trying to ensure that we are able to keep the economy of the nation going."
Fashola was however hopeful that in 2017, his ministry would move on to the next phase. "We have provided a three-year plan to begin to address the roads, but this is subject to the appropriation we receive and once a road is not appropriated for you cannot spend money on it, because it is a violation of the laws of this country and you will be penalised for it and I won't breach the law.
"So I am limited by what I am authorised to do when appropriation comes."
With respect to the power sector, Fashola said FEC approved the procurement of 150 megavolts transformers for three transmission sub-stations located in Osogbo, Shiroro and Ondo.
He said the acquisition of the transformers, which he placed at a cost of over a billion naira, would reinforce, expand and maintain the current transmission capacity as electricity generation increases.
Culled from: http://www.thisdaylive.com/index.php/2016/10/06/kachikwu-nigeria-will-soon-close-4bn-investment-deal-with-china/
Corruption warning on Nigeria currency policy
October 3rd, 2016
Nigerian bankers, businesspeople and foreign investors have warned that the government's management of its currency system is fuelling corruption, in another blow to market confidence in Africa's top oil producer.
The Nigerian central bank raised concern when it unveiled new unorthodox currency policies to bank executives at a meeting last week, instead of formally announcing the measures.
The banks were given detailed instructions on what they could do with the dollars they receive from the central bank at the official exchange rate: who they can sell it to, when, and at what price.
Bowing to pressure as the worst economic crisis in decades deepened, Nigeria switched three months ago to a "purely market-driven" currency system - abandoning its bid to hold the naira at an exchange rate seen as unrealistic given that the price of oil, the country's main exporter earner, had collapsed.
But hopes that the new regime would ease the severe dollar shortages choking businesses have been dashed again. The central bank is once again defending the naira, say bankers and investors.
This is pushing yet more demand into the flourishing parallel market. The naira fell to its lowest-ever level of 490 to the dollar last week before settling on Friday at 475, still nearly 35 per cent weaker than the official rate. The ‘spread' has made currency trading the easiest way for Nigeria-watchers to make money in tough times.
The ‘fixing' of the currency market undermines the president's agenda because it fosters a "corruption scam", said the head of a Nigerian bank who spoke on condition of anonymity.
Lamido Sanusi, a former central bank governor, argues that the current system allows individuals to "rake in billions of naira" while most Nigerians suffer from soaring inflation and other financial hardships.
The lucky few allocated dollars at the official rate stand to double their cash immediately by selling it on the parallel market.
The ‘FX racket', as it is known in Lagos, comes at the expense of investment in ailing sectors like manufacturing, which the government hopes to boost to pull Nigeria out of its first recession in 25 years. It also adds credence to the concerns of the International Monetary Fund and other institutions that some of the government's policies are worsening the fiscal crisis.
The central bank did not respond to phone requests for comment on Friday. Governor Godwin Emefiele has not granted interviews to international media this year.
"The most astonishing point is how openly everyone on the ground is willing to talk about it," said a foreign investor who visited Lagos last week. The central bank's handling of the dollar shortage is the main issue frustrating the local business community, he said.
"The government is constantly creating opportunities for windfalls and avenues for quick gain, and they are wondering why nobody is investing in anything real," said Atedo Peterside, a former top banker.
Local and foreign investors are "spooked", he said, and the country remains deprived of foreign capital with external reserves at dangerously low levels.
"Nigeria managed to take the full pain of a devaluation - namely the repricing of imports - without actually achieving any of the potential gains," said Jan Dehn, head of research at Ashmore Investment.
It is now "almost unique among emerging market countries" for "making mistake after mistake since oil prices declined," he said.
Culled from: http://www.oyibosonline.com/corruption-warning-on-nigeria-currency-policy/
Multiple government agencies cause confusion at ports
September 21st, 2016
The overzealous attitude of officials of numerous government agencies at the Nigerian ports has become a source of worry, as the National Association of Government Approved Freight Forwarders (NAGAFF), berates duplication of regulations and clash of interests by the agencies.
The Freight forwarders, in a statement made available to The Guardian alleged that the agencies operate outside their mandates as stipulated in the various Acts establishing them, thereby frustrating the importers and clearing agents.
The statement signed by the Secretary General, NAGAF, Arthur Igwilo said the maritime industry desperately needs sanity especially now that revenue from crude oil had dropped drastically.The group applauded the Standard Operating Procedure and Port Services Support Portal introduced by the Federal Government recently, aimed at entrenching standardisation in port operations in Nigeria.
It stated that: "Over the years, people just find their ways into the ports under different guises and start extorting money from port users. For example, when a vessel arrives, one finds out that five or more agencies will be forcing their ways into the vessel, even to the chagrin of the crew members whose vessel may have berthed at other organised ports before Nigeria.
"Whereas, there were supposed to be only two agencies authorised internationally to go onboard. Nigeria indeed, is always seen as a banana republic by the international community because of the way we run our socio-economic and political lives.
"The Nigeria Customs Service arbitrarily gives itself revenue targets officially and unofficially. The official revenue targets are declared
publicly, but unofficial revenue targets are for their personal purses," it alleged.
NAGAF stated that: "Other agencies and parastatals of government in the ports like Standards Organisation of Nigeria (SON), National Agency for Food and Drug Administration and Control (NAFDAC) among others, operate outside their mandates as stipulated in the various acts establishing them. Infact, it has been a whole lot of confusion in the ports and their environment.
"This ensuing confusion over the years have been capitalised on, to rip off port users, consequently, this makes Nigerian ports most expensive and unfriendly in sub Saharan Africa," it stated.
The group however added that huge sums of money have been lost both by governments and individuals due to the insidious actions of the officials, adding that standardisation is the panacea to the ongoing confusion in the ports.
"Standardisation expectedly shall engender sanity as experienced in other economies and at the same time eliminate corruption and its tendencies in port operation. It should be applied in every facet of port operation," it stated.Besides, it alleged that different portals are being created by different agencies and parastatals.
"For example, the Standards Organisation of Nigeria (SON) has their exclusive portal that is being used to implement guidelines on importing new goods tagged: Standards Organisation of Nigeria Conformity Assessment Programme (SONCAP). It verifies the conformity of all imported new goods, enforces their standards except those items that appear in excluded product list. Another example is Nigeria Customs Service (NCS). They have their portal called, the Nigeria Integrated Customs Information System (NICIS). It is utilized for PAAR issuance, cargo identification, interface with SON, shipping companies, terminal operators among others to achieve seamless cargo delivery.
"We are aware that more agencies are establishing their portals for their services. Therefore, we advocate that at the fullness of time an integrated/ central portal should be established to coordinate various portals. This will achieve harmony and standardisation in the port operation. Indeed, it is becoming clearer that the veil in port operation is being opened. The rate of dynamism in ports is being enhanced," it stated.
Culled from: http://guardian.ng/business-services/maritime/multiple-government-agencies-cause-confusion-at-ports/
Truck owners threaten strike over bad port access road
September 21st, 2016
The Association of Maritime Truck Owners (AMATO) has threatened to withdraw its members' trucks from the port by September 26th if nothing significant is done to fix the dilapidated port access road.
Chairman of the Association, Chief Remi Ogungbemi said in a letter addressed to the Managing Director of Nigerian Port Authority (NPA), a copy of which was made available to SHIPS & PORTS DAILY yesterday that the deplorable state of the port access road was responsible for the falling and severe damages of their trucks on a daily basis; a situation he said is creating financial difficulties for the operators.
"In view of the above, if nothing significant is done on the road on or before 26th of September 2016, we shall withdraw the services of our trucks from both Apapa and Tin Can ports until the road is safe for movement of vehicles and cargoes.
"In view of the dwindling price of crude oil being the nation's major source of revenue, we opined that the port should be another survival hub by which the nation could get out of the present recession.
"We believe that the road leading to the gateway to the nation's economy supposed to be one of the best in the country; it is inexplicable that the roads leading to Apapa and Tin Can are being neglected for so long.
"It should have been appropriate for agencies concerned to pay crucial attention to the ports roads by embarking on total rehabilitation," Ogungbemi said.
Culled from: http://shipsandports.com.ng/truck-owners-threaten-strike-over-bad-port-access-road/
FG to Raise $2bn from Concession of Lagos-Kano/Port Harcourt- Maiduguri Rail
September 20th, 2016
The federal government plans to raise $2 billion through the concession of the existing Lagos-Kano/Port-Harcourt-Maiduguri rail line, the Minister of Budget and National Planning, Senator Udoma Udo Udoma, has said.
He spoke in Abuja just as the Minister of Finance, Mrs Kemi Adeosun, called for the lowering of interest rate to boost economic growth.
Udoma, who also explained that the federal government had released N400 billion out of the budgeted N1.8 trillion capital vote for the year, said discussions were on with General Electric (GE) to take over the rail line as part of the efforts to multiply revenue sources to fund the budget.
"We are working on all fronts at the same time. One is to get oil production back - it is very important. Two, is the asset sales, concession and all that. We are discussing with General Electric, and I will give that as a practical example," Udoma said in a document released to THISDAY monday, adding that the firm had already committed to bring in $2 billion into the concession arrangement.
He said that the concessionaire would take over the rail lines, revamp them and build coaches in the country, explaining that the process of getting the thing through would however take some time.
"We have to wait for the various government agencies because there are certain procedures we have to go through. This is why we met and said, is there a way we can fast track some of these things? Because we need the money today, not in three or four months' time,'' Udoma explained.
The minister said the recurrent budget, as contained in the 2016 Appropriation Act, had been "virtually fully'' implemented.
"As far as the recurrent is concerned, the 2016 budget has been virtually fully implemented. The emoluments have been paid in full. We've released all the money. At the federal level, all salaries have been released. We have met that in full,'' Udoma stated.
He added: "We have also met all debt service in full. With regards to overheads, we have not met that in full but we are almost there. The problem has been capital. In the capital budget, we planned to spend about N1.8 trillion, but we've only spent about N400 billion.
"So, we have not been able to meet up with the level of capital releases. The reason for that is that if you look at the first six months of the year, the revenue performance was N1 trillion less than we projected.''
The minister added that given that rate, it meant that at the end of the year, there would be N2 trillion less revenue than the country expected, saying there is no economy and person that could manage that without being where the country is tuesday.
On how soon Nigerians are likely to see some activities against the background that many analysts at the Economic (Ministerial) Retreat said recently that the federal government should pump a lot of money into the economy and see some busy activities happening, Udoma said the federal government completely agreed with that, stating that the Economic Management Team had been meeting for the last months over the fiscal stimulus to see how it could raise additional revenues.
He added: "We need to raise additional revenues. To release more money, you need to get the money first. So, we have a fiscal stimulus plan, which we have been developing over the last months. We intend to do a number of things. We are looking at assets sales, concession, and getting advance payments from licensing rounds and all that.
"We are targeting to raise between $10 billion to $15 billion and we have started that process. Why are we looking for dollars? It is because what we need to charge this economy is actually foreign currency. It is foreign currency shortage that is really responsible for where we are today. So, we have to look for foreign currency. We have a plan already.
"We have prepared a bill because we want to fast track some of these processes in order to be able to get the money from concession and all that. There are two sources of getting these additional funds. One is getting more crude oil production. At that time, we still thought we will be able get more oil production and get back to 2.2mbpd.''
The minister further stated that the federal government was also looking at a strategy to contain the militant activities, adding that the government didn't expect it to be as prolonged as it has been.
He said that the federal government, with the help of all stakeholders in the region, is still working to reduce the militant activity through dialogue and other strategy.
"If we can reduce them, we can take oil production immediately to 2.2mbpd. If we do that, we will be able to pump this additional money into the economy,'' he stated.
On whether Nigeria is still producing around 1.1m barrel per day, the minister said it is now moving up because Qua Iboe Terminal had started operating.
Udoma also made some clarifications on the monies recovered and lodged in the Treasury Single Account (TSA) and looted funds recovered by the Economic and Financial Crimes Commission (EFCC).
"On the TSA, what we talk about is a flow. It is not that the TSA has recovered a surplus. The TSA is a mechanism for making sure that all payments go through a central point so they can be tracked, but those funds belong to various agencies and they end up being paid into the national treasury,'' he stated.
"So, the issue of maybe N3 trillion lying idle in TSA is not correct. The money that has been flowing through, the cumulative amount is what is being spoken about. That money is not lying there idle for us to take. This has been clarified so many times. The Minister of Finance has said so on several occasions and I can't understand why the issue isn't still clear,'' he said.
On the funds recovered by the EFCC, he said that until the legal processes were completed, the federal government could not spend them.
Adeosun seeks interest rate reduction
Meanwhile, as the Central Bank of Nigeria's (CBN) monetary policy committee (MPC) members are set to announce the outcome of their two-day meeting today, the Minister of Finance, Adeosun, has expressed her preference for a reduction of the benchmark Monetary Policy Rate (MPR).
The minister, who said this while speaking on CNBC Africa, argued that the focus of policy makers in the country at this time should be on stimulating growth.
The Nigerian economy is in recession. The NBS recently revealed that the country's gross domestic product (GDP) contracted by 2.06 per cent in the second quarter of 2016, compared to the negative growth of 0.36 per cent recorded in the first quarter of 2016.
"I would rather seek growth, we can manage inflation - let's stimulate the economy, we need lower interest rates," she said.
The finance minister wants the central bank to lower interest rates so that the government could borrow domestically to boost the economy, which is stuck in recession, without increasing its debt-servicing costs.
Adeosun said she was working with the Debt Management Office (DMO), Nigeria Sovereign Investment Authority (NSIA) and the pension industry to issue an infrastructure bond to raise money for road and housing projects, although she did not elaborate.
She said she wanted the central bank to reconsider its July interest rate hike, which it implemented to help support the naira and attract foreign investment inflows.
"We need lower interest rates because when we are borrowing and interest rates go up, it increases our cost of debt service and it reduces the amount of money that is available to spend on capital projects," she told CNBC Africa.
"The attempt was to manage inflation and the trade off for the economy right now is what a bigger problem is: Is it growth or inflation? For me it is growth. I would rather seek growth. We can manage inflation. I think for us at the moment in the Nigerian economy, growth is the most important thing," she said.
Adeosun said the government was working with the parliament to cut procurement timelines to get contractors back to work and inject money into the economy.
Nigeria has said before that it plans to set up a $25 billion infrastructure fund to invest in the transport and energy sectors.
She said some adjustment was needed to narrow the spread between the official and black market currency rates, which is running at 25 per cent after the central bank floated the naira.
"We still need to make some necessary adjustment to ensure that the spread is narrowed so that we have true price discovery," she said.
At the last MPC meeting held in July, the Monetary Policy Rate (MPR) was raised to 14 per cent from 12 per cent, and the Cash Reserve Ratio (CRR) and Liquidity Ratio (LR) were both retained at 22.50 per cent and 30 per cent respectively.
The spot rate of the naira appreciated marginally to N307.25 to the dollar on the interbank forex market yesterday, up from the N308.69 to the dollar it closed last Friday. But on the parallel market, the naira remained unchanged at N425 to the dollar monday.
NBS Updates Capital Import Figures
Nigeria's total value of capital imported into the country was estimated at $1.04 billion in the second quarter of the year (Q2 2016), representing an increase of 46.58 per cent compared to $710 million in the previous quarter, according to updated figures by the National Bureau of Statistics (NBS), which were released monday.
However, the new figures represented a decline of 60.91 per cent relative to the corresponding quarter of 2015, and contrasted with the preliminary estimate which was based on the first two months of the quarter, which indicated a quarter-on-quarter decrease of 8.98 per cent.
The release by the NBS came just as the Minister of Finance, Mrs Kemi Adeosun, called for reduction in interest rate to boost growth.
The updated version supersedes the preliminary report published in which capital importation for June 2016 was only an estimation as figures were not readily available then.
Nevertheless, the NBS said it deemed it necessary to provide an update having laid hands on the real figures for June, which appeared to reset the calculations that earlier put total capital importation at about $647.1 million for Q2.
The NBS said a sharp increase in June outweighed the low values recorded in April and May as the level of capital imported in June was the highest monthly value in 2016.
It added that the value of capital importation rose to $610.77 million in June, more than the previous three months combined due to a surge in loans, and helped by a significant change in exchange rate policy as the Central Bank of Nigeria (CBN) opted to move to a more flexible regime.
Specifically, the NBS said analysis showed that "the sharp rise in June in particular and Q2 2016 over Q1 2016 in general was due to a 115.12% quarter-on-quarter and 239.48% year-on-year rise in loans predominantly to the oil and gas (862.02% quarter-on-quarter rise and 4,023.25% rise year on year) and telecoms sectors (783.25% quarter on quarter and 14.22% rise year on year)".
In May, the value of capital imported was the lowest since August 2009, it added.
According to the statistical agency, quarter on quarter, the foreign direct investment (FDI), portfolio investment and other investments all recorded increases, with other investments recording an increase of 96.09 per cent and accounting for $520.57 million, or 49.95 per cent of the total share of capital imported relative to the previous quarter.
Portfolio investment, which was the second largest component recorded an increase of 24.45 per cent and accounted for 337.31 million, or 32.37 per cent of total capital imported.
Furthermore, portfolio investment was dominated by equity, which accounted for 82.95 per cent, a slightly lower share than a year previously when the share was 84.56 per cent but higher than in the previous quarter when it accounted for 74.41 per cent.
On the other hand, FDI recorded an increase of 5.64 per cent in the period under review and accounted for a total of $184.29 million, representing 17.68 per cent of the total figure. Equity accounted for the vast majority of FDI, leaving only $0.08 million as capital imported in the form of other capital.
Providing a sectoral breakdown of capital imported in Q2, the NBS stated that the value of share capital imported into the country was $347.99 million, a significant increase relative to the first quarter of 42.89 per cent. Year on year, while share capital declined by 72.83 per cent.
It said: "Despite the large quarterly increase, the proportion of total imported capital that shares accounted for in the second quarter was 33.39%, slightly lower than the proportion of 34.25% recorded in the first quarter. It is also less than half the proportion it accounted for in the same quarter of 2015, which is 70.41%. Nevertheless, share capital still accounts for a larger proportion of total imported capital than any individual sector.
"For the first time on record, the sector to import the largest amount of capital was Oil and Gas, which accounted for $200.39 million, or 19.23% of the total. In all previous quarters, the sector to import the most capital had been either Banking, Financing, Production or Telecommunications. The Oil and Gas sector is characterised by occasional high levels of capital importation, interspersed with periods in which very little capital is imported. This sector imported $20.83 million in the previous quarter, and only $4.86 million a year previously."
Continuing, it said: "The sector to import the second largest amount of capital was Servicing, which imported capital worth $119.75 million in the second quarter, or 11.49% of the total. This represents a large increase relative to both the same quarter the previous year when capital worth $12.83 million was imported, and the previous quarter in which the value was $55.05 million.
"There were five sectors to record no capital importation in the second quarter of 2016 (Marketing, Hotels, Tanning, Transport and Weaving), one more than in the previous quarter. In addition, half of the 20 sectors recorded either a decline in the amount of capital imported relative to the previous quarter, or no change.
"The largest fall was in the Electrical sector, which recorded $57.31 million less. By contrast, Oil and Gas recorded the largest increase, and imported $179.56 million more than in the previous quarter, but Telecommunications also recorded a notable increase of $105.27 million, from $13.44 million in the first quarter, to $118.71 million in the second quarter of 2016."
Culled from: http://www.thisdaylive.com/index.php/2016/09/20/fg-to-raise-2bn-from-concession-of-lagos-kanoport-harcourt-maiduguri-rail/?utm_source=twitterfeed&utm_medium=facebook
NPA boss appoints new Port Managers
September 16th, 2016
The Managing Director of Nigerian Ports Authority (NPA), Hadiza Bala Usman has approved the appointment of new Port Managers for the six major seaports across the country.
An internal memorandum dated 14th September 2016 emanating from the NPA Managing Director's office titled "DISPOSITION" and obtained exclusively by SHIPS & PORTS DAILY shows that only one of the six old Port Managers was retained while the others were redeployed to the NPA headquarters and zones.
The new Port Managers are Mrs Aisha Ali-Ibrahim (Lagos Port Complex, Apapa); Noah Mathew Alaba (Tin Can Island Port); Mrs Olufunmilayo Olotu (Calabar Port); Okeke Simeon Okeke (Delta Port) and Alhassan Ismaila Abubakar (Onne Port). Umar Abubaar Garba is the only old Port Manager retained under the new disposition but was redeployed from Delta Port to Rivers Port.
The former Port Manager of Lagos Port Complex, Apapa, Ezeoke Eunice Ngozi was redeployed to Western Ports as Assistant General Manager (Operations) while the former Tin Can Island Port Manager, Babatunde Longe moves to NPA headquarters as AGM Operations. The former Port Manager of Rivers Port, Abdulrahman Lamina also moves to NPA headquarters as AGM, Commercial while the former Calabar Port Manager, Emgr. Ogundele Oluseyi moves to Eastern Ports as AGM, Utilities.
Durowaiye Ayodele, who until the new disposition was in charge of Onne Port, was directed to report to the General Manager, Western Ports, Lagos "for duty".
The new disposition, which takes immediate effect, was signed by Usman.
Culled from: http://shipsandports.com.ng/exclusive-npa-boss-appoints-new-port-managers/?utm_source=feedburner&utm_medium=email&utm_campaign=Feed%3A+Shipsandportscom+%28shipsandports.com.ng%29
Nigeria needs $2.5bn a week to import goods – Ogbeh
September 15th, 2016
The Minister of Agriculture and Rural Development, Chief Audu Ogbeh, on Wednesday in Abuja said Nigerian businessmen demanded 2.5 billion dollars (about N492 billion) a week for importation of goods and services into the country.
Ogbeh made this known in a meeting with officials of VICAMPRO, an indigenous Agro Company investing in production of Irish potato in Abuja.
He said that the ministry was willing to support local investors with capacity to produce goods and save the country's foreign exchange. He said that the consumption of rice in the country was rising and that a lot of people were not aware that the rice had some degree of arsenic.
The minister said that consuming rice in large quantity on a regular basis was a bit of health risk, advising that it be substituted with potato.
"The volume of importation of virtually everything into this country is too much.
"The demand for dollars in this country as at today is 2.5 billion a week; this is the quantum of dollars Nigerians are asking for to import things.
"Since 1986, we began this habit of importing everything and doing virtually nothing at home to sustain ourselves; now, we do not have the dollars and people are very hungry.
"This day was coming anyway, no matter who was in power; we have the most ridiculous method of devaluing our currency; every week, we auction the dollar and naira goes up.
"We sat and were hoping that by devaluation, we are going to arrive at eldorado; if we continue like this, it will be a thousand naira to a dollar," he said.
While commending the investor, Ogbeh said that any private sector effort that would develop local production of goods would be fully supported by the ministry.
"We should aggressively take the West African market; there is no reason why we should allow Irish potato from Ireland and France and Belgium into West Africa; it is the same story with onions.
"Under ECOWAS, at the level of government we are going to push for the greater part of the market for local investors," he stated, even as he urged VICAMPRO to process potato for use in hotels, saying that hotels in Nigeria imported processed potato from South Africa.
Earlier, the Chief Executive Officer of VICAMPRO, Michael Agbogo, said potato could bring value worth over one trillion naira into Nigeria annually if properly harnessed.
He said that potato was the fourth most important crop in the world and that a barrel of oil was an equivalent of 14 kilogrammes of potatoes.
According to Agbogo, while current price of crude oil will fetch the country about N16,000 per barrel, the equivalent in potato will fetch the country N39,000.
He said that in terms of value, potato had three times the value of crude oil, adding that it was a huge industry the country could get into.
Agbogo said that Egypt and Algeria were the leading potato producing countries in Africa, with Egypt producing four million tonnes annually from about 100,000 hectares of land.
He said that Nigeria, which had close to 500,000 hectares, was struggling to produce one million tonnes of potato per annum.
He described potato as a "unique crop" that could be cultivated three times in a year, including the dry season.
Agbogo said the produce could be grown in Plateau, Kaduna, Adamawa and a number of states across the country, adding that Nigeria should take advantage of the crop.
He said farmers in Germany and New Zealand made up to 80 tonnes per hectare while their Nigerian counterpart made less than five tonnes per hectare.
He, however, said that there were no seeds in the country and that the seed deficiency was close to 700,000 tonnes per season and two million tonnes per annum.
According to Agboro, the whole of the West African coast cannot grow Irish potato easily and the produce is being imported from South Africa, Belgium and The Netherlands.
Culled from: http://shipsandports.com.ng/nigeria-needs-2-5bn-a-week-to-import-goods-ogbeh/
Tariff suit: Shippers Council, concessionaires may settle out of court
September 8th, 2016
There are strong indications that the Nigerian Shippers Council, the nation's economic regulator for the seaport industry, and the Seaport Terminal Operators Association of Nigeria STOAN, the umbrella body for all concessionaires in all the seaports, may opt for out of court settlement.
Justice Ibrahim Buba of the Federal High Court sitting in Lagos had while delivering judgment in a suit instituted by the concessionaires and Association of Shipping Lines Agency ALSA, upheld the directive by the Council, ordering the duo to revert to the pre-2009 shipping charges.
The court had by that judgment also upheld the appointment of the council as the nation's port economic regulator, which the suit, which is currently at the Court of Appeal was to challenge in addition to ordering the shipping agencies and terminal operators to refund all monies illegally collected on container deposits.
Meanwhile, in what appeared a new turn of events, Executive Secretary/CEO of the council, Barrister Hassan Bello, while speaking at a one-day seminar on 10 years of port concession in Nigeria organised by the Maritime Association of Nigeria MARAN, in Lagos, hinted that the parties may likely opt for out of court settlement.
He noted that as a regulator, the Council is not supposed to be a ‘head master' rather than an unbiased umpire, who only seeks to protect the interest of both service providers and users with a view to maintaining an equilibrum.
According to him, globally, tariffs whether at the seaports or elsewhere should not be frozen but reviewed from time to time in line with economic trends and realities, arguing that in doing that due process must be followed and all relevant parties must be carried.
He also hinted that withdrawing the cases from court would pave the way for an amicable settlement of all conflicting issues.
According to him, this is in response to interventions by several well-meaning stakeholders on the need to seek a more amicable resolution of the issues that gave rise to the court case.
The NSC-boss also observed that the council is aware and conscious of the fact that most of the port stakeholders including terminal operators and shipping
companies are operating under very harsh socio-economic conditions.
"There have been interventions from many well-meaning stakeholders in the maritime industry including journalists and so we may need to settle the matter
out of courts", Bello said.
He also said: The port concessionaires and shipping companies have shown a great zeal in investing in Nigeria because we know that they have other alternatives".
While reviewing the post reform performance of the nation's seaports, he observed that the exercise has been a huge success, especially given the huge transformation that has taken place in most of the terminals.
He however took a swipe at many other terminal operators, who he said are resisting regulation and have not taken steps to develop and transform their terminals.
He also cited the instance of increased cargo throughput, reduction in turnaround time of vessels, massive private sector investments that have enhanced efficiency, but however said there is still room for improvement.
President of the association, Mrs. Ifenyinwa Obi, in her welcome address, observed that though there has been a level of efficiency and competitiveness of the nation's ports, the reduction in the cost of doing business, which was one of the cardinal objectives of the programme has yet to be achieved.
She however pledged that as the foremost journalists' group in the industry, MARAN would continue to play its agenda setting role.
Culled from: http://nationalmirroronline.net/new/tariff-suit-shippers-council-concessionaires-may-settle-out-of-court/
News reported September 2nd, 2016
Eid-el-Kabir: FG declares Monday, Tuesday public holidays
September 8th, 2016
The Federal Government has declared Monday and Tuesday, September 12 and September 13 as public holidays to mark the Eid-el-Kabir.
The Minister of Interior, Retired Lt.-Gen. Abdulrahman Dambazau, made the declaration on behalf of the Federal Government in a statement signed by the acting Permanent Secretary in the ministry, Muhammadu Maccido.
He enjoined all Muslims and Nigerians in general to support and join hands with President Muhammadu Buhari in his sustained efforts to diversify the economy and progressively accelerate the pace of economic recovery.
The minister said that government was aware of the current economic challenges the nation was facing.
He assured that that appropriate steps were being taken to address the challenges.
The minister said that the Federal Government was working to revitalise the agriculture sector and the "Youth Empowerment Scheme" in Information and Communication Technology (ICT).
He said that other areas of priority to government included the "The "Change Begins with Me", a value re-orientation programme, and other social intervention programmes as well as massive capital releases.
The minister expressed optimism that the current economic difficulties would soon be over, urging all to continue to support the government toward building a new formidable Nigeria.
He wished all Nigerians a happy Eid-el-Kabir celebration.
Culled from: http://vibes247.com/eid-el-kabir-fg-declares-monday-tuesday-public-holidays/
NPA insists on dollar charges for services
September 5th, 2016
The Nigerian Ports Authority (NPA) has insisted that it will continue collecting tariffs for its services in United States Dollars, as it has obligations that are also made in US dollars.
Responding to a call by shipping and maritime stakeholders on the NPA to stop charging in dollars, the managing director,Hadiza Bala Usman said since the Authority has obligations that are also in US dollars, it would be very difficult for to accept payments in naira.
Shipping and maritime industry stakeholders, including terminal operators who converged at an industry forum organized by the NPA on Friday in Lagos called on the organisation to stop charging tariffs in dollars and begin accepting naira, which is the country's legal tender, as this was making them pay so much and putting pressure on their dwindling earnings, in view of the current economic condition of the country.
They also insisted that NPA review its contractual agreements with the port terminal operators, stressing that the review ought to be done every two years.
"We have obligations that are also in US dollars, so it is very difficult for us to accept payments in naira. We noted the concern of foreign exchange right now. We know the country, but we are also mindful of our own obligations," said Usman.
She maintained that in its drive to recover debts from operators, the NPA would continue discussing with them and ensure that indebtedness in dollars to NPA are paid within the shortest period.
The NPA boss also reiterated the Authority's readiness to review port concession agreements after 10 years of seaport terminal concession.
Ship agents also urged the NPA to embark on a downward review of existing tariff regime. The forum was also an avenue to assess the activities to be embarked upon by the NPA, where the stakeholders also noted the decaying port infrastructure.
Usman however said the NPA would ensure that the tariff regime remains competitive, while prioritizing some of the issues raised by the stakeholders. She noted that with responsibilities to discharge in dollars, it was only natural that the Authority got paid for its services in dollars as well.
She said, "We believe that we need to prioritise some of issues raised by the operators and these include the need for us to review the concession agreement. They have noted that there is need for the agreement to be reviewed within two years of commencement and we have agreements of 10 years and these agreements have not been reviewed. So, we shall commence this review jointly with the ICRC and the BPE as the case may be.
"We wanted an expanded stakeholders consultation today, I am surprised the shippers were not invited but we will have additional engagement with all relevant stakeholders as we take decisions around tariff, but as I mentioned, our tariff regime should be very competitive looking at the role of Nigeria within West Africa and indeed the whole continent to ensure that we are competitive and indeed, that we priortise driving traffic into our ports."
The new NPA boss also disclosed that the Authority was diversifying on the various modes of traffic to Nigerian ports, with focus in agro and solid minerals export.
"We are looking at prioritising the export of agricultural produce in our respective terminals and we would also work on the solid minerals prioritizing that in our terminals. We believe that there's a need for NPA to look towards attracting more customers and clientele to the port," she noted.
Culled from: http://shipsandports.com.ng/npa-insists-on-dollar-charges-for-services/
Nigeria Slips into Recession, FG Attempts to Allay Concerns
September 1st, 2016
It's official: The Nigerian economy is in recession. The National Bureau of Statistics (NBS) yesterday confirmed the public's worst fears that the delayed response by the Muhammadu Buhari administration to the structural adjustments needed to avert an economic crisis has resulted in a contraction of the gross domestic product (GDP) growth rate of 2.06 per cent in the second quarter of 2016.
But instead of admitting that it had taken a number of missteps that could have averted the worst economic contraction in 29 years, the presidency and Ministry of Budget and National Planning attempted to put a spin on the damning economic data released by the NBS and engaged in a game of one-upmanship with the International Monetary Fund (IMF), assuring Nigerians that the economy will beat the fund's gloomy forecast of -1.8 per cent for the year.
Nigeria officially slipped into a recession based on NBS' GDP growth figures for Q2 2016, which showed that the economy contracted by 2.06 per cent, compared to the negative growth of 0.36 per cent recorded in Q1 2016.
Also, the increase in food prices and imported items pushed up the Consumer Price Index (CPI), which measures inflation, to 17.1 per cent in July, from 16.5 per cent in the month of June.
National unemployment rate also rose to 13.3 per cent in Q2 from 12.1 in Q1 2016, 10.4 per cent in Q4 2015, 9.9 per cent in Q3 2015, and from 8.2 per cent in Q2 2015.
However, labour productivity increased by 5.3 per cent to N637.5 in Q2 2016, from N605.27 in the previous quarter, the NBS stated wednesday.
According to the statistical agency, Q2 GDP declined by -2.06 per cent year-on-year in real terms, lower by 1.70 per cent from the growth rate of -0.36 per cent recorded in the preceding quarter, and also lower by 4.41 per cent compared to 2.35 per cent recorded in the corresponding quarter of 2015.
Quarter-on-quarter, real GDP increased by 0.82 per cent. But in normal terms, the GDP in Q2 stood at N23.48 trillion at basic prices, 2.73 per cent higher than estimates in Q2 2015 of N22.85 trillion and lower than the rate recorded in Q2 2015 by 2.44 per cent.
Daily oil production was estimated at 1.69 million barrels per day (mbpd), representing 0.42mbpd lower than Q1 production of 2.11mbpd and also lower than the corresponding quarter in 2015 by 0.36mbpd when output was recorded at 2.05mbpd.
The non-oil sector declined by 0.38 per cent in real terms in Q2, representing a growth rate of 0.20 per cent, which was lower than Q1 2016 estimate of -0.18 per cent, and 3.84 per cent lower from the corresponding quarter in 2015 of 3.46 per cent.
In real terms, the non-oil sector contributed 91.74 per cent to the nation's GDP, but contracted by 0.38 per cent in the quarter under review.
On the spike in inflation, energy and energy-related prices recorded the largest increases reflected in the core sub-index in the July inflation figure. The core sub-index increased by 16.9 per cent during the month, up by 0.7 percentage points from 16.2 per cent.
The highest increases were seen in the electricity, liquid fuel (kerosene), solid fuels, and fuels and lubricants for personal transport equipment groups.
Also, in the unemployment report for Q2 2016, the NBS said the nation's labour force population - those within the working age population willing, able and actively looking for work - increased to 79.9 million from 78.5 million in Q1 2016, representing an increase of 1.78 per cent in the labour force during the quarter.
The economically active population or working age population - persons within the ages of 15 and 64 - increased to 106.69 million in Q2 from 106 million in Q1, representing a 0.65 per cent rise over the previous quarter and a 3.02 per cent increase when compared to Q2 2015.
According to the NBS, the number of the unemployed in the labour force, increased by 1,158,700 persons, resulting in an increase in the national unemployment rate, while 26.06 million Nigerians were either unemployed or underemployed, compared to 24.5 million in Q1 and 22.6 million in Q4 2015.
Also, the total number of jobs added to the economy in Q1 2016 fell to 79,469 jobs, representing a sharp decline of 83.1 per cent (389,605) year-on-year and 84.1 per cent (420,056) from the previous quarter.
The NBS noted that the sharp decline in employment generation was strongly correlated to the weakening economic output within that period, where the Nigerian economy recorded a negative growth of -0.36 per cent.
It said of the 79,469 jobs created, 21,477 were in the formal sector and 61,026 in the informal sector. The public sector recorded a negative figure of -3.038 per cent in new jobs created within the period in review.
The NBC also released its report on Nigeria's foreign capital importation for Q2 2016, showing that it dropped by 8.98 per cent to $647.1 million, compared to $710 million in the previous quarter.
It was the second consecutive quarter to witness record-low levels of foreign capital importation into the economy and also the largest year-on-year decrease.
The NBS attributed the continuing decline in capital imported to the "the difficult period that the Nigerian economy is going through", adding that "the second quarter of 2016 saw the economy enter into the first recession during the rebased period (according to the technical definition of two consecutive periods of decline)".
It said: "This may suggest less profitable opportunities for investment. In addition, in the second quarter there was considerable uncertainty surrounding future exchange rate policy, which may have deterred investors.
"The naira was allowed to depreciate towards the end of the quarter. These factors were likely to have contributed to the record decline in capital importation."
According to the Foreign Capital Importation report for Q2, which was released by the NBS yesterday, portfolio investments recorded the largest decline of 88.76 per cent year-on-year, compared with declines of 37.00 per cent and 1.22 per cent for Foreign Direct and Other investments, respectively.
"Compared to the previous quarter, however, FDI recorded the largest decline of 23.75 per cent, compared with a decline of 9.49 per cent for portfolio investment and an increase of 1.24 per cent for other investments.
"As a result of these changes, other investments replaced portfolio as the largest component of capital importation, and accounted for 41.53 per cent, compared with shares of 37.91 per cent and 20.56 per cent for portfolio and FDI.
"In the same quarter of the previous year, portfolio investment accounted for 81.88 per cent of total investment, which highlights the fact that portfolio investment has been the hardest hit by recent economic events.
"This is possibly due to portfolio investment having a shorter term focus than other investment types," the NBS stated.
However, other investments were the largest component of imported capital and accounted for $268.77 million, or 41.53 per cent.
This was despite the fact that only one type of other investment was recorded during the quarter: Other Investment Loans.
The second largest component was portfolio investment, which accounted for $245.32 million, or 37.91 per cent.
Portfolio investment was dominated by equities, which accounted for 83.18 per cent, a slightly lower share than the year before (when the share was 84.56 per cent), but higher than in the previous quarter when it accounted for 74.41 per cent.
Despite the overall fall in portfolio investment of 9.49 per cent, portfolio equity investment increased by 1.18 per cent. The bulk of the fall was accounted for by portfolio money investment, which fell by $26.60 million, or 39.20 per cent, although investment in bonds fell to zero from $1.50 million in the previous quarter, and from $50.54 million in the second quarter of 2015.
The decline to zero in capital imported in the form of bonds was particularly striking when compared to the high of $1,000.28 million recorded in the third quarter of 2014, at which time Nigeria was included in the JP Morgan Emerging Markets Bond Index, the NBS noted.
FG Foresees Growth
Despite the gloomy economic data released by the NBS wednesday, the presidency said that the nation's economic outlook remained bright, irrespective of the contraction in the GDP growth rate recorded in the last quarter.
A statement issued in Abuja wednesday by the vice-president's media aide, Mr Laolu Akande, assured Nigerians that the second half of the year would be better.
Quoting the Special Adviser to the President, Economic Matters, Dr. Adeyemi Dipeolu, the statement said the recession would be short-lived, assuring Nigerians that many of the challenges faced in the first half either no longer existed or had begun to ease.
The statement noted that the data released by the NBS on the GDP growth rate, while confirming a temporary decline, also indicated hopeful expectations for the country's economic trajectory.
It also said that apart from the growth recorded in the agriculture and solid mineral sectors, the Nigerian economy, in response to the policies of the Muhammadu Buhari presidency, was doing better than the IMF's forecast, with clear indications that the second half of the year would be much better.
The statement said the administration would continue to work diligently on the economy and engage with all stakeholders to ensure that beneficial policy initiatives are actively pursued and the dividends delivered to the Nigerian people.
"The data from the National Bureau of Statistics showed that Gross Domestic Product declined by -2.06 per cent in the second quarter of 2016 on a year-on-year basis.
"A closer look at the data shows that this outcome was mostly due to the sharp contraction in the oil sector due to huge losses of crude oil production as a result of vandalism and sabotage.
"However, the rest of the Q2 data is beginning to tell a different story. There was growth in the agricultural and solid minerals sectors which are the areas in which the federal government has placed particular priority.
"Agriculture grew by 4.53 per cent in the second quarter of 2016, compared with 3.09 per cent in the first quarter. The metal ores sector showed similar performance with coal mining, quarrying and other minerals also showing positive growth of over 2.5 per cent.
"Notably also, the share of investments in GDP increased to its highest level since 2010, growing to about 17 per cent of GDP.
"The manufacturing sector though not yet truly out of the woods is beginning to show signs of recovery while the service sector similarly bears watching.
"The data also showed a reduction in imports and an increase in locally produced goods and services and this process will be maintained, although it will start off slowly in these initial stages before picking up later.
"The inflation rate remains high, but the good news is that the month-on-month rate of increase has fallen continuously over the past three months.
"Unemployment remains stubbornly high which is usually the case during growth slowdowns and for reasons of a structural nature.
"The picture that emerges, barring unforeseen shocks, is that the areas given priority by the federal government are beginning to respond with understandable time lags to policy initiatives.
"Indeed, as the emphasis on capital expenditure begins to yield results and the investment as a percentage of GDP increases, the growth rate of the Nigerian economy is likely to improve further.
"As these trends continue, the outlook for the rest of the year is that the Nigerian economy will beat the IMF forecast of -1.8 per cent for the full year 2016.
"The IMF had forecasted a growth of -1.8 per cent for 2016, however, the economy is performing better than the IMF estimates so far. For the half year, it stands at -1.23 per cent, compared to an average of -1.80 per cent expected for the full year by the IMF," the presidency stated.
In another statement by the Ministry of Budget and National Planning, the federal government said that as capital spending begins to yield positive results with investment/GDP ratio increasing, the GDP growth rate of the Nigerian economy would likely surpass the IMF's forecast of -1.8% for the full year 2016.
The ministry, in the statement yesterday, said a closer look at the data from the NBS revealed that the outcome was mostly due to a sharp contraction in the oil sector due to huge losses of crude oil production as a result of vandalism and sabotage.
But it said there was room for optimism that the recent commitment to stopping attacks on oil installations in the Niger Delta would help to resolve this situation, while also improving government revenues.
This, it added, would however be a temporary solution in the sense that it still promotes the weak economic structure of the past, which the budget ministry said manifests in two ways - the over reliance on crude oil and the country's economy being mainly consumption-driven with a high import propensity.
"With crude oil contributing 8-12 per cent of GDP and up to 50-53 per cent of the non-oil sector dependent on the oil sector, it is clear that the fortunes of up to 60 per cent of the Nigerian economy rest on a volatile sector.
"This shaky foundation was masked in the past by high oil prices and reasonably high foreign reserves.
"Again with the availability of foreign exchange it was possible to drive growth in national income through consumption without feeling the fallout of such structural weaknesses.
"These vulnerabilities were exposed when oil prices collapsed at a time the country did not have adequate revenues and reserves to cushion the effect, a situation further complicated by loss of production," the ministry said.
It noted that the situation which pointed to the need for difficult but necessary structural reforms necessitated the federal government's move to improve public financial management and change the structure of the economy through diversification and an investment driven model.
"The federal government therefore took policy actions to promote sectors like agriculture, solid minerals, manufacturing and services and to boost public and private investment in infrastructure and housing.
"It also acted to remove supply constraints with regards to foreign exchange and the supply of premium motor spirit while encouraging the private sector to add value to crude oil through refineries, petrochemical plants, fertilizer plants and gas infrastructure.
"In an attempt to maintain consumption demand in the short term, the federal government also assisted states to pay salaries and to encourage a private sector supply response by bringing about improvements in the ease of doing business," the budget ministry added.
Market Analysts React
Also reacting to the data on the economy released by the NBS, the chief executive of Cowry Assets Management Limited, Mr. Johnson Chukwu, who said the lower GDP growth rate was expected, called for greater synergy between the fiscal and monetary authorities in the country.
"The government job is cut out for them. The key thing is how to use monetary and fiscal policies to address the situation. The emphasis should shift from fighting inflation to restoring growth.
"We expect the monetary and fiscal authorities to evolve expansionary policies that would inject liquidity into the economy and help jumpstart growth," Chukwu said in a phone chat.
In his comment, Research Analyst at FXTM, Lukman Otunuga, said the signs of an imminent slowdown had been visible in the country as the nation struggled to support its currency.
"While naira's vulnerability was highly expected following the official floatation, external risks such as a resurgent dollar have accelerated the devaluation of the local currency, consequently pressuring the nation further.
"With inflation and unemployment hovering around worrying levels, the CBN has been placed under immense pressure to act which may weigh on investor sentiment.
"While the news of Nigeria entering a recession may be painful, this should be no surprise as the incessant decline in oil prices has punished heavily oil export nations, with Nigeria being no exception.
"Although sentiment towards Nigeria remains bearish, it should be kept in mind that the blueprint to diversify and break away from the curse of oil reliance is already in progress.
"The government has already approved a conservative three-year medium-term framework, and plans to reinforce infrastructure, services, manufacturing and agriculture are in place.
"The naira's weakness may attract foreign investors in the future which could ultimately uplift overall GDP. However, Nigeria is undergoing a major structural change and although there is a risk of extended periods of low growth, this transition could be something which exceeds all expectations," the Cyprus-based analyst said.
The Financial Derivatives Company Limited, in a research note, said that the depreciation of the naira by 7.1 per cent on the parallel market during the month of July led to an increase in consumer price levels.
It stated that imported inflation continues to be a key factor precipitating the increase.
"The impact of the FX policy that kicked off on June 20 has been marginal as low dollar supply persists due to reduced dollar inflows.
"Foreign investors remain hesitant about participating in the Nigerian market due to policy inconsistency and lack of clarity as to the direction of monetary policies.
"High energy costs, a major driver of increasing inflation in recent times, also contributed to rising production costs. There were diesel supply shortages in July and this led to the increase of 12.61 per cent in the national average price of the product to N206.55 in July, compared to N183.41 in June.
"Additionally, a shortage of kerosene, which is used in most Nigerian households, led to an increase in its price to N600/ltr, far higher than the official price of N135/ltr.
"The average national price of petrol declined to N148/ltr in July from N149/ltr in June.
"With inflation increasing to an 11-year high, the central bank will be under intense pressure on the direction to adjust interest rates. This comes just after it increased the policy rate to 14 per cent in July, in spite of negative growth and increasing unemployment.
"An important fact is that with the average treasury bills stop rate for 182-day and 364-day at 17.8 per cent and 18.5per cent respectively in August, the MPR may be redundant as the anchor rate.
"The GDP report for Q2'16 shows a negative growth of (-2.06%). This is weaker than expected. With inflation slowing, and Nigeria in recession, the CBN is more likely to pursue an accommodative stance at its next MPC meeting," FDC said in the note.
Culled from: http://www.thisdaylive.com/index.php/2016/09/01/nigeria-slips-into-recession-fg-attempts-to-allay-concerns/
NPA to facilitate movement of cargo by rail
September 1st, 2016
Managing Director of the Nigerian Ports Authority (NPA), Hadiza Usman has emphasized the need to move cargo in and out of the port by rail so as to lessen pressure on the road.
Usman made the disclosure at her maiden visit to the Lagos Port Complex, Apapa on familiarisation tour.
She said that because of the exigency of the times, the NPA will work with the Nigerian Railway Corporation (NRC) to facilitate this by ensuring that the tracks are in place and provision made for rolling stock.
This disclosure is coming on the heels of several calls by stakeholders for shift from emphasis on road haulage to intermodal transport especially as access road to Lagos and other ports are highly dilapidated.
At ENL Consortium and Apapa Bulk Terminal Ltd, Usman tried to find out how they've been able to make use of rail to move cargo.
Mark Walsh, Executive Director Operations of ENL explained that the use of the rails has not been very popular with port users, but since the terminal started making use of it, others have seen the need.
Usman encouraged port users to adjust to more frequent use of the rail, urging them to get across to NPA concerning any challenge in this regard which will be sorted out with the Nigerian Railway Corporation.
The visit to Apapa Port is the second after Calabar Port which she inspected in the second week of August.
The visit to Apapa took her to Western Port, APM Terminals, GDNL Terminal, Eko Support Services, ENL Consortium, Apapa Bulk Terminal and Lilypond Container Terminal now known as Tin Can 2.
At Lilypond Terminal, some clearing agents were seen carrying placards requesting that the terminal be revived as it has remained dry for some time.
The NPA MD told them to articulate their problems and send to her.
The NPA MD also inspected the road construction at the foot of Ijora Bridge by Leventis. Emphasising the importance of the bridge for the movement of cargo out of the port, Usman said she will get in touch with the Minister of Works, Power and Housing to ensure that construction work on the bridge is fast-tracked.
She emphasised the need for cooperation with the Nigeria Customs Service for faster movement of cargo.
Also on the current diversification programme of the government Usman said that the NPA will do everything possible to encourage export so as to earn more revenue to boost the economy of the country.
Culled from: http://shipsandports.com.ng/npa-to-facilitate-movement-of-cargo-by-rail/
Nigeria Manufacturers Say Dollars Still Scarce After Devaluation
August 30th, 2016
Nigerian businesses are struggling to get hold of foreign exchange even after the central bank devalued the currency in June to try and attract investment from abroad, according to the West African country's main manufacturers' lobby group.
Many factory owners can still only access the hard-currency they need for importing equipment and raw materials on the black market, where dollars are more expensive than on the official one, said Frank Jacobs, president of the Manufacturers Association of Nigeria.
"I don't think there are any more dollars in the system since the devaluation," he said in an interview in Lagos, the commercial capital, on Aug. 25. "Not much has happened so far."
Central bank Governor Godwin Emefiele let the naira float on June 20 after a peg he imposed in early 2015 caused foreign investors to flee, starved local businesses of foreign exchange and sent the economy to the brink of recession. While the currency has since weakened 35 percent to 315.25 against the dollar on the official market, it trades at about 410 on the street and foreigners have been reluctant to start buying naira stocks and bonds.
The central bank's decision last week to make banks allocate at least 60 percent of the foreign exchange they sell to manufacturers and importers of raw materials was "excellent," said Jacobs, who is chairman of Jacobs Wines Ltd., which is based in southeastern Nigeria and makes wine and brandy from pineapples.
Jacobs is confident that the government will also ease a ban on importers of goods ranging from glass to toothpicks from accessing foreign exchange from banks. He has met Vice President Yemi Osinbajo and spoke to Emefiele last week to persuade them to reduce a list of 41 prohibited items that was announced in June 2015. The bans have shut factories and cut thousands of jobs, Jacobs said.
"We are making progress" in talks with officials, he said. "I'm very hopeful that before the end of the year they'll say something about the 41 items. Around 60 of our factories have closed in the last year. And we're blaming it on the list of 41 items and the high cost of foreign-exchange."
Emefiele, the former head of Zenith Bank Plc who become governor in June 2014, introduced the rules as part of a range of capital controls to protect the naira as the price of oil, which accounts for 90 percent of Nigeria's export earnings and the bulk of government revenue, crashed.
He argued that, as well as protecting Nigeria's foreign reserves, the restrictions would boost manufacturers by curbing demand for imports and forcing Nigerians to buy local products. Instead, the sector went in to recession last year and contracted 7 percent in the first quarter of 2016.
The 41 items include "essential raw materials" that factories can only buy from abroad, Jacobs said. "Our members affected by the ban are going to the parallel currency market. It's the only place they can buy dollars from."
Investors have blamed the central bank's policies for afflicting the wider economy, which shrank 0.4 percent in the first quarter. Output dropped in the second quarter too, according to all 13 analysts surveyed by Bloomberg ahead of the statistics office's release of the data on Wednesday. The median estimate is for a contraction of 1.6 percent.
Jacobs said Nigeria's manufacturers were further hampered by power cuts. They've got worse in the past year, he said, despite President Muhammadu Buhari's pledge to double electricity generation by 2019. Nigeria, with 180 million people, produces around one-tenth of the electricity of South Africa, which has a population of 55 million. Power plants have been hit as militant attacks on pipelines reduce their gas supplies.
"Power output today is a far cry from what we had in 2014," Jacobs said. "It's dropped significantly."
Culled from: http://www.bloomberg.com/news/articles/2016-08-29/nigeria-manufacturers-say-dollars-still-scarce-after-devaluation
20 shipping firms leave Nigeria over low business
August 26th, 2016
Groaning under intense hardship imposed by poor government policies and global economic crunch, over 20 shipping firms have exited the nation's shores.
This is coming as Dockworkers Union of Nigeria (DUN) lamented that over 3,000 workers have already been laid off by various shipping companies, terminal operators and logistic companies, owing to lack of financing and poor import policies of the Federal Government.
The workers also blamed the massive retrenchment on the inability of the Federal Government to meet its joint venture obligation with the international oil companies which are major partners with the marine logistic companies.
Some of the companies that have already made an exit include Mitsui O.S.K Line, Nippon Yusen Kasha, Taiwan's Evergreen Line, Messina Line, Hapag-Lloyd and Gold Star Line (GSL), among others which were forced to withdraw from the West Africa route due to growing losses as a result of declining volumes.
The President, Dockworkers Union of Nigeria (DUN), Anthony Emmanuel Nted, yesterday bemoaned the poor state of the ports, terminal and work environment in the maritime industry.
Nted revealed that about 20 shipping firms have left the shore of the country because of low traffic occasioned by government importation policy.
According to him, Nigeria as an import-dependent country cannot suddenly ban the importation of the principal goods being generally consumed in the country.
"Hence, the current government policy on importation though with the best intention seems to be wreaking more havoc on the economy and ought to be reviewed urgently," he said.
He, therefore, urged the Federal Government to review the ban on the importation of rice, wheat, vehicle spare parts and industrial machinery until the nation is able to produce for local consumption. He added that the failure to do this would encourage smuggling, diversion of ships to neighbouring countries, idle ports, retrenchment of workers, unemployment and general loss of revenue to government.
According to him, some of the employers of Intels and other logistic companies, which render services to the IOCs are being faced with financial challenges and therefore forced to retrench workers.
He said: "The non-payment of cash calls by government to these oil companies as per their joint venture agreements has been a major setback to the funding of the service of our employers (the logistic companies) and consequently responsible for the massive retrenchment of our members."
But Nted decried the alleged moves by the Nigerian Ports Authority (NPA) to sack a section of dockworkers, tally clerks and onboard security men.
He lamented that the volume of vehicles imported into the country through ports has collapsed to an all-time-low, with the consequent loss of thousands of jobs in the industry.
This was attributed to the duty regime introduced since 2014 and the implication of the new exchange rate for duty calculation, which has made the importation of cars and trucks too expensive.
"In the last two years the number of vehicles in Nigeria has shrunk by almost two-thirds, while the volume of cars smuggled through Cotonou continued unabated," he said.
Also, the Maersk Supply Service, a part of Danish shipping and offshore energy conglomerate Maersk Group, is apparently adopting austerity measures as it moves to reduce its Offshore Supply Ship Vessel (OSV) fleet by 20 in the next 18 months, even as it plans to reduce its crew pool by 400 offshore positions.
The company said that the divestment plan was a response to vessels in lay-up, limited trading opportunities and the global over-supply of offshore supply vessels in the industry.
The Chief Executive Officer of Maersk Supply Service, Jorn Madsen, said: "We are facing unprecedented market conditions, and regrettably we have to further adjust our crew pool. It is an unfortunate, but necessary step to safeguard the future of our company".
He said: "One of Maersk Supply Service's prime objectives is to attempt to restore the supply demand balance in the offshore supply market. This is why the vast majority of the divested vessels will be recycled or modified by their new owners to compete outside their present segments."
Madsen said as a consequence of the fleet reduction and the flagging of existing project vessels to the Isle of Man registry, around 400 crew members would be made redundant as a "necessary step to safeguard the future" of Maersk Supply Service.
"The decision was taken in an attempt to improve the efficiency of the company and to stabilise the liquidity and cash flows. The redundancy process is expected to be completed by the end of September 2016," he stated.
Culled from: http://guardian.ng/news/20-shipping-firms-leave-nigeria-over-low-business/
Apapa gridlock: Shame of a nation’s gateway
August 24th, 2016
It is not for want of raising the alarm over the years that rather than get reasonable attention, the Apapa-Oshodi Expressway has continued to go from bad to worse.
It has reached an extent that someone asked: "What else are you going to write that has not been written about this road, yet no one cares?"The reply was: "But, the road is of such importance that it cannot be ignored. We will continue even if it means shouting ourselves hoarse, until someone decides to do what is necessary."
Today, probably more than ever before, the Apapa-Oshodi Expressway constitutes a major setback to businesses as terminal operators, shippers, tank firms and other industries in that axis are losing millions of dollars to the gridlock.
The Guardian's investigation showed that shippers have been diverting their cargoes to neighbouring countries due to difficulties encountered in clearing goods from the port.The road, which has suffered neglect for over 40 years now is described by operators as an eye sore and a testimonial to infrastructure decadence in the country.
Besides, customs agents are lamenting that the bad roads have necessitated astronomic hike in cost of clearing goods, as vehicles find it extremely difficult to access the terminals for easy delivery.
Yet, the route is one of the most economically strategic to the national economy as it links the seaport in Apapa with the airport in Ikeja.It is currently posing threat to over $650 billion investments at the Apapa and Tin Can Island Ports, going by the estimates of the operators.
The road was partially completed from Cele Bus Stop to Berger with the uncompleted part from Berger to Wharf now taken over by commercial motorcyclists who shuttle between tankers and container-laden trucks to access core port commercial area in Wharf. Many are compelled to ride against traffic while the few conscious one have to wade through the heavy pit of holes to find a route.
Indeed, the terminal operators, Customs officials, port users, truck drivers, depot owners, and transporters who spoke with The Guardian, lamented that the road is retarding business growth and development.The Acting Managing Director, Ports and Cargo Handling Services Limited, Alhaji Mohammed Bulangu, said the access roads to the ports are in a deplorable condition and this has created a source of worry to stakeholders in the industry.
He described it as a major challenge to operators, while appealing to the Federal Government to urgently address it for the overall good of the economy.Bulangu said the company has done some palliative work on the road several times, but this could not help unless government look into complete overhaul of the road.
The President of Association of Nigerian Licensed Customs Agents (ANLCAN), Prince Olayiwola Shittu said: "The road is in the hands of government. Several ministers have made several promises and yet nothing has been done. No individual can tackle that road, even to do palliatives. Some of the companies there came together, but it was difficult because the foundation needs rebuilding.
"Considering the heavy traffic and heavy load the road carries day in day out, it should be concreted with iron, but the government said it does not have money to do it."Some sections of the road had been fixed sometime ago, but it is very difficult to complete because of the monetary measures put in place by the government.
To do procurement, it will go through some rigorous steps and many offices. That is what you see in some of our budget. There is no way we can do even 40 per cent implementation of the budget because of the restrictions. We have many of our members who sleep in Apapa and go home at the weekend.
"Importantly, let me say this: anybody who has no business should not be at the ports. Go there, you will see people reading newspapers, idling away their time along the road. Ask them what are they doing they will say: ‘I am looking for my importer.' Why don't you go to the office and wait for your importer.
"The new parking space is provided for them, I think NPA, which is the landlord and transport workers should tell us what is the issue with the parking lots. You will also see petroleum tankers parking on the road and waiting to lift fuel. In fact petroleum depots should not be located near the ports. No country allows tank farms near residences and ports. They could as well locate them in Epe and access it from that end in other to decongest the ports route. The ports have been in existence but those who took money in government to approve these tank farms have taken the money and they have gone, that is what we are suffering today," he said.
Managing Director, Lagos Deep Offshore Logistic Base (LADOL) Amy Jadesimi, said it was high time the Federal Government fixed the road to boost industrialization. Although, the route does not really affect LADOL since it is located on an Island adjacent Ikoyi and Apapa, Jadesimi said it is key to success of other important businesses that contribute immensely to the economy.
"Those who know LADOL very well know that we reach LADOL by water and we chose that location specifically for ease of logistics. Ikoyi to Lekki by water takes you less than 10 minutes, but to travel by road takes you more than one hour depending on the traffic situation. It is not affecting us because we have other routes that we can take.
"However, I need to say that it is critically important that we resolve this infrastructure issue to save our economy.Fewer than 20 per cent of the roads in Nigeria are okay, so we have a national crisis in terms of infrastructure which needs to be addressed, because unless we stand to fix the infrastructure deficit we are not going to industrialise our nation," she said.
Meanwhile, there are indications that AG Dangote Construction Company are planning to commence works on the roads.As part of the arrangement, the General Manager, Western Ports of the Nigerian Ports Authority (NPA), Michael Ajayi has appealed to all owners of underground cables along Apapa Wharf road to urgently clear or get alternative custody for them to allow for the commencement of reconstruction work on the road.
Ajayi reiterated that the early commencement on the Wharf road reconstruction project would depend on the timely cooperation of the owners of some underground infrastructures whose facilities may be affected by the project.
The general manager explained that as the handily contractor on the project Messrs AG Dangote Construction Company, a subsidiary of Dangote Group has mobilized to site and ready to commence work on the road. It has become necessary to appeal to all owners of these underground facilities to clear them or get alternative custody for them to allow work on the project to commence in earnest.
It would be recalled that the Federal Government had approved Messrs AG Dangote Construction Company, to re-construct the Lagos Ports Complex access road from the Port to the foot of the Apapa Bridge by Area "B" Police Station along Wharf Road, Apapa.
It could also be recalled that in order to ensure a hitch free commencement of the reconstruction , the Nigerian Ports Authority (NPA) Western Ports (Headquarters) convened a meeting of stakeholders to discuss modalities for the successful execution of the project.
Ajayi pointed out that it is in the interest of all stakeholders and all those doing business in Apapa to see to the early commencement of the reconstruction work on the Wharf Road and its successful completion as unnecessary further delay on this project would not be in the interest of the overall economic activity of Lagos State and the nation as a whole.
Culled from: http://guardian.ng/features/focus/apapa-gridlock-shame-of-a-nations-gateway/
272 firms shut down in one year
August 24th, 2016
Manufacturers and other private sector operators on Tuesday painted a gloomy picture of how the foreign exchange restriction placed on 41 items by the Central Bank of Nigeria had affected operations in the business sector.
They said that since the restriction order was placed last year, about 272 firms had been forced out of business, 50 of which were manufacturing companies.
While some of the affected manufacturers have relocated to neighbouring countries, according to Manufacturers Association of Nigeria, at least 222 small-scale businesses have closed shops, leading to 180,000 job losses.
As a result of the negative impact of the policy on the operations of manufacturers, stakeholders in the economy including MAN, the National Association of Small and Medium Enterprises and the Lagos Chamber of Commerce and Industry insisted that the policy must be reviewed.
They spoke at the launch of a report on the manufacturing sector by NOI Polls Limited, in collaboration with the Centre for the Studies of Economies of Africa.
The Director, Economics and Statistics, MAN, Mr. Ambrose Oruche, lamented the unavailability of productive inputs, stating that this was the major challenge confronting manufacturers.
He attributed the problem largely to the ban by the CBN on certain items from acessing the official window of the forex market, adding that the current operating environment was too harsh for many manufacturers to continue to operate.
He wondered why the CBN and the Federal Government kept coming out with what he described as conflicting polices, noting that this was affecting the growth of the manufacturing sector.
He said, "Presently, about 50 manufacturers have closed shop, while some have downsized. Some manufacturers are still producing due to their love for this country. Government's policy on cement should have been adopted in this case.
"In the case of cement, Nigeria used to be a net importer of cement, but the government set up a policy over a five-year period, which made it possible that today, we are a net exporter of the commodity."
Oruche said the fact that the economy was technically in recession should have made the CBN to redirect its policies towards stimulating the economy rather than tightening money supply.
He also listed high interest rates, poor power supply, policy inconsistency, poor patronage of locally manufactured products, poor supporting infrastructure, among others, as the challenges confronting manufacturers.
In his remarks, the Director, Research and Advocacy, LCCI, Mr. Vincent Nwani, said the CBN announced the ban on the 41 items without consulting other stakeholders in the sector.
He said, "We did press releases; we did stakeholders engagement; we engaged with the CBN at all levels, at least three times; we met the directors twice up to the CBN governor on this same matter of the 41 items- giving them examples of product-by-product.
"There must be an urgent review of the CBN's policy on the restriction of access to foreign exchange placed on 41 items, as about 16 of the total items on the list serve as critical raw materials for intermediate goods produced in Nigeria, especially as the country lacks the capacity for optimal production of the items."
For instance, he said that the ban on oil palm alone had led to a loss of about 100,000 jobs over the last couple of months, while the ban on glass and glassware resulted in 80,000 job losses mainly in the pharmaceutical industry.
Nwani said many companies in the pharmaceutical sector now found it difficult to package their products.
He said, "Local production of oil palm is put at about 600 metric tonnes annually, but the total demand in the country is put at about 1.8 million metric tonnes.
"Today, Presco Oil has orders of up to December 2017 to fill, it is presently hard pressed with demands. Listing oil palms among the restricted items meant that we have a shortfall of about 1.2 million metric tonnes.
"Some of the items placed on the restriction list by the CBN should be reinstated until the country develops the capacity to produce them locally. Some of the items need a period of between three and seven years for the country to develop self-sufficiency in their production."
Nwani said, currently, about $10bn of manufacturers' funds were stuck in foreign countries because the owners had no confidence in the economy.
He said, "We have about $10bn stuck in one country or the other earned by our members. Some of them are not manufacturers; some are agriculturists or merchants of different products."
Meanwhile, the President of MAN, Dr. Frank Jacobs, has lauded the recent directive of the Central Bank of Nigeria that 60 per cent of foreign exchange allocation should go to the manufacturing sector. The association is also confident that with such powers, manufacturers may determine exchange rate in the country.
Jacobs said at a media briefing in Lagos on Tuesday that the directive would revive the sector and reflate the economy.
He said, "MAN commends the Federal Government and the CBN on this directive. It is a welcome development and will give fillip to efforts of government aimed at reflating the economy.
"This is an opportunity for the manufacturing sector to determine the exchange rate of the dollar. I will encourage our members not to bid too high, to also understand the power they have today to determine the exchange rate. With 60 per cent allocation, the banks will be willing to sell to manufacturers at a comfortable rate because they cannot keep their dollars."
Culled from: http://punchng.com/272-firms-shut-one-year-man/
Deep seaports everywhere, but which of them will be viable?
August 22nd, 2016
It appears some state governors are trying to outdo each other in the establishment of so-called deep seaports in their domains. Lagos State is pushing hard for the Lekki deep seaport and Badagry mega-port while Ondo and Ogun States have been championing the joint development of the Olokola deep seaport for about a decade. Akwa Ibom State joined the fray about four years ago under its erstwhile governor, Godswill Akpabio with the proposed Ibaka (or Ibom) deep seaport, while Ben Ayade of Cross River State, immediately assuming the governorship of his state in 2015, became a strong advocate of the Calabar deep seaport.
One begins to wonder if these governors have done their homework on the viability or otherwise of the proposed deep seaports. Why will any state, in this period of austerity, expend as much as two billion dollars on a facility that might not yield good future returns or add significant value to the economy of the state or better the lives of its citizens? I honestly do not believe that any deep seaport outside Lagos will be viable. There will not be sufficient cargo volumes to support such facilities in the next 50 years. This is clear enough from the current underutilization of existing port facilities in the country, especially those facilities outside Lagos. For instance, while the ports in Lagos have capacity utilization of about 50 - 60% at present, the ones in the South South - Warri, Port Harcourt and Calabar - have about 25% capacity utilization. The exception will be Onne Port which is fairly busy. Even the so-called Olokola port; can it honestly compete with the ports in Lagos or the ports of fellow West African countries such as the Autonomous Port of Cotonou or the Port of Lome for cargo?
I think rather than establish these mega white elephant projects, the governments of Akwa Ibom and Cross Rivers States should join hands with the Federal Government to address the shortcomings of the Calabar Port so that it can attract business and compete with other ports in the sub-region. The shortcomings of the Calabar Port include shallow draft, which has made it impossible for large vessels to berth, poor port access road and the restriction imposed by the Ikom bridge.
The question is, does Nigeria require a deep seaport? Yes it does, but one is enough for now and I believe Lagos remains the most viable state to host such facility.
Container throughput at Lagos ports is expected to hit two million twenty-foot equivalent units (TEUs) by 2020 whereas the maximum capacity that the ports and the Inland Container Depots (ICDs) in the State can accommodate is 2.2 million TEUs. Lagos ports alone handle 90 per cent of the cargo in and out of Nigeria. With this expected growth in container volumes, the combined capacity of Apapa Port fully-developed and Tin Can Island Port and all the Inland Container Depots (ICDs) in the Lagos area is expected to be inadequate within the next five years. The same situation also applies to general cargo terminals.
A new port will therefore be needed to keep up with the demand for capacity, as the existing ports are surrounded by the city and cannot be further expanded.
At present, two new seaports are at various stages of development in Lagos State. Leading global terminal operator, APM Terminals and its consortium of partners are developing the new Badagry mega-port project and Free Trade Zone while Indian firm, Tolaram Group, is spearheading the Lekki Port project being developed within the Lagos Free Trade Zone.
Since the existing ports in Lagos will run out of capacity in the next five years - a new port has become imperative but certainly two new deep seaports will be an over kill. So which of the two new ports will be sustainable? The natural location, the supporting infrastructure and the support of stakeholders are key success of a Greenfield port. In choosing the location of a Greenfield port, the factors that must be considered include natural deepwater and harbour and supporting navigational channels with commensurate draft.
Other factors include lower risk of encroachment of city development in the immediate future, connection to multimodal infrastructure for evacuation of cargo by road, rail and barge, government support to the investors with policies that will protect investments, presence of adequate supporting services and review of cargo clearance processes to support faster cargo evacuation and reduce dwell time.
Both Badagry and Lekki have natural features for a port. Natural harbours have long been of great strategic naval and economic importance. They reduce or eliminate the need for breakwaters which would ordinarily cost a fortune to construct. Some examples of natural harbours are New York City harbour in the United States; Kingston Harbour in Jamaica; Subic, Zambales in the Philippines; Sydney Harbour in Australia; Pearl Harbour in Hawaii; San Francisco Bay in California; Visakhapatnam Harbour in Andhra Pradesh, India; Killybegs in County Donegal Ireland; and Halifax Harbour in Nova Scotia, Canada. Unlike Lekki which is more of a residential area; Badagry has been used before now as a port especially in the days of slave trade.
The proposed Port at Lekki is surrounded by the lagoon and you can go in and out of the port area through only one way. Because the Lekki axis is largely a residential area, vehicular traffic in and out is very heavy without the added burden of trucks plying that route. What will happen when trucks join the fray on the road is better imagined. Due to this constraint and in the absence of a rail system, evacuation of containers from the Lekki Port to the Western part of the country will be very difficult if not impossible. You can't move goods up north either except a new bridge the size of the Third Mainlaind Bridge is constructed around the lagoon. Trucks evacuating goods from the port however can head for the Eastern part of the country but then, they will have to travel almost 100 kilometres to link up the Benin-Ore road. Movement of goods out of the port through barges is not an option either because Lekki is backed by a very broad and shallow lagoon making barging difficult.
Badagry is devoid of the logistics constraints confronting Lekki. The lagoon, which terminates just before Badagry, will form one of the boundaries of the Badagry mega-port. The lagoon is not a problem for the port as a bridge already exists over it. Access road in and out of Badagry is much better than Lekki. The little congestion being experienced on the Badagry expressway is already being addressed by the Lagos State Government through the construction of six lanes on each side. There is also a road link from Badagry through Agbara which can take trucks to the northern part of the country and which by-passes the heavily crowded Okokomaiko-Mile 2 axis. Badagry also has a higher potential for barging with its narrow but deep lagoon. From a logistics perspective therefore, Badagry is superior to Lekki but one must quickly add that neither Badagry nor Lekki has rail links at present.
From a commercial perspective; it is necessary to consider how to move patronage from the existing facilities to the new port. The inertia of freight forwarders, importers, exporters and other stakeholders to move their structures and operations from existing port facilities to a new satellite port is a significant challenge associated with new ports. This major challenge can be seen with regards to the operation of the Batangas International Seaport in the Philippines which commenced operation about 10 years ago and despite several government incentives, is still struggling. The Port of Manilla was hugely congested and Batangas, located 70 kilometres away, was built to take pressure off it. For the first two years of operation, no ship called at Batanga and till date, the port handles less than ten percent of Manilla's cargo.
Lekki Port's business strategy, anchored on getting shipping lines to call at the port with the believe that this will compel patronage, has been proven time and again that shipping lines don't actually control where cargoes go. It is overly simplistic to assume that once you offer shipping companies certain level of incentives, then the port will come alive. Despite reduction in wharfage, berthing fees and vessel-related charges at the Batangas Port, activities are very low almost a decade after it commenced operation. No doubt, government support and legislation are required to make new satellite ports work but it is important also to have the ability to move freight forwarders, truck operators and other stakeholders. From this perspective - Badagry Port also has an advantage over Lekki because the promoters - APM Terminals and its consortium partners have control over cargo volume in Apapa unlike the promoters of Lekki who have no control of any port operation in the country - or in any part of West Africa.
A "build it and they will come" mentality won't work with a new port project. A new port must also have a significant basis of gateway cargo in order for a solid business case to be built for transshipment cargo. Building a port, like Lekki and Badagry, on the assumption that it will be sustained on transshipment cargo is a fallacy. Transshipment cargo can come and disappear overnight especially without strong domestic cargo. The cost of building a new port cannot be underestimated with about USD1.5 billion required for investment in quay wall, quay apron, terminals, cargo handling equipment, information technology etc. Potential investors and financiers will certainly be interested in good return on investment. Spending USD1.5 billion in Lekki and another USD1.5 billion in Badagry means someone is going to get their fingers burnt. There will be growth in volume over the years no doubt but not such as can take two new deep seaports in addition to the existing ports. Again, there isn't likely to be people interested in investing in these two ports considering the huge capital requirement. The volume of cargo increase just can't justify any such investment in the medium term and who is willing to invest and not get return in 8 to 10 years?
As stated earlier, five new deep seaports in Nigeria in addition to Rivers Port, Calabar Port, Onne Port, Warri Port, Lagos Port Complex Apapa and Tin Can Island Port is an overkill. There is simply no market for it and there won't be in another half a century.
Culled from: http://shipsandports.com.ng/deep-seaports-everywhere-but-which-of-them-will-be-viable/
50 firms shut down over restriction on raw materials
August 17th, 2016
With government sustaining its restriction on some items used as raw materials in the manufacturing sector, no fewer than 50 industrial firms have shut down operations with many more struggling to stay in business as capacity utilization level drops further.
Specifically, the President of Manufacturers Association of Nigeria (MAN), Dr Frank Jacobs, while appealing to the Federal Government to address foreign exchange restriction on some commodities used as raw materials in the real sector stated that many firms are struggling to sustain their businesses due to the Central Bank of Nigeria's monetary policy.
Meanwhile, the Federal Government, through the Vice President, Prof. Yemi Osinbajo, stated that efforts were underway to address some monetary policy challenges through fiscal policy frameworks.
MAN had earlier in the year, projected a continued rise in consumer prices within the first half of 2016 if the issue was not addressed, noting that many industrialists may run out of stock of some raw materials used for production by the end of first quarter of 2016, as access to foreign exchange remains limited.
Specifically, Jacobs, during a Presidential Policy Dialogue with Vice President Yemi Osinbajo, noted that about 680 HS codes were identified following the breakdown and classification of the 41 restricted items by the Central Bank of Nigeria (CBN) from the official forex window into HS codes.
Of the 680 HS codes, Jacobs explained that 95 HS codes are raw materials used in the course of production in factories and they are presently restricted from access to forex market.
While the CBN might have made pronouncement unveiling its resolve to give priority to some of the HS classified products, manufacturers believe the order of priority needs to be addressed urgently as there are outstanding requests to meet local production needs.
According to him, at least 50 firms have shut down operations with many more struggling to maintain their production schedule.
"We have appealed to the CBN to remove those items from the list and if that had been done, we would have been shouting for joy because the rest of the 585 items will be to the benefit of the country because if those items are not imported; it will be better for the economy," he told The Guardian in an earlier interview.
Osinbajo said the immediate task before the present administration is reduce fiscal, forex imbalances, lower interest rates, and increase lending to the real sector of the economy, to achieve rapid economic growth.
Osinbajo said other tasks under immediate priority included boosting dollar liquidity, curbing inflation and increasing Foreign Direct Investments (FDIs) by sustaining enabling policies. This is aimed at encouraging Public Private Partnerships (PPPs) and organising collaborative engagements with the private sector, to deepen the nation's diversification efforts and create jobs directly and indirectly, to alleviate poverty.
Indeed, MAN had called on Nigerians to brace up for a very difficult time going forward in the year, stating that the nation is transiting from what it calls a disorganised system to a more organised system and would require sacrifices on the part of every Nigerian to get the country back on track.
Culled from: http://guardian.ng/business-services/50-firms-shut-down-over-restriction-on-raw-materials/
ECOWAS targets 2017 for full implementation of common external tariff
August 17th, 2016
The Economic Community of West African States (ECOWAS) has decided to reach effective application of the common external tariff from Jan. 1, 2017 by the whole of its 15 member states.
A release stated that the decision was reached on Monday night in Cotonou. It noted that the decision had become imperative as only nine member states apply the common external tariff that came into force in January 2015.
The ECOWAS common external tariff launched during a meeting of head of states and governments in December 2014 in Abuja, Nigeria, was adopted in January 2006.
The completion of the common external tariff will be a milestone in the establishment of a customs union as part of ECOWAS's integration programme.
The release said that it underscored that the success of the West African integration depends on the creation of a common market through the liberalisation of trade and the adoption of a common external tariff.
It said that to reach the goal, ECOWAS assigned team of consultants in the 15 member-states to assess the situation and identify the inherent difficulties.
"A synthetic report of evaluation missions will be submitted to members of joint management committee of the common external tariff, which is expected to hold a meeting next Monday or Tuesday in Dakar, Senegal," it said.
The release said that the meeting of Dakar would be the opportunity for the ECOWAS commission to work, especially with the six member states that fail to apply the common external tariff. It noted that the Dakar meeting would help overcome existing barriers to ensure effective implementation of the common external tariff in all ECOWAS member states from January 1, 2017.
Culled from: http://shipsandports.com.ng/ecowas-targets-2017-for-full-implementation-of-common-external-tariff/
Nigeria highest importer of wheat, rice, sugar annually
August 15th, 2016
Importation of rice, wheat, fish and sugar costs Nigeria N1 trillion annually, the federal government has said.
This was disclosed by the Executive Secretary, Agricultural Research Council of Nigeria (ARCN), Prof. Baba Abubakar, during a seminar on Agricultural Biotechnology in Abuja.
The Executive Secretary who was represented by Yarama Ndirpaya, Acting Director, Partnership and Linkages Programme, said Nigeria was the largest importer of US hard red and white wheat worth N635 billion yearly; world's number two importer of rice at N356 billion; while it spends N217 billion on sugar and N97 billion on fish importation.
This, he said, was unacceptable, but added that the capacity of Nigerian farmers were limited, explaining that they use techniques that affect soil fertility, water and biodiversity.
He warned that except farmers were empowered with biotechnology, the problem would continue.
"Nigeria spends over N1 trillion on the top four food imports annually. And farmers have limited capacity and use techniques that adversely affect soil fertility, water and biodiversity. Human-induced climate change compounds the issue," he said.
Culled from: http://shipsandports.com.ng/nigeria-highest-import-of-wheat-rice-sugar-annually/
Cross River raises hope on N300billion Bakassi deep seaport
August 12th, 2016
The Governor of Cross River State, Ben Ayade, has assured that mercenaries are in motion to begin construction works on the proposed Bakassi deep seaport.The facility, which is estimated to gulp $500 million and $800 million (about N300 billion) according to Ayade will boost banana exportation through the proposed world-class banana plantation in the state.
Ayade, who disclosed this during the official visitation of the Managing Director of Nigeria Ports Authority (NPA), said the deep seaport would not compete with existing Calabar ports, it will only complement it because the Bakassi port will be a 16 meters draft and will accommodate mother vessels especially from the far East.
He said: "Rather, it was borne out of the necessity to provide a new economic hope to the people of Bakassi. The port will restore the hope of the people of Bakasi and they will know that the President cares for them."
Ayade said the project has received presidential nod. "Even in the wave of security challenges and the fear that this project was impossible, the president has kept giving me proper encouragement and I am happy to acknowledged that."
He said: "It is a clear indication that the young people have to take charge. This is one of the fastest seaports under construction. The port will have a draught of 16 metres to attract huge cargo traffic."
The Governor added that over 100 Chinese firms were ready to come and start construction, manufacturing at the deep seaport.He said: "The Bakasi people of Cross River State who had been displaced by no fault of theirs had been denied all rights. The deep seaport is meant to provide a new economic base and give the Bakassi people a sense of belonging.
"By the time the deep seaport takes off, they would then recognise that the President felt for them."Ayade noted that Panamax vessels would be berthing in the port, which is 90 kilometer away from Calabar port.The governor also expressed concern about the maintenance dredging of the Calabar port, which had remained "a big challenge".
He said: "Dredging is an issue that has been recurring and I believe that the dredging of the Calabar port would finally commence. If we get the Calabar port working, it would support the exportation of agricultural products of the state."
Ayade said the state government is planning to cultivate the largest banana plantation in the world and would be exporting the products through the deep seaport.He noted that the Calabar port would serve as a transit port to support the mother vessels that would be operating at the Bakassi deep seaport.
"We will provide supervision for the dredging of the Calabar Port. We will do our best to support you in the dredging of the Calabar Port,"he said.Usman however assured that NPA would jointly work with the state government to have sustainable development of the ports."We would interact exhaustively on way forward to improve the Calabar port," she said.
Culled from: http://guardian.ng/business-services/cross-river-raises-hope-on-n300billion-bakassi-deep-seaport/
NIMASA to fully implement Ballast Water Management Convention
August 10th, 2016
Stakeholders in the Nigerian maritime industry have been called upon to protect the marine environment from alien invasive species that are conveyed into Nigeria's territorial waters as ballast water from ships.
This call was made by the Director General of the Nigerian Maritime Administration and Safety Agency (NIMASA) Dr. Dakuku Peterside during the meeting of the members of the National Task Force for the Implementation of the Ballast Water Management Convention 2004 in Lagos recently.
According to press statement from NIMASA, Peterside who restated the Agency's commitment towards ensuring that the sustainability of the environment is always at the front burner while shipping activities are carried out in the country, also called on stakeholders to be mindful of activities that could lead to the deterioration of the marine environment.
He noted that, "the long years of exploitation and exploration of available resources in our marine environment has made it fragile but we have a responsibility of ensuring that the environment remains sustainable for the generations yet unborn".
The DG said that while vessels carry ballast water for stability, the water and sediments therein have become a platform for the conveyance of alien invasive species into our environment which makes it mandatory for the Agency to tackle this menace in line with IMO regulations.
Dr. Peterside said that "ballast water and the sediments therein have become a platform for conveyance of invasive aquatic species into our environment which could be dangerous in the long run hence the need to tackle the scourge head on before it becomes uncontrollable. NIMASA is therefore committed to ensuring that the Ballast Water Management Convention 2004 is implemented in Nigeria".
The DG charged members of the Task Force to develop a policy and workplan for the implementation of the Ballast Water Managemnt Roadmap for Ballast Water Movement in Nigeria which would ultimately protect the environment from alien invasive species.
Earlier in his address, Professor Babajide Alo, Chairman of the National Task Force and former Deputy Vice Chancellor of the University of Lagos, observed that the issues of invasive species had become worrisome stating that studies have shown that water hyacinth invasion in Nigeria for instance, was as a result of a fertilizer industry in Lome which normally pumps its waste into the sea.
He therefore advised that Nigeria should take a holistic approach to the issue by considering the entire Gulf of Guinea while seeking solutions to tackle the menace.
It would be recalled that Nigeria was one of the first eight countries that adopted the Ballast Water Management Convention 2004 and it is the 14th leading country in the GEF-UNDO-IMO Globallast partnership, a group set up by the IMO to give technical support to other member states on the implementation of the convention.
Culled from: http://shipsandports.com.ng/nimasa-to-fully-implement-ballast-water-management-convention/
Federal Government approves construction of Badagary Seaport
August 4th, 2016
The Federal government has approved the construction of another seaport in Badagry, Lagos state.
Minister of information, Lai Mohammed made the disclosure at the end of the Federal Executive Meeting held in Abuja the nation's capital.
He also said the project will be carried out by a private sector.
Minister for Power, Housing and Work, Babatunde Fashola, who was also present at the meeting, thanked President Muhammadu Buhari on behalf of the people of Lagos state for the approval.
"There is transparency and accountability on the private side of the economy than we have on the public side of our economic life," he said.
"As for the Badagry port, well, it is a port that is long overdue... Our ports, in terms of technology, are behind maritime transport industry; there are bigger vessels being built across the world and they require larger depths in other to berth.
"Some of our competitors on the continent like Djibouti are building bigger ports, so if we don't build this port, we risk becoming uncompetitive and we risk a threat to our maritime, in the sense that they become a port of trans-shipment instead of original destination.
"That is the business and economic basis for the development of this port. It all started in 2012, and it is interesting that all of the financing is coming from private sector and again that is consistent with what this government stands for in terms of allowing private capital... for the development of our people."
He said the projects had been on since 2012 but the Administration of Goodluck Jonathan withheld approval for the project.
Culled from: http://www.tv360nigeria.com/federal-government-approves-construction-badagary-seaport/
Customs Defaults May Affect 2016 Budget Revenue Target
August 1st, 2016
The federal government's plan to raise N4.2trillion ($14.3 billion) revenue set in the 2016 budget from its revenue agencies may not materialise, as the Nigeria Customs Service (NCS) has failed to meet the target set for it by the government.
Just like most other government agencies, THISDAY findings revealed that collections are running behind target at the Nigeria Customs Service.
The NCS averaged N43billion per month in January to April this year, compared with N72billion targets in the 2016 budget.
Analysts believe a combination of squeezed private consumption and foreign exchange rationing is probably to blame and stressed however that Nigerians can expect some relief from the effective devaluation of the naira.
On its part, the Federal Inland Revenue Service (FIRS) reported collection rates of about 90 per cent for Q2 2016 and 73 per cent for the first and second quarters combined.
Its chairman, Babatunde Fowler, while announcing the numbers, stated that the revenue agency hopes to hit its target over the full year.
It was unclear whether he was referring to the FIRS's own target of N4.9 trillion set at the start of the year or the N4.2 trillion ($14.3 billion) in the 2016 budget.
"Either way, the FIRS has developed some positive momentum in identifying new taxpayers and collecting their dues. The FIRS is likely to outperform the other revenue collection agencies this year. The FGN is adamant that it will trim its capital expenditure plans rather than grow the projected deficit if, as we expect, it has to choose," said analysts at FBN Quest.
However, a different impression was given last week by the Secretary to the Government of the Federation, Babachir David Lawal who stated that collections overall this year were running at 50 per cent to 60 per cent of target.
THISDAY had exclusively reported last week that following the foreign exchange crisis in the country and the exclusion of 41 items from access to forex, the level of operational activities at the port locations in first quarter of 2016 dropped significantly when compared with the same period of 2015.
This was contained in the first quarter 2016 operational report released by the Nigerian Ports Authority (NPA) revealed that though all cargo types declined during the period, container and general cargo traffic contributed significantly to the overall drop in cargo throughput.
Consequently, the NPA said there is urgent need to complement its investment in infrastructural renewal and automation of Nigerian port operations, by generating enough export cargo to make up for the shortfall of import cargo being witnessed in the ports.
The shortfall, it added, could be attributed to the reduction in government expenditure (a laudable and broad plan of the government to rebuild the economy), the exchange rate volatility as well as global economic crisis.
To address the problem, the NPA said it did an analysis of port capacity as a catalyst to economic development through export commodities.
The analysis, it stated, revealed that about 90per cent of container traffic left the shores of Nigeria empty.
This position was communicated to the Nigerian Export Promotion Council (NEPC) by NPA management and highlighted the need to sensitize Nigerians on the need to fill the vacuum through export commodities, especially Mines and agro-allied products, "it stated.
Analysis of the report showed that in the first quarter of 2016, a total of 1,131 oceans going vessels and crude oil tankers with a total Gross Tonnage (GT) of 59,441,614 called at Nigerian Ports.
The report showed that Lagos Port Complex (LPC) recorded a gross tonnage of 8,195,979 showing a decrease of 11.5 per cent from 9,262,792 gross tons achieved in the first quarter of 2015. A total of 296 vessels were handled in the period.
Naira to weaken further on dollar shortage
August 1st, 2016
The naira is expected to continue to weaken this week on limited dollar supply as foreign portfolio investors stay on the sidelines until the Nigeria economy shows signs of recovering from the impact of currency controls, foreign exchange traders have said.
The naira had hit an all-time low of 334.50 per dollar on Wednesday, a day after the Central Bank of Nigeria hiked interest rates to try to lure foreign investors back into local assets, Reuters reported.
Forex traders said investors were pushing the naira lower to test the limit of how far it could fall, given a spread of almost 12 per cent between the official and black market dollar-naira exchange rates.
On Friday, the naira closed at 321.16 to the dollar at the interbank market, compared to 292.40 the previous Friday.
At the parallel market, the local currency closed at 380 against the greenback on Friday, compared to 378 a week earlier.
According to financial analysts and experts, the naira may weaken further, especially at the interbank market, if the CBN fails to intervene at the market this week.
"We are in a very challenging situation as a country and the CBN needs to do something urgently to stabilise the exchange rate at the interbank market," analyst and Chief Executive Officer, Cowry Asset Management Limited, Mr. Johnson Chukwu, said.
He added, "If the CBN fails to intervene, the naira may fall further against the dollar at the interbank market. If it does, the naira may appreciate to say about 310/dollar. But the point is that the market needs sustained intervention until there is a calm that will assure the foreign investors that things are now normal."
Chukwu believes the CBN may need to access close to $10bn facility from the World Bank to stabilise the forex market.
Meanwhile, Ghana's cedi is expected to be firm, underpinned by inflows from offshore investors who bought government debt two weeks ago, Reuters reported.
The cedi is expected to trade steady against the dollar this week on residual forex inflows from investors who took part in a five-year domestic bond sale a fortnight ago.
The local unit has been fairly stable last week after settlement of the bond on Monday. It closed at 3.9620 to the dollar on Friday, stronger than 3.9650 a week earlier.
"The pair (cedi/dollar) is expected to remain fairly stable around 3.9650 levels on the market, even in the face of a steadily growing demand from importers," an analyst at Dortis Research, Joseph Amponsah, said.
The Kenyan shilling is expected to post gains, boosted by expected inflows from foreign investors taking up government debt, wooed by a surge in rates.
Commercial banks quoted the shilling at 101.35/45 to the dollar, stronger than the previous week's close of 101.45/65.
The Tanzanian shilling is seen buoyed by sagging dollar demand and increased inflows from large companies in tourism and agriculture sectors.
Import duty to rise further as CBN adjusts dollar exchange rate to N316
July 28th, 2016
The Nigeria Customs Service (NCS) may soon adjust the import duties on cargoes coming into the country as the exchange rate of the naira to the United States dollars crashed further on the Central Bank of Nigeria (CBN) official exchange window this week.
According to figures published on the CBN website, the nation's local currency now officially exchanges for N316 to the dollar, as at Wednesday. The naira had declined further yesterday from the N300 it traded on the official exchange window last week.
If Customs adjusts the import duty rate using the new CBN exchange rate, tariffs on cargoes coming into the country will rise by 12.1%.
The NCS had, through a memo issued to all zonal coordinators and area controllers on July 1, 2016, directed that all commands should begin to charge duties based on the foreign exchange regime of N282 at the time.
The circular, signed by Deputy Comptroller-General, Tariff and Trade, A. Adewusi, said the calculation of customs duties based on the N197 to one US dollar exchange rate was no longer tenable. But the application of N282 to the dollar to calculate import duty rates led to a 43% increase on duties payable on imports.
"Customs has to work with the official exchange rate. We expect adjustment to reflect N316, which is the prevailing official exchange rate, anytime soon," a Customs Comptroller at the Customs headquarters, Abuja, who did not want his name mentioned because he was not authorized to speak on the matter, told SHIPS & PORTS DAILY on Tuesday.
However, the Association of Nigeria Licensed Customs Agents (ANLCA) and the National Association of Government Approved Freight Forwarders (NAGAFF) have complained that the operations of the NCS is shrouded in secrecy as their members have not been engaged in the implementation of new policies by the Customs management.
"Customs is not in the habit of circulating circulars to Customs agents. That is why the officers on the field continued to extort our members.
"Circulars from Customs about operations on what you have to do or comply with should be made public. Why the secrecy? Even now if you are bringing a vehicle into the country, you don't know how much you have to pay until you go to the Customs and start asking questions.
"They will tell you rates based on their discretions without showing you the official benchmark. Why shouldn't people know? If you are talking about transparency in a new government, then everything should be open so that if you are bringing in a vehicle you already know how much to pay," he said.
The Shippers' Association of Lagos State (SALS) has said that its members might be forced to abandon their cargoes at the port due to the high import duty imposed on them.
FG Records 55 per cent Half-year Revenue Shortfall
July 27th, 2016
The federal government has recorded a revenue shortfall of N1.064 trillion, or 55.2 per cent of the budgeted revenue in the first six months of the year, the Minister of Budget and National Planning, Senator Udoma Udo Udoma, disclosed monday.
The government is also likely to set the oil benchmark for the 2017 budget at $42.50 per barrel, oil production of 2.2 million barrels per day, and target an exchange rate of N290 to the dollar.
Udoma opened up on the 2016 budget performance and the government's projections yesterday in Abuja during the commencement of consultations with civil society groups on the 2017-2019 Medium Term Expenditure Framework (MTEF) and Fiscal Strategy Paper (FSP).
The minister said the administration was considering conservative oil benchmark prices of $42.5 for a barrel per day (bpd) for 2017, $45 bpd in 2018 and $50 bpd in 2019.
The minister also disclosed that the government was expecting oil production of 2.2 million, 2.3 million and 2.4 million barrels per day, in 2017, 2018 and 2019, respectively.
He said the government was projecting a gradual recovery in the Gross Domestic Product (GDP) growth rate after the slowdown, adding that a very marginal growth rate of 0.35 per cent was expected in 2016, with growth rising to 4.4 per cent in 2019.
According to him, this averaged 3.77 per cent within the three-year period of the MTEF. "GDP growth is expected to be largely driven by the non-oil sector with agriculture including agro-businesses, solid minerals, and construction and the housing sectors playing lead roles. Export-led growth will also be pursued," Udoma said.
On the 2017 budget, the minister said his team was working conscientiously for an early presentation to the National Assembly.
However, he stated that nothing had been decided on the MTEF proposal, adding that his team would consult extensively with all stakeholders to produce a document that would meet the expectations of Nigerians.
Udoma also revealed that the federal government recorded a revenue shortfall of N1.064 trillion in the first six months of the year, stating that total revenue inflow was short of the 2016 budget projections by 55.2 per cent.
According to him, the shortfall was augmented by domestic borrowing amounting to N600 billion, about 33 per cent, of approved borrowing of N 1.82 trillion in the 2016 budget.
He attributed the revenue shortfall on falling oil revenue resulting from attacks on oil and gas installations in the Niger Delta. "The 2016 budget performance is reflective of the low revenue attributable to the global and domestic developments earlier highlighted. "Oil revenues fell significantly in the second quarter compared to the first quarter as a result of increased oil pipeline vandalism and production shut-ins. "Non-oil revenue also declined compared with forecasts in the budget due to the slowdown in economic activities and the acute shortage of foreign exchange," Udoma said.
Providing insight into the federal government's expenditure for the year, he disclosed that N2.123 trillion had been spent by the government.
Total capital expenditure at the end of June, according to the minister, stood at N331.58 billion, of which personnel cost was fully met.
He put personnel cost at N891.31 billion, even as he stated that debt service gulped N598.63 billion while statutory transfers were put at N175.68 billion.
On the government's overheads, Udoma put the figure at N125.4 billion, just as pension and gratuity got N79. 18 billion. "Government's focus is to ensure quality of expenditure. Capital releases are based on priorities. MDAs' performance as well as value-addition to the immediate needs of the economy," the minister said about the administration's policy on capital expenditure.
In achieving the objectives, Udoma said the federal and state governments alone would be unable to bring about the desired results.
He called on the private sector to play a pivotal role in the government's diversification efforts at transforming the economy from the current dependence on oil.
The federal government, he added, was reviewing the tax waiver policy, adding that after the review, more tax revenues would be generated thereby increasing non-oil revenue.
Meanwhile, the Central Bank of Nigeria's (CBN) foreign exchange trading platform - FMDQ OTC Securities Exchange - has asked banks to disclose all their naira transactions, including those done with customers that weren't previously booked, as the regulator eases its grip on the currency and tries to attract inflows.
"Banks should update all trades irrespective of the exchange rate," the Chief Executive Officer of Lagos-based FMDQ OTC Securities Exchange, Mr. Bola Onadele, said in an e-mail sent to dealers, according to Bloomberg.
It added: "The CBN is very interested in credible price formation for the spot foreign-exchange market. It is also imperative for price discovery and liquidity assessment of our market, which are key to activate foreign portfolio investment flows."
Banks should publish all their so-called "off-line trades" on its trading system "within 30 minutes of execution of such transactions," FMDQ said in a separate e-mail to dealers.
During trading yesterday, the naira shed N2.41 on the interbank market, closing at N309.84 to a dollar, compared with the N307.43 to a dollar last Friday.
But the naira remained unchanged on the parallel market where it closed at N378 to a dollar.
Nigeria has struggled to attract investors to its bond and equities markets since devaluing the naira by 30 per cent on June 20, ending a 16-month peg of N197-N199 per dollar.
Investors were concerned the central bank was still controlling the exchange rate.
However, the Special Adviser on Financial Markets to the CBN Governor, Mr. Emmanuel Ukeje, in an interview at the weekend assured investors that the worst was over for the naira.
Culled from: http://www.thisdaylive.com/index.php/2016/07/26/fg-records-55-per-cent-half-year-revenue-shortfall/
Forex restrictions adversely affected economy, FG admits
July 27th, 2016
The Federal Government on Monday lamented that the foreign exchange restrictions by Central Bank of Nigeria (CBN) in the first half of this year adversely affected the economy.
In a bid to shore up the value of the naira, the apex bank had in June last year restricted the importers of 41 select items from accessing the official foreign exchange window.
But the Minister of Budget and National Planning Udoma Udo Udoma, who spoke at the stakeholders' consultative forum on the 2017- 2019 medium term expenditure framework held at the Banquet Hall of the State House in Abuja, said the CBN policy did not work in the best interest of the economy.
He also listed oil production disruptions in the Niger Delta, low oil revenue, low power generation, fuel supply problems in the first quarter and insurgency, as activities that negatively affected the economy.
Udoma said inflation hit 16.5 percent in June; unemployment increased to 12.1 percent in March from 10.6 percent in December 2015 and created challenges for some state governments in paying salaries, in addition to the Federal Government giving bailout to states.
The consultations for 2017 to 2019 medium term expenditure framework and fiscal strategy 2017 to 2019 is in keeping with the dictates of the Fiscal Responsibility Act and the final draft is the material upon which those years' budget would be based.
The Federal Government has projected a modest revenue of N7.4trillion as distributable revenues next year, but the exact amount for next year's budget, Udo Udoma said, is expected to be ready before members of the National Assembly resume from their recess in September.
Non-oil revenue receipts for the next three years Udoma said, are expected to increase significantly due to a gradually recovering domestic economy; a projected increase in consumption and the government's expected improvement in FIRS tax collection efforts, especially with respect to broadening and strengthening of the tax net.
Navy launches Operation Tsare Teku II to check pirate attacks on ships
July 26th, 2016
The Nigerian Navy on Saturday deployed 10 war ships in a massive operation aimed to stop pirate attacks on local and international merchant ships on the nation's waterways.
The Chief of Naval Staff, Vice Admiral Ibok-Ete Ibas, spoke at the launch of the operation, codenamed: "Tsare Teku II," in Onne, Rivers State.
Ibas said the operation would also contain high spate of attacks by oil thieves on critical oil and gas installations and other criminalities prevalent on the nation's territorial waters.
He said Tsare Teku II was a continuation of an earlier operation it launched in the first quarter of 2016 to tackle incessant attacks on merchant ships.
He said, "Between January 1 and April, pirates and oil thieves carried out 30 attacks on our waterways, which 16 of these attacks were successful. "Since the first phase of this operation was launched to protect ships, there have been less than seven attacks on the sea, with only one pirate attack being successful. "This reduction was largely achieved by intensive patrols by navy vessels, which covered about 2,280 hours at sea focused to stabilising the maritime environment. "To this end, we felt the need to extend the operation with focus to sustaining the protection of shipping and oil and gas installations particularly in high risk prone areas."
Ibas said the operation became expedient in order to inject new tactics and robust operational initiative to tackle the merging security challenges in the Niger Delta.
He added that the operation would enable merchant ships move their cargoes freely, which according to him, will improve economic activities and revenue for the country.
The navy, he said, would soon take delivery of "many gunboats" to complement 30-newly built gunboats it recently deployed to waterways and creeks in the Niger Delta.
According to Ibas, the navy is ready to partner with investors to upgrade its naval dockyard and shipyard while improving other key facilities.
He said, "We urge state governments to assist the navy by sensitising coastal communities in their states on the need to protect critical oil facilities in their domain. "It is equally important that other coastal states that are yet to regulate the use of high capacity outboard engines should do so because these engines are used to perpetrate crimes."
Ibas advised ship owners and charterers to vet and profile their crew members before recruitment.
Ibas also appealed to agitators in the Niger Delta to seek peaceful ways to press home their demands.
Naira devaluation good for ports, says NPA MD
June 27th, 2016
Revenue from Nigeria's ports may beat initial estimates this year after the country abandoned a peg on the naira in favour of a more flexible, market-driven exchange rate policy to alleviate dollar shortages that had been hurting businesses.
"By floating the naira and appointing primary dealers that are going to make dollars available, people can continue their businesses, which is good for the ports," the Managing Director of Nigerian Ports Authority (NPA), Mallam Habib Abdullahi, said while speaking in an interview with Bloomberg.
"Once the economy is moving, I will get much more," he said, referring to NPA's 2016 earnings projections.
Cargo traffic at Nigerian ports declined 9.6 per cent to 78.3 million metric tons in 2015 as importers struggled to obtain foreign exchange due to capital controls and oil prices slumped, the NPA said in April. The agency cut this year's expected revenue to $1.2 billion compared with $1.8 billion realised in 2015, owing to "challenges" facing the ports, Abdullahi said.
The Central Bank of Nigeria allowed the currency of Africa's biggest economy to float freely on Monday last week following a June 15 announcement that it would let a market-driven exchange rate alleviate the dollar shortage that has strangled companies and contributed to the contraction, for the first time since 2004, of the gross domestic product during the three months through March. The naira gained 0.7 per cent to 280.50 per dollar as of 11.28 a.m. in Lagos on Tuesday after declining 29.6 per cent on Monday.
The new foreign-exchange policy, "may cause naira volatility but it will eventually stabilise," the NPA Managing Director said.
He however said that the government must find a solution to the restiveness in the key oil and gas-producing Niger delta region.
He said the ports have been positioned to support the nation's export drive.
"We want people to be able to export solid minerals easily which will help diversify the economy," he said.
Culled from: http://shipsandports.com.ng/naira-devaluation-good-for-ports-says-npa-md/