Monday, 7 January 2013

Sunglasses.com.ng Redefines Online Marketing

As the campaign for cashless economy gathers momentum, more business organisations are promoting online business transaction in Nigeria to simplify buy and sales through non-store retailing marketing.
The latest in the Nigerian market to key into the development is sunglasses.com.ng and glamour.com.ng, owned by Startup Partners Africa.

The company’s initiative is coming on the heels of the rate the social media is catching the attention of many people and with internet penetration growing by 16.1 per cent in 2011.

Startup Partners Africa, a successful e-commerce company in Nigeria, is specifically involved in Glamour – cosmetics, sunglasses and glasses of different types as customers can buy the firm’s products from the comfort of their homes and the products will be delivered to them at no extra cost. Some of the brands of its glasses include Ray-ban, Oakley, Carrera, Boss Orange, D&G, Fossil and Prada.

According to the promoters of the company, what perhaps makes the firm’s offering significant is that the customer can pay at the point of delivery or through POS.

Speaking on the online shopping platform recently in Lagos, the CEO of Startup Partners Africa, Jaime Moreno, Spanish, said customers don’t need to spend hours on traffic or travel to far countries like Dubai, Paris or UK to buy cosmetics or pair of sunglasses and reading glasses.
He said; “You can buy from your home at the company website and it will be delivered to the customer within short possible time and you pay on delivery”.

The CEO further stated that the firm’s website was sophisticated but simple and easy to navigate as it would provide clear pictures of what customers wanted. In addition, he added that there exists opportunity for customer to interact with client service on the site.
On sunglasses, Moreno said the company also offers sunglasses, glasses and contact lenses. “If someone in Port Harcourt or elsewhere needs glasses the customer can put his specifications from his optician on the website, the glasses will be delivered to him based on his prescriptions. On the sunglasses, the websites provides platform for clear viewing and even chatting with the office on recommendations,” he said.

On the cost of the company’s products, he pointed out that there are glasses that attract as low as N5,000. “We offer European quality for less amount of money in addition to home service delivery which is value added’ he said. According to him, the potential in Nigeria is enormous and Nigerians are becoming brand savvy and they see trend and want to follow it.

It is believed that increasing internet penetration and the Central Bank of Nigeria (CBN) continued effort to sustain the country’s transition into a cashless economy are part of factors driving the non-store retailing.

NLC Charges Govt on Visible Industrial Policy

The Nigeria Labour Congress (NLC) has charged the Federal Government on sustainable industry policy that will create opportunities for real sector growth and employment creation.
President of NLC, Abdulwaheed Omar, who made the call in Abuja, said the growth of the real sector is dependent of visible industrial policy even as he urged government to decisively tackle the menace of high cost of governance and pervasive corruption in the country.
Omar, who expressed concern over the increasing level of poverty in the land, maintained that the present economic growth does not translate into industrial development and better life for the Nigerian people.
According to him, the economy continues to experience incessant factory closures, and with no visible industrial policy, has led to continuous informalisation of work and de-industrialisation. He added that unemployment has continued unabated while hyper-inflationary pressure, which has been most severe in the food, energy and transport sub sectors have impoverished majority of Nigerians.
He recalled that the economy, in 2012, was characterised by a number of maladies, with dire consequences for workers and the Nigerian people. Specifically, he explained that the crisis of unemployment has continued to be the greatest challenge facing the country.
“Official statistics puts the unemployment rate at above 24 per cent. As alarming as this would seem, it actually disguises the enormity of the unemployment problem given the huge pool of disguised unemployment and underemployment. The incidence of unemployment among the youths is even more alarming. Though official figures indicate over 40 per cent of them as unemployed, the reality is that about 60 per cent of youths remain unemployed.
“The underlying inflation in the economy has also continued to erode the purchasing power of workers’ incomes, making the N18,000 Minimum Wage largely a poverty wage. Aggregate inflation, which officially stands at 11.7 per cent in the third quarter of the year, might be misleading as the fuel price hike in January, the increase in electricity tariffs and the floods in the third quarter of the year that have been major culprits driving inflation, have largely disempowered working families,” Omar said.
He said the challenge is for government to promote employment generating growth so as to break away from the malady of jobless growth and evolve a sustainable industrial policy rather than throw up figures that are not in tandem with present day realities.

N196.5bn generated from retail operations in 2012 – NNPC

The Nigerian National Petroleum Corporation has said it generated a sum of N196.5bn from its retail outlets in 2012.
However, the impressive revenue profile was dwarfed by the enormous value of investments made in the establishment of the outlets.
According to the corporation, a total of N192.55bn was spent on the operation of the retail outlets across the country during the year.
The details were contained in the ‘NNPC 2012-2015 strategic plan and 2013 budget,’ presented to the National Assembly recently and awaiting consideration.
Although the corporation had projected a total revenue profile of N188.32bn, it actually realised N196.45bn during the year under review.
In the same vein, while it projected total operational expenses of N168.6bn and a capital expenditure of N6.92bn, it ended up with a total of N187.5bn and   N5.05bn, respectively.
The calculations showed that in weighing the revenue realised from retail outlets against the expenditure, the corporation only boasted a balance of N3.88bn, as shown by its financial performance for the year.
For 2013, the corporation has, however, projected total revenue of N290.81bn, with a corresponding gross expenditure of N278.96bn.
According to NNPC, the increases in the revenue and operational expenses, compared with the earlier projections, are “as a result of the upward review of Premium Motor Spirit pump price.”
It noted that only N5bn performance was achieved in its capital expenditure, which was projected at N6.92bn, due to the fact it did not spend the first quarter allocation because of late passage of the budget.
The corporation also gave details of its sales volume from the retail outlets, noting that a total of 1.97billion litres were sold during the period under review, against the 2.5 billion projected at the beginning of the year.
Giving reasons for the shortfall in retail sales volume, the corporation reported, “Sales volume planned was based on three additional mega stations and five standard stations, which are yet to be completed. Only six out of the 12 floating stations are operational. Reduced sales volume in 2012 was as a result of rationalisation of affiliate stations.”

FAAN denies borrowing $500m to acquire 30 aircraft

The Federal Airports Authority of Nigeria has denied that it borrowed $500m from China to acquire 30 aircraft for domestic airlines.
It was widely reported last week that FAAN had borrowed $500m to acquire aircraft to help ailing domestic airlines to re-fleet.
However, the General Manager, Corporate Communications, FAAN,  Mr. Yakubu Dati, in a statement on Sunday said, “FAAN has not borrowed $500m from China or any country for that matter.
“FAAN is a service provider in the industry and it is presently preoccupied with translating the transformational aviation master plan into concrete realities.”
According to him, the reorientation of aviation employees is being vigorously pursued through capacity development.
Besides, he said the agency’s Managing Director, Mr. George Uriesi, had been busy spearheading the paradigm shift towards service delivery, accountability and self-sustenance.
However, Dati said the Ministry of Aviation was making arrangements to facilitate the acquisition of 30 airplanes to boost the operations of domestic airlines.
According to him, the modalities are being fine-tuned to checkmate the abuse of the Aviation Intervention Fund.
He said, “This strategy will plug the loophole that allows fortune seekers free access to this fund. Some airports have been designated as agro-allied and cargo terminals to promote investment and make them self-sustaining.
“In the area of safety and security, modern security equipment have been procured, following a comprehensive security threat and vulnerability assessment.”

DPR indifferent as filling stations continue cheating customers

Despite repeated threats of punishment by the regulatory agency, petroleum product marketers and depots in the country have continued to cheat consumers by selling above regulated prices and under-dispensing products.
In what many market watchers see as indifference on the part of the Department of Petroleum Resources, the filling stations seem to have perfected the art of short- changing customers by capitalising on the inadequate supply of products, especially petrol, which became apparent in the last quarter of 2012.
Filling stations in most states of the federation are currently selling petrol above the N97 per litre that the Federal Government pegged the price after last January’s protest against the removal of subsidy on the product.
Before now, Lagos and Ogun states appeared to be insulated against the sale of petrol above the official price, but findings by our correspondent on Saturday and Sunday showed that most filling stations in both states were now openly selling above N97 per litre.
In both states, as indeed other parts of the country, the product is now being sold at prics ranging from N105 to N120 per litre.
Our correspondent, who drove into a filling station along Ikotun road, Lagos on Sunday afternoon, was informed before buying the product that the price was N105 per litre, though the dispensing machine still displayed the regulated price of N97.
A consumer in Oke-Afa, Isolo, Lagos, narrated his experience to our correspondent on Saturday, “I drove into the filling station opposite my estate to buy petrol for my generator. When I told the attendant that I wanted to buy N1,500 worth in a 25-litre keg, she told me I would pay N100 extra and I consented, but what she sold barely passed the quarter of the keg.
“Ordinarily, the content of the keg should be above half even if as they usually claim, the keg can hold five litres extra because of expansion. I complained to the station manager and he was just giving excuses about attendants not being honest.”
Some oil marketers, who spoke to our correspondent on Sunday, however, blamed the malpractices on poor enforcement of directives on the side of the DPR.
They said most of the filling stations that indulge in the act of selling above the official price and under dispensing to customers had been doing so for a long time, while the regulator was turning a blind eye and pretending not to notice.
Our correspondent also gathered that the average ex-depot price of petrol per litre at Apapa, Lagos, as of Friday, was N96, a trend that had continued for months.
A marketer, who spoke to our correspondent on condition of anonymity, said DPR officials should ordinarily visit the depots and enquire why the ex-depot price had continued to soar for months above the recommended N87.90 per litre.
“There is the need for us to know why the DPR cannot make depot owners to sell petrol for N87.90 considering the over 30-day product sufficiency the Nigerian National Petroleum Corporation claims to have. This is a serious problem because some people are busy making good money at the expense of Nigerians as this anomaly continues,” he said.
However, efforts made on Sunday to get DPR officials to speak on the allegation proved abortive. An email and several text messages sent to the spokesman, Mr. Belema Osibodu, were not replied, while his telephone line was switched off.
Last month, DPR had threatened to shut filling stations found to be under-dispensing petrol to consumers, but had yet to make good its threat even in the face of glaring evidences that the station owners and attendants were milking the buyers dry.
Osibodu had said in a statement issued in response to our correspondent’s enquiry then that errant petrol stations risked being shut for 60 days.
He had said, “As a further punishment, the stations will be stopped from further lifting and sale of all petroleum products for the period that they are under seal.
“The issue of stations with adjusted pumps,, which deliver less than a litre of fuel for the price of quantity invariably leads to overpricing when the actual litre is dispensed. The consumer is, indeed, being cheated.”
According to the regulator, this is a malpractice which its officials look out for, while on routine monitoring of petrol stations across the country.
Osibodu said, “It is also one of the reasons why the public has been availed of some DPR telephone lines to enable them make reports when such cases occur, which may not be known to us.
“DPR officials go to the stations with our own meters, which are used to monitor the stations’ dispensing pumps at regular intervals in addition to checking the pumps whenever on surveillance exercises. We also do this when cases of under-dispensing are discovered or complaints are lodged with us.”
The department had in October and November 2012 sealed 96 filling stations across the country for various sharp practices, including under-delivery of products, operating without valid licences or with expired licences, compromising safety, overpricing and diversion of products.
Selling petrol above the official price of N97 per litre or adjusting dispensing pumps to sell less than a litre for the price of a litre are some of the anomalies in a market that is undersupplied with products.
This trend is also prevalent when oil marketers decide to hoard products, even when the market is adequately supplied.
The current supply problem started in August last year when the System 2B pipeline was vandalised at Arepo along the Lagos-Ibadan Expressway in Ogun State. The pipeline was shut after it caught fire as a result of activities of vandals.
The shutdown resulted in petrol distribution hitches, with states like Lagos, Ogun, Oyo, Ondo, Edo and Kwara severely affected.
With the closure, trucks that were hitherto loading at Shagamu, Ogun State had to come to depots in Apapa, Lagos to load.
Normally, NNPC pumps 11 million litres of petrol per day through the System 2B pipeline. But as a result of the shutdown, the corporation was struggling to supply about six million litres of petrol per day through private depots in Apapa.

PIB to ensure penalty for oil asset vandalism

Host communities of oil and gas resources and assets will, henceforth, be penalised for cases of vandalism if the current Petroleum Industry Bill before the National Assembly is eventually passed into law, the Nigerian National Petroleum Corporation has said.
This, according to the corporation, will be implemented through the Petroleum Host Community Fund, which will be created by legislation and will coordinate conditional participation of host communities in the petroleum industry by enforcing security of infrastructure and consequences for vandalism.
Addressing journalists in Lagos on Friday, NNPC’s Group Executive Director, Exploration and Production, Mr.  Abiye Membere, said the PIB would incorporate lessons learnt from the Niger Delta on all new frontiers and increase freedom to operate by including host communities as stakeholders.
He said the PIB would assign oil and gas infrastructure security to the host communities and minimise environmental degradation due to vandalism and crude oil theft.
“There is the flexibility to make changes depending on the existing environment; and the PIB provides environment to consult host communities widely prior to making regulations for the management of the fund,” Membere said.
Also in a fresh move, the NNPC said it had initiated new ways of reducing the high cost of operation in the oil and gas sector.
According to Membere, the corporation is working towards achieving the standardisation of processes and evaluation mechanisms for estimation of drilling and drilling services costs, using a common template across all the International Oil Companies.
The NNPC, he said, had also moved to benchmark major costs of players in the sector.
The NNPC GED said another new agency would be created from the PIB, to be known as the National Frontier Exploration Services Department.
According to him, it will be vested with the responsibility of promoting  front end data acquisition of hydrocarbons in the frontier basins in the hinterland.
When passed into law, he said the bill would deliver needed reforms within 36 months, which would be driven by a special task force on the PIB and an  implementation committee.
Listing the objectives of the PIB, Membere said it would enhance exploration and exploitation of petroleum resources; significantly increase domestic gas supplies (especially for power and industry); create competitive business environment and establish fiscal framework that was flexible, stable and competitively attractive.
According to him, it will also create a commercially viable National Oil Company, create efficient regulatory institutions; engender transparency and accountability; promote ‘Nigerian content’ and promote and protect health, safety and environment  concerns.
Membere said the draft PIB recommended a fiscal policy framework derived from a strategic national interest, with incentives for attracting sustainable investment to the region, as well as achieving the unbundling of the Nigerian National Petroleum Corporation.
“It recommends the creation of a National Oil Company that promotes indigenous operational capacity development, as well as the creation of an asset management company, and a gas market and gas infrastructure development company,” he said.
According to him, the PIB will strengthen regulatory and inspectorate institutions that promote transparency, safety, consumer rights and safe environments.
Membere added that a department in the Ministry of Petroleum Resources charged with frontier exploration services would be established courtesy of the PIB.

Thursday, 3 January 2013

Oil communities insist on physical assessment by NEITI

Oil producing communities in six states of the country have called for physical allocations and statutory disbursement audit of the extractive industry from 2007 to 2011 by the Nigeria Extractive Industry Transparency Initiative (NEITI).  They said this would enable the auditors have firsthand knowledge of what is on ground in the communities.
In a press statement signed on behalf of the communities by Chief William Igere (Delta State), Pastor MaacPherson Kurobo (Bayelsa State), Chief Harry Opaks (Rivers State); Saviour James Okon (Akwa Ibom State), Princess Nomwen Uhunmwunagho (Edo State) and Comrade Samuel Ebiwanno (Ondo State), they  emphasised that  it is illegal and unconstitutional to pay 13 percent Derivation Fund to any state government account.
“This illegal and unconstitutional payment of 13 percent Derivation Fund through the state governments has left the actual oil and gas producing communities in abject poverty. The state governments which received this money illegally used the fund to develop their state capitals and non oil and gas producing communities, leaving the actual oil and gas producing communities in hunger and penury.
“In the light of the above, we therefore appeal to NEITI to interface with the oil and gas producing communities in their audit and investigation of the 13 percent Derivation Fund. We wish to affirm in very strong terms that any report or audit investigation without physical visit to the communities hosting oil facilities is unacceptable to the communities,” they posited.
The community leaders noted that the physical visit of NEITI to the communities would enable the organisation ascertain the level of environmental degradation, health hazards, pollution, poverty and hunger, heightened by massive unemployment among the youths of the oil and gas producing communities.
They also expressed appreciation to all institutions they wrote letters to on the 13 percent Derivation Fund disbursed through the federation  account to the producing states including Chairman, Revenue Mobilisation Allocation and Fiscal Commission, Engr. Elias Mbam, who confirmed that the 13 percent Derivation Fund belongs exclusively to the oil and gas producing communities and not the state governments.
The group equally commended President Goodluck Jonathan for directing the audit of all oil revenues including the 13 percent Derivation Fund disbursed through the Federation Account to ascertain the utilization of the fund and also NEITI for its preparedness to carry out the directive of the President on full audit and investigation of the 13 percent Derivation Fund early in January 2013.
“Above all, our gratitude and appreciation goes to our National Leader Chief. (Dr) E. K. Clark for setting the record straight in its massive press statement affirming the position of the Chairman Revenue Mobilization, Allocation, and Fiscal Commission that 13 percent Derivation Fund belongs exclusively to the oil and gas producing communities. They went further to advice the Federal Government to stop the payment of the Derivation Fund to any state government saying it was unconstitutional. He also advised that the Derivation Fund should be directly paid to the oil and gas producing communities through administrative committee” they added.
In their letter to the Executive Secretary NEITI, dated 19th November, 2012, the communities restated that the legal position is that the 13 percent Derivation Fund was not part of any consolidated revenue to any tier of government nor part of state/local government joint account as 13 percent Derivation Fund is the first charge on the Federation Account as provided in Section 162 (2) of 1999 constitution of the Federal Republic of Nigeria. “13 percent Derivation Fund was prior to any revenue formula. We insisted that 13 percent Derivation Fund exists before any revenue formula or revenue sharing by the Federation Allocation Committee (FAAC),” they said.
It would be recalled that NEITI had confirmed its readiness to facilitate the immediate commencement of the Physical Allocations and Statutory Disbursement Audit of the extractive industry from 2007 to 2011 in line with the decision of the Federal Executive Council (FEC) at its November 28, meeting.

NSE value gains N68bn to end year positively

Specifically, the market capitalisation of 187 first-tier equities appreciated by 0.76 per cent to close at N8.97 trillion from N8.90 trillion.
Another key indicator, the NSE All-Share Index also gained by 0.76 per cent to close at 28,078.81 points as against 27,866.51 points recorded last Friday.
The NSE rose to a 32-month high on Monday, ending the year up 34 percent in the index’s best performance since 2007, led by growth in the consumer goods and banking sectors which is expected to continue next year.
Nigerian stocks recovered after falling 16 percent last year but the market is still less than half the value it was prior to the 2008 collapse, which wiped off 60 percent of stock values and coincided with a banking crisis. The index rose 70 per cent in 2007.
30 equities recorded share price gains on Monday as against 25 recorded last Friday; while, 10 equities recorded share price losses as against 11 losers recorded in the previous trading day – suggesting a positive market breadth.
Airline Services and Logistic Plc recorded the highest share price gain, appreciating by 10 per cent to close at N4.18 per share from N3.80. This was followed by First City Monument Bank Plc gaining 8.70 per cent to close at N3.75 per share and Julius Berger Nigeria Plc rose by 5.00 per cent to close at N34.65 per share.
On the other hand, Vitafoam Nigeria Plc topped the losers’ chart, depreciating by 3.17 per cent to close at N3.66 per share from N3.78 per share. This was followed by Continental Reinsurance Plc that dropped 2.56 per cent to close at N0.76 per share and Custodian and Allied Insurance Plc lost 2.26 per  cent to close at N1.30 per share.
No trading took place on Tuesday as a result of New Year break.

FG to hire 1,000 inspectors to monitor Weights & Measures policy

The Federal government has concluded plans to hire 1,000 inspectors (field officials) to police its weights and measures policy across the country, which is meant to ensure accuracy in weighing and measuring in Nigeria.
Engr. Mohammed Sidi, Acting Director Legal Metrology, Weights and Measures Department of the Federal Ministry of Trade and Industry, who disclosed this while fielding questions from journalists recently in Abuja, said that a thousand inspectors (about 28 inspectors per each state of the federation including Abuja) are needed for effective monitoring and compliance to the laws by businesses across all sectors of the economy.
“From a consumer’s perspective, a kilogram of rice must be a kilogram and no less; a motorist needs to trust the volume delivered by a petrol pump; and mobile telephone user need to trust that one minute airtime must be one minute and no less,” he said.
He explained that the inspectors’ will be guided by metering standards puts in place by the International Organisation of Legal Metrology (OIML) based in Paris.
“Nigeria and most nations are members of this body and one of its functions is to verify and certify national base standards at regular interval.
“These are kept in turn by the weights and measures depart of the ministry. From the base standards other standards of prescribed tolerance are derived, maintained and verified at regular intervals as prescribed by the weights and measures ACT.  This is why it is assured that a certified weights and measure of any magnitude in Nigeria will be the same in other parts of the world,” he said.
He explained that accurate measurement otherwise known as Legal Metrology is very vital in ensuring that all trade transactions in all sectors of the economy are accurate, fair and legal in line with international best practice, and also provides protection of public safety, the environment, consumers and traders.

FG to save N300bn annually from cassava flour – Maku

The Federal Government will save about N300 billion annually from importation of wheat through the use of 20 per cent cassava flour in bread production.
Minister of Information, Mr. Labaran Maku, stated this on Monday at a news conference in Abuja, while briefing newsmen on the achievements of President Goodluck Jonathan’s administration in 2012.
Maku said the amount spent on wheat importation had so far been brought down by N200 billion following the improvement in the production and processing of cassava flour. He said the government was exploring agriculture as major area to create jobs and wealth generation.
The minister said that the transformation that had taken place in the sector in the last one year was aimed at ensuring food security, curbing importation and diversifying the economy.
According to him, the “Growth Enhancement Scheme’’ initiated by the Minister of Agriculture was designed to support small scale farmers to enable them get access to fertilisers and seeds directly at affordable prices. He said that the introduction of the “Electronic Wallet System’’ (e-Wallet) for the distribution of fertilisers to farmers was aimed at eliminating corruption.
“Nigeria is the first country in Africa to launch the e-Wallet system for the distribution of subsidised agro-inputs to farmers. The focus is also to check corruption in fertiliser and seeds distribution to farmers, strengthen commodity and input market and start up staple crop processing zones across the country,” he said.
Other achievements in the sector, he noted, include the ‘Cassava Transformation Programme’ aimed at making the country the largest producer and processor of the product in the world. “The ministry is expanding market for cassava through the development of high quality cassava flour to substitute 40 per cent of wheat importation into the country,” Maku said.
The minister said that market had been secured for 2.2 million metric tonnes of dried cassava chip in China, adding that one million metric tonnes of cassava chips were already on the way to that country. On rice, he said that the programme being implemented in collaboration with the private sector was to achieve self-sufficiency in rice production by 2015.

2012 in review: For Trade & Investment sector, it’s 50-50

This report highlights some of the positive and negative development in the Trade and Investment sector of the economy over the last 12 months, and stakeholders’ expectations for 2013.
New investments
The Minister of Trade and Investment, Olusegun Aganga, look back and said that the problem of insecurity didn’t stop the flow of new investments into the country as $8.9 billion foreign direct investment was recorded during the year under review.
“The sector made significant achievements within the last one year. In terms of investment inflow, at least 30 per cent of the investments coming into Africa come to Nigeria, which makes the country number one investment destination in Africa. But what makes this very important is that it does not include oil and gas investment, it is in the real sector of the economy,” he said.
Ease of doing business
Similarly, the country was rated 6th best place among top ten countries with favourable investment climates for small businesses to thrive.
The result came from a survey of more than 24,000 people across 24 countries.  It was conducted for the BBC by the International survey firm Globascan together with International Policy Attitudes at the University of Maryland, U.S.A.
The report said that corruption, notwithstanding, Nigeria is the 6th most favourable place for entrepreneurs to start business.
The survey ranked Indonesia first most favourable country for entrepreneurs, followed by United States of America, Canada, India and Australia and Nigeria
Alhaji Bello Mahmud, Registrar General of the Corporate Affairs Commission, attributed this feat to the Commission’s investment in ICT infrastructure.
“As you are aware, CAC is charged with the responsibility of registration of companies, business names and incorporated trustees.  ICT infrastructure ensures greater efficiency of the system and high data integrity.  In order to actualize its ICT thrusts, the Commission embarked on a total upgrade of its WAN from VSAT –based network to a more reliable fiber based system this was meant to improve availability and also enhance transactions.”
Success story in cement sector
In his own assessment, Engr. Joseph Makoju, Chairman, Cement Manufacturers Association of Nigeria (CMAN), said: “This year 2012 is the year when as a result of the 2002 Federal Government’s backward integration policy in cement production, we have seen installed local cement production capacity rise exponentially from 3.0 million metric tons per annum in 2003 to 18.5 million metric tons per annum with another 12 million metric tons expected from the expansion and new plants currently under construction across the country by the manufacturers.”
This, he said, has moved the country from the position of the world’s leading importer of cement in 2006 to a position of not only self sufficiency today but indeed potential net exporter of the product.
Alhaji Aliko Dangote, President of the Dangote Group, noted: “With this achievement, the era of cement importation into the country is over as we now have capacity to surpass local demand. In 2011, the total national demand for cement was 17.0 mmtpa. The current combined capacity of Dangote Cement plants alone is over 20 mmtpa and total installed local production capacity now stands at 28.0 mmtpa.
“In fact, we are currently engaged in converting our import terminals to export terminals in readiness to export our excess capacity in cement to neighbouring West African countries, where there is a cement deficit. I am delighted that Nigeria is today transforming from being one of the biggest importers of cement in the world into an exporting nation, within a short while,” he said.
New electricity tariff
Moving away from the positive side, conversely, the year was challenging for manufacturing companies as a result of the newly introduced electricity tariff; high level of smuggling and multiple taxes.
During the year under review, industries across the country felt the negative impact of the new electricity tariff which they say eroded their profits margin as operating cost increased by 440 percent. The new tariff was introduced in June 2012 by Nigeria Electricity Regulatory Commission (NERC).
According to the Managing Director of Alind Nigeria Limited, a private limited company based in Bauchi, before June 2012, the company was classified as 03 (industrial) for tariff classification and paid a fixed charge of N43, 471 and an average monthly electricity bill of N110, 000. However, after the introduction of the new electricity tariff in June, 2012, their classification moved to D4, and they now pay a fixed charge of N106, 000 and an  average electricity bill of N212, 231, representing 143 percent and 93 percent increases in the fixed charge and average electricity bill, respectively.
Multiple taxes
The Chairman, Manufacturers Association of Nigeria, Ogun State Branch, Dr. Dolapo Ogutuga, commented on the menace of multiple taxes during the year:
“On continuous basis, local government councils, regulatory agencies of government came out with one form of taxation, levies or charges which stalled operations of factories to a near halt. The year was also challenging for the manufacturing due to security challenges caused by the Boko-Haram sect. The effect of this development is that supplies of product to the Northern states were adversely affected. This affected the manufacturing business in the country as companies had to maintain higher inventories,” he said.
Expectations for 2013
Concerning stakeholders’ expectation for 2013, Chief Kola Jamodu, President of Manufacturers Association of Nigeria, said they would like to see new manufacturing investments spring up and some old manufacturing plants revived this year. In 2012, President Goodluck Jonathan commissioned some new manufacturing investments in Lagos, Ogun, Imo, Rivers, Enugu and Anambra states.  This is a welcome development for the manufacturing sector and I look forward to seeing more of such happening in all states of the federation soonest.”
He said that the stakeholders also wants long term loans at lower single digit interest rate and zero percent duty on all manufacturing machinery and equipment to facilitate retooling and replacement of obsolete parts; the recent increase in the price of electricity tariff, LPFO, AGO should also be addressed including downward review of corporate tax to 20 percent and removal of VAT on raw materials,” he said.
So far, now that the achievements and challenges recorded in the outgoing year have been juxtaposed, how would you rate the performance of the sector? Perhaps, the performance is 50, 50.
In the words of Mr. Yinka Akande, Director General of Manufacturers Association of Nigeria, not all is negative about Nigeria; there are a lot of good things happening in the economy. It’s high time we amply our successes and downplays the negatives.  Let’s stop being negative as opinion molders. This is the only way to build confidence in the economy.”

Agric sector offers N400bn potential interest income to investors

The agricultural sector in Nigeria offers potential interest income of N400 billion to banks and other investors, said Minister for Agriculture, Dr Akinwunmi Adeshina
Speaking at a workshop on financing the Agricultural Revolution organised by the Securities and Exchange Commission (SEC), Adeshina said, “There are great opportunities to unlock together the agricultural potential of our great nation. We must create innovative financial instruments to address the needs of the agricultural sector, considering the different needs along the agricultural value chains.”
He said, “An assessment of the potential for agricultural lending in Nigeria shows promising results. As we embark on a structural change of the labor composition of the agriculture sector, we are developing a new generation of 760,000 young commercial farmers for Nigeria – called Nagropreneurs. Their working capital requirements alone presentan opportunity to increase bank lending by about 3 Trillion Naira. This is a potentially lucrative opportunity for forward looking financial institutions.
“The key to unlocking this opportunity is for such forward looking financial institutions to invest in developing systems to cost effectively and efficiently reach these customers, while working with partners to address some of the risks associated with lending to the agricultural producers.  The rewards for such a financial institution would be great. The interest income from lending to this market, for just 10 strategic crops, is estimated to be over 400 Billion Naira.
“There is need to realign the banking and finance sector to lend more to agriculture. Unfortunately, Nigerian banks are yet to harness this potential. In 2005, agricultural lending was only 2.44% of commercial banks total portfolio. This declined to an all-time low 1.37% in 2008.
To effectively deploy capital to the sector,the finance industry needs to be motivated by high expected returns relative to the risk and uncertainty. Public sector strategies and programs can be critical in facilitating this tradeoff.
The Federal Ministry of Agriculture understands that to expand financing in agriculture, we must first get the sector to work. Government policies that drive profitability and growth of the sector, and private sector investments, are the prime drivers for agricultural transformation. If government policies unlock the value of agriculture, and we fix the agricultural value chains, banks should be able to find a money trail and lend more to agriculture.
“Public equity capital markets should play stronger roles in financing the agricultural sector. Despite the strong performance of agriculture stocks, the sector still represents less than 1 percent of the over 40 billion dollar market capitalization on the Nigerian Stock Exchange. And only 5 of the 199 listed stocks are from the agricultural sector.
“Consumer food and beverage stocks like Nestle and Nigerian Breweries represent the lion’s share of the exchange at 33 percent. They are poised to keep growing, given that both stocks experienced all-time highs of NGN 710 and NGN 153 respectively, just two days ago.
“The opportunities for these companies to boost agriculture are immense, if they move into greater use of locally produced crops. Imagine if the likes of Nestle used cassava starch instead of corn starch and Nigerian Breweries used mostly sorghum instead of barley. The spillover effect on the agriculture industry will be immense.”

Contributions of seafarers to the global economy

ON behalf of the Secretary-General of IMO, it is indeed a honour and privilege for me to be with you today in this wonderful, vibrant city of Lagos, and to have the opportunity during the celebrations of the World Maritime Day on the “Year of the Seafarer,” to address for the second time today, on the topic “Contribution of Seafarers to the Global Economy.”
The issue of seafarers and consultation among key stakeholders in the shipping industry will, I believe, become the biggest challenge that the industry will, I believe, become the biggest challenge that the industry and all those connected with it will face over the coming years.
I would like to begin by congratulating the organisers, the Federal Ministry of Transport, it agencies and stakeholders, for their initiative and for their efforts in bringing this forum together.
To talk about the contribution of seafarers to the global economy, we need to, first, define “Globalisation,” which may mean different things to different people. For some, it is the culprit of poverty and war, for others, globalisation is a requirement to economic development for a growing world population.
For the maritime industry, it is simply a concept that describes a trend in international trade. It means:
• That trade is growing faster than the world’s Gross Domestic Product, and
• That this trade is not only in finished goods and services, but increasingly in components and services that are used within globalised production processes. Maritime transport is growing because it is required to move traded goods and components, and trade in maritime services it itself also taking place on an ever more global scale.
At the same time, maritime business itself is probably the most globalised industry. Most maritime transport provided between two or more countries, and the service providers no longer need to be nationals of the same countries whose cargo they move.
In fact, a simple commercial transaction may easily involve people and property from a dozen different countries, e.g. a Greek owned vessel, built in Korea, may be chartered to a Nigerian operator, who employs Philippine seafarers via a Cypriot crewing agent, is registered in Panama, insured in the UK, and transport German made cargo in the name of a Swiss freight forwarder from a Dutch port to Argentina, through terminals that are concessioned to port operators from Hong Kong and Australia. To complicate matters, the vessel could end up being held by Somali pirates! International standardisation, an important component of globalisation in general, also affects shipping.
Thanks to containerisation, any liner shipping company from anywhere in the world can now easily enter new markets and provide its services globally. Equivalently, international operator are now in a position to take a concession of a container terminal in any port of the world, suppliers of port and ship equipment produce and sell globally, and ISO’s and IMO’s standards concerning quality, safety and training apply equally on all international waters. Any discussion of the impact of globalisation on maritime business will be incomplete if the human element (seafarer) is not included.
I am sure that many of you are former seafarers, who may still have a very strong affinity with all those, who go down to the sea in ships and on whom we all rely to a very large extent indeed. To this end, I would like to highlight the important service that a seafarer carries for the benefit of mankind – a service that has never been readily recognised.
As you are aware, more than ninety per cent of the world trade is carried by ships and these ships are manned and operated by seafarers. Hence it can be safely said that ninety per cent of mankind’s needs are being served by directly or indirectly by seafarers. This being the case, we could safely conclude that about 1.5 million seafarers cater to the needs of ninety per cent of over seven billion persons in this world. I may be wrong, but I am yet to find a parallel where so few have served so many. Yet, God forbid if there is an accident, then it is the same seafarer, who is vilified and in a growing number of cases criminalised for something, which may not be negligence. In such cases, the poor seafarer is in a situation where instead of the normal adage – innocent until proven guilty, it is taken for granted that one is guilty until proved innocent. I think the time has come for the world to stand up and recognise the valuable services being rendered by the seafarers and to honour them accordingly.
Furthermore, the civil society is generally unaware of the important role played by the shipping industry in their day to day life. They seem to be blissfully unaware that without shipping there would be virtually no international commerce and, as a result and to use the phase of the secretary-general of IMO, “One half of the world would starve while the other half would freeze.”
The only time they become aware of the shipping industry is after a maritime accident – where a bird covered with oil on a polluted beach is flashed all over the newspapers and the electronic media. Hence, before going into further aspects for the development of the seafarer, I would appeal to one and all here to project a positive image of the industry that has a good track record and a good story to tell – one that contributes significantly to global and sustainable prosperity by carrying the overwhelming majority of world trade safely, securely, efficiently and at a fraction of the environmental impact of other modes of transport.
We should not miss a single opportunity to raise the profile of shipping as a vibrant industry, which, in keeping with its corporate social responsibilities, provides rewarding, stimulating and long-term career prospects. In so doing, we should focus not only on ensuring that politicians and the general public are better informed of shipping’s great value to the international community, but also on promoting a career at sea and the variety of opportunities it offers among the children and young people in schools and universities all over the world.
Manpower shortage
For quite some time the major part of the world trade has been carried by ships. In fact today, more than 90 per cent of the international world trade is carried by ships. These ships are manned and operated by seafarers.
However, the supply of seafarers in sufficient numbers continues to cause concern, in particular when set against the unprecedented rise in orders for new buildings. The BIMCO/ISF manpower study of 2005 estimated a shortfall of 10,000 officers or a 2 per cent of the total workforce and projected that this shortfall would increase to 27,000 or about 6 per cent of the total workforce. The study, of course, did not take into account the recent unprecedented rise in orders for new buildings.
This shortage is exacerbated by the apparent reluctance of young people to join the ranks, take on higher duties or, even more importantly, to remain in service. This coupled with recent unhelpful legislation and practices, which have the potential to discourage them to do so, continues to be a challenge for all of us.
It is no exaggeration to say that manning, training and all the other aspects of the human element in shipping are central to many of these issues, which now face our industry. Safety, security, shipping’s environmental credentials and, indeed, the whole future sustainability of the industry – subsequently of mankind also are all dependent to a great extent on the cultivation of capable and effective manpower resource.
Until recently, much of the regulatory process within IMO was focused on developing measures, which sought to improve what might be termed the hardware of shipping – the ships themselves, the way they are built, the way they are equipped, the way they are maintained. But, in looking at how improvements in the performance of shipping can best be achieved in this new century, IMO has taken the conscious decision to concentrate its efforts much more strongly on the human element. This “shifting the emphasis onto people” has become enshrined as one of the Organisation’s guiding principles for IMO in the new millennium.
Year of the seafarer
When IMO first mooted the idea that the theme for 2010 should focus on “the seafarer” we wanted to do two things; first, we wanted to draw attention to a workforce that is largely unheralded and unacknowledged, often even within the industry it serves: and, second, we wanted to extend the theme beyond the regular World Maritime Day celebrations and to galvanise a momentum that would last for the whole year and, indeed, beyond. We wanted 2010 to be the start of this momentum; but we certainly do not want the end of 2010 to be the end of the initiative.
As was mentioned in the secretary-general’s World Maritime Day message earlier today, at the beginning of 2010, we identified three targets that we would be happy to see achieved in conjunction with our “Year of the Seafarer” initiative. They were:
One, increased awareness among the general public of the indispensable services seafarers render to civil society at large.
Two, a clear message to seafarers that we recognise and appreciate their services; that we do care about them, and that we do all that we can look after and protect them when the circumstances of their life at sea so warrant and
Three, redoubled efforts at the regulatory level to move from words to deeds to create a better world in which seafarers can operate.





I think I can safely say that progress has been made towards all three of these. It was always envisaged that the theme would constitute a focal point around which the maritime community as a whole could rally, to seek ways to recognize and pay tribute to seafarers for their unique contribution to society and the vital part they play in the facilitation of global trade. This has undoubtedly been happening and there have been numerous examples of this from all over the world. The fact that you are gathered here today is a good example of the action taken by authorities in Nigeria towards this call.
The “Year of the Seafarers” has also helped to re-focus attention on the pressing need to come to grips with the long-predicted labour-supply shortage in the shipping industry – a shortage that may have been temporarily alleviated by the recent downturn in global trade but which, nevertheless, remains ever-present. This makes it imperative for shipping to re-launch itself as a career of choice for the high-calibre, high-quality young people of today. In this context, the “Year of the Seafarer,” has added valuable impetus to the “Go to Sea!” campaign, which we launched at IMO Headquarters in November 2008, in association with the International Labour Organisation, the “Round Table” of shipping industry associations and the International Transport Worker’s Federation.
Above all, though, the “Year of the seafarer” provides an excellent opportunity to reassure those, who labour at the “sharp end” of the industry – the seafarers themselves – that those of us, who work in other areas of the maritime community, and yet whose action have such a bearing on seafarers’ everyday lives, understand the extreme pressures they face and approach our tasks with genuine interest and concern.
Manila amendments to the STCW convention and code
Undeniably, the most crucial, central and pivotal role in IMO’s work in this respect is played by the sub-committee on Standards of Training and Watchkeeping – STW, which, through the Maritime Safety Committee, has the mandate to regulate how shipmasters, chief engineers, deck and engine-room watchkeepers and ratings – in other words, the entire human element manning ships – should discharge their responsibilities relating to safeguarding life at sea, property and the marine environment.
The first international convention on seafarer training standards – the International Convention on Standards of Training, Certification and Watchkeeping for Seafarers (STCW) – was adopted in 1978. And since then, IMO has regularly revised and updated that Convention bearing in mind the importance of the human element in safety management ashore and afloat.
In this respect, the most significant achievement of the year undoubtedly came in June this year, with the adoption, by a diplomatic Conference in Manila, the Philippines, of major revisions to the International Convention on Standards of Training, Certification and Wachkeeping for Seafarers – the STCW Convention and Code. Scheduled to enter into force on January 1, 2012, these revisions will ensure that the necessary global standards will be in place to train and certify seafarers to operate technologically advanced ships for some time to come.
The seafarer dilemma and opportunities
Various technological advances have helped reduce the number of crew required on board a ship compared to the period before the 1980s. This has by no means diminished the role of seafarers in the maritime business, on the contrary, crewing costs still constitute a major component of the operating cost of a ship, and crew-related issues remain relatively complex. The impacts of globalisation on seafaring serve as excellent illustrations of the pros and cons of globalisation in general.
Seafaring is a glorious profession and has no room for error or negligence. Indeed the education of a young sailor is incomplete if it does not include indoctrination for facing calamities at sea or ashore. Successful seafarers are unique individuals. The uniqueness comes not from the possession of any extraordinary intellectual capacity but from the possession of simple common-sense (often referred at sea as behaving in a “seamanlike manner.)” The training and skills required for seafarers are by no means restricted to any particular nationality, race, religion or creed.
On the contrary, well-trained seafarers from a poor country can do the same job as effectively as their well trained, colleagues from a developed nation at drastically reduced cost to the ship owner. Herein lies the dilemma – globalisation has opened up avenues of opportunity for seafarers from developing countries, such as Nigeria, at the expense of those from traditional maritime countries such as the North European nations, the United States and Japan.
Today’s labour market for seafarers is perhaps the most globalised, standards and minimum wages are agreed globally, as for example in the “Geneva Accord” (ILO 2001), where “Representatives of shipowners and seafarers” adopt a historic accord on the future development of labour standards in the international shipping industry.
It may be recalled that in today’s global society, the supply of seagoing manpower, not just to national fleets but to foreign ships, too, has become a major revenue earner for some developing countries such as the Philippines and India, with their long and powerful tradition of seafarers’ training.
But what Africa’s position in this regard?
You cannot examine the role of the African seafarers without briefly looking at the historical developments on the continent. Trade relations between Africa and the rest of the world have remained more-or-less the same since colonial times. Primary commodities from Africa are traded for manufactured goods from industrialised countries, transported by international shipping line, which are dominated by operators in developed countries. Just a few African shipping lines have managed to stay in the market to-date. Many, including the Nigerian National Shipping Lines, collapsed in the late 1970s and 80s following, the economic difficulties of the era as well as unfair conditions governing international shipping. Lack of African shipping lines meant that there were no training facilities for African seafarers.
For quite some time now, African maritime transport stakeholders have been reflecting on cost-effective strategies for building the capacity of Africa to invest in the various maritime businesses, especially in the ownership and management of shipping lines. Given the previous unsuccessful arrangements in many African countries whereby only the public sector (government institutions) managed national fleets, the new perspective has been to explore a§ number of possibilities with an enhanced role of the private sector and cross border (multinational) investments.
Some of you may recall that in addressing the various maritime issues on the continent, the African Union Commission in collaboration with the Federal Republic of Nigeria oragnised the First Conference of Ministers responsible for Maritime Transport held in Abuja from 19 to 23 February 2007. The ministers considered a comprehensive maritime agenda for Africa and adopted a Declaration and Plan of Action for the development of maritime transport in the continent.
Later in April 2008, a conference of ministers of Transport (all modes) was convened by the African Union in Algiers, Algeria where the continental maritime transport Plan of Action, among others, was reviewed and updated. As a follow-up, the second African Union Conference of Ministers Responsible for Maritime Transport under the theme “Creation of a Safe, Security and Clean Maritime Transport Industry” was convened and held in Durban, the Republic of South Africa, from 15 to 16 October, 2009.
The outcome of that Conference was the adoption by the Minister of:
• The African maritime transport charter;
• The Durban Resolution on Maritime Security, Safety and Protection of the Maritime Environment in Africa; and
• Maritime Transport Plan of Action 2009-2012.
Article 3 of the African Maritime Charter has thirteen objectives including two, which are relevant to the seafarers, namely:
• Promote the provision of maritime education and training at all levels including secondary schools, and
• Promote the employment of seafarers, decent working conditions and training of seafarers.
The Plan of Action constitutes a negotiation document vis-à-vis development partners likely to support Africa in its efforts at developing maritime transport in the continent. One of the objectives in the Plan of Action is to “develop Africa’s training capacities in the area of maritime and port administration.”
If Africa is to benefit from the opportunities presented by the envisaged worldwide shortage of seafarers, then the first pre-requisite is to develop and build capacities of its maritime training institutions in line with global standards. There are 13 maritime training centres in Africa (including one Regional Maritime Academy and one Regional Maritime University) providing training for most of the seafarers in the shipping industry. For many years, one of the major identified problems has been the shortage of sea-time training vessels for cadets attending Maritime academies in developing countries.
In the recent past, IMO and Gdynia Maritime University have organised three training programmes for a total of 87 cadets from African countries on board the Polish training vessel Dar Mlodziezy. For this “Year of the Seafarer,” part of our programme for Capacity Building include exploring a mechanism for finding some training berths on vessels for cadets’ sea time.
To assist African maritime training institutions, and within the framework of the Memorandum of Understanding (MoU) between IMO and the Chinese Ministry of Transport, a very successful training workshop attended by 20 Principals/Trainers from 10 African Maritime Academies (including Maritime Academy of Nigeria) was held in Shanghai, from 18 to 31 October, 2008. China hosted and funded the workshop at the Shanghai Maritime University (SMU).
Following that event, a co-operation agreement between the Ghana Regional Maritime University (RMU) and the SMU was signed and joint training programmes between the two universities are being developed.
Another outcome of this workshop was the formation of an Association of African Maritime Academies.
In September 2009, and as a follow-up to that workshop, a delegation of five Chinese officials, accompanied by the IMO regional coordinators, undertook maritime training needs assessment missions to three African countries. The objective of these missions was to assess, at first hand, the needs of the maritime training institutions in those countries, and to explore areas of mutual/bilateral co-operation and assistance between Chinese training institutions and their African counterparts.
Although IMO has, over the years, provided technical assistance to a number of African countries to assist them in meeting requirements on the implementation of the International Convention on Standards of Training, Certification and Watchkeeping for Seafarers, 1978 (STCW Convention), only 17 countries are on the “White List” to date. Even for the countries that are on the White List, a lot of work still needs to be done for the full and effective compliance of the STCW Convention.
As you may be aware IMO, through its ITCP, has placed a lot of emphasis on capacity building through training institutions such as WMU, IMLI and support to regional and national maritime training institutions. However, it has come to IMO’s attention that many of the maritime training institutions in developing countries in Africa, south east Asia, the Pacific and the Central American regions are very ill equipped for the purpose for which they were established, i.e., training of maritime personnel.
To address this deficiency, and bearing in mind that 2010 is the “Year of Seafarer,” IMO has committed an allocation of some $2.5 million to support the training institutions by way of provision of training equipment.
The way ahead
As we have seen from the foregoing, s seafarers continued to make a huge contribution to the global economy and the centre of gravity of the labour market has been shifting from traditional maritime countries in western Europe, Japan and north America to the Far East, Indian sub-continent and eastern Europe. This opens an opportunity for Africa including Nigeria with its numerous resources, to prepare itself to fill the gap. However, Nigeria as well as other African countries should take urgent steps to domesticate the African Maritime Charter and ensure that the Maritime Transport Plan of Action 2009-2012 is equally implemented.
I believe that there is a need for a concerted effort by all of us here, using all available means including the electronic media to project this positive image of shipping as responsible and environmentally conscious industry which provides stimulating and long-term career prospects to young people, while carrying over ninety per cent of world trade.
With a coastline of 853 bordering the Atlantic Ocean in the Gulf of Guinea, a maritime sea area of 46,500 sq.km and exclusive economic zone of 210,900 sq.km, Nigeria is endowed with a highly productive open sea with abundant and diverse maritime resources. I understand that Nigeria has only approximately 2,000 seafarers at present, which is a very small percentage of her population. The training facilities available at the Maritime Academy of Nigeria (MAN) in Oron, and in other institutions should be developed in a holistic manner so that Nigerian seafarers can be trained to take their rightful place in contributing to the global economy.
IMO wholeheartedly endorses, recognizing as it does, that the continued development of a high-quality global manpower resource for the international shipping industry is of paramount importance for its present existence and its preservation in the future.

2012: Year of unachieved targets in oil, gas sector

THE year 2012 started on a promisory note in the oil and gas sector especially going by the mission statements scripted by the authorities, with the vision to promote the fortunes of the industry.
Twelve months after, targets set for the operational upliftment of the sector were deliberately or otherwise missed, leaving the opertors in deeper morass.
For instance, the Federal Government promised to pass the Petroleum Industry Bill (PIB), conduct oil licencing round and deregulate the downstream sector, all before the end of the year, which never came to pass.
Just few weeks ago, the Minister of Petroleum Resources, Diezani Alison-Madueke assured the stakeholders in the oil and gas sector that the PIB and oil licensing round would still be taken care of, before the end of the year. The government has not held a licensing round for  over five years.
She later told the media that the licensing round would take place in the first quarter of next year, and promised that the PIB would be passed by the first quarter of the year.
The PIB has been in the works for 15 years, intended to overhaul the industry, make it more transparent, improve regulatory institutions and fiscal policies and bring everything up to global standards.
But the bill has been stuck between government and parliament for five years, holding back billions of dollars in investment.
Nigeria’s four refineries are working far below capacity, forcing the country to import most of its fuel needs. The government’s heavy subsidies for petrol are thought to have cost $16 billion last year. President Goodluck Jonathan tried to abolish fuel subsidies in January but chose to retreat, partially reinstating them after nationwide protests.
Regulatory uncertainty, among other things, has helped make Nigeria’s oil industry stagnant. Output is yet to inch near the four million barrels per day target. To stakeholders, these unfulfilled promises could scare away potential investors into the oil and gas sector.
Also, the inability of the Federal Government to deregulate the downstream sector has also hampered investment in private refineries.
Speaking on the performance of the oil and gas sector in 2012, Lagos Chamber of Commerce and Industry, urged the Federal Government to fully deregulate the oil and gas sector in 2013 beyond the removal of oil subsidy and should scrap the Nigerian National Petroleum Corporation.
The chamber suggested that in place of the scrapped NNPC, a regulatory body be set up to properly regulate the oil and gas sector. It also said that the government should take bold steps and privatise all the refineries and depots in the country.
The Chamber in its 2012 end of year business environment assessment report signed by its Director General, Muda Yusuf said that operators in the oil and gas sector have long proposed as the way forward for the industry, “full deregulation of the downstream oil and gas sector beyond removal of fuel subsidy, immediate privatisation of all the refineries, petroleum products depots and pipelines.
The chamber is also in favour of the recommendation that a strong regulator, an equivalent of NCC in the telecom sector be installed in the oil and gas sector and the subsequent scraping of NNPC and its affiliates institutions.”
It said that President Goodluck Jonathan’s transformation of the Nigerian economy agenda was critically dependent on the quality of investment climate.
The chamber noted, “in pursuance of its policy advocacy mandate, the Lagos Chamber undertook an evidence based assessment of the business environment in 2012 with inputs from its members and stakeholders in the Nigerian economy. The purpose of this exercise was to identify key issues for advocacy and engagement for the improvement of the business environment.
“The business and economic environment was typically characterised by upsides and downsides, but the latter seem to have outweighed the former. The economy (as always) offered tremendous opportunities during the year, but the capacity of investors to harness the opportunities was constrained by the prevailing challenges of the operating environment.
It stated, “policy uncertainty was a major issue for upstream investors in 2012. The uncertainty about the Petroleum Industry Bill (PIB) persisted, as the fate of the bill is still unknown.  Given the enormity of capital requirement for investment in this sector, it is difficult to expect any progress in the circumstances.
“Government neglect of the host communities created serious challenges for the oil producing companies.  The logic of the Derivation Principle in Revenue Allocation was to ensure development priorities for the oil producing communities.  The same logic goes for the Niger Delta Development Commission (NDDC) and the tax proceeds from the oil and gas activities.  But no such priorities were given, creating a situation where hostilities against the oil producing companies intensified during the year.
“Long/delays in resolving dispute relating to oil and gas contracts.  There were often disputes between the oil companies and contractors and between the government and the oil companies, but no mechanism for speedy resolution of such disputes.  It was a major source of frustration for upstream investors.
“Upstream oil and gas companies expressed concern over the capacity of contractors in the sector leading to exorbitant cost of contracts and unsatisfactory delivery in quality and time.  No new investment in exploration because of the policy uncertainty, significant drop in the active oil fields from 46 in 2007 to 10 in 2012, rising/resumption of hostilities by the host communities increase operation cost and impact on output, security lapses leading to escalation of oil theft and vandalisation.”
Besides, “legislators and all relevant stakeholders should speed up the passage of the new PIB, while government’s (federal and states) should show better commitment to the development of host communities.
“There should be greater and transparent enforcement of oil and gas laws such as the Nigerian Local Content Act, Security forces should live up to their responsibility and step up on protection of oil insulations and oil workers, uncertainty surrounding the fuel subsidy programme.
Also, KPMG stated that the oil and gas sector recorded a number of big ticket deals in second and third quarter of 2012, such as Shell’s divestment of its interests in OML 30, OML 34, and OML 40 for $850 million, $400 million and $102 million respectively.
It noted that Shell divested significant interests in various OMLs over the period in order to streamline operations and focus on offshore assets. Consequently, local and international players acquired various interests in these OMLs.
“Growth in indigenous participation in upstream oil and gas activities due to the Local Content Development Act and disposal of assets by IOCs in line with operational strategies.
“Reduction in investments by players due to delays in the enactment of the Petroleum Industry Bill. Ongoing privatisation of the Power Holding Company of Nigeria (PHCN) successor companies, which has been concluded is expected to create capital raising opportunities.”
It stated, “Shell was involved in the largest deal by value in second and third quarter 2012 following the disposal of its interest in OML30, OML34 and OML40 for $850 million, $400 million and $102 million respectively. The disposals of these onshore fields were carried out in order to streamline operations.
“Investments by various companies were largely focused on the power sector, which is due to the ongoing reforms which has created various opportunities.”

DPR seals 96 petrol stations

THE Department of Petroleum Resources (DPR) has sealed a total of 96 petrol stations, across the country in the past few weeks over alleged sharp practices, ranging from under delivery of Premium Motor Spirit (PMS), by the stations, many of which operated without  DPR Licence or with expired licences, compromising safety, over pricing and diversion of PMS.
Besides DPR and the Standard Organisation (SON), have launched a mobile fuel laboratory with view to checking the adulteration of petroleum products across the country.
Speaking recently at meeting between the agencies in Lagos, the Director of DPR, Ostein Olorunsola said that the move was geared towards reducing the influx of sub-standard petroleum products into the country, and urged all stakeholders in the oil and gas industry to support the initiative for a better industry and a better economy.
Olorunsola disclosed that the products that will be scrutinized include Premuim Motor Spirit (PMS) or petrol, Automated Gas Oil (AGO) popularly called diesel, Kerosene and lubricants.
He noted that adulteration of petroleum products was the worst of all the sharp practices in Nigeria, adding that the trend has caused a lot of damage to engines and machines.
He stated that the development has had a debilitating effect on the nation’s economy, adding that there was the need to control the situation.
Also speaking, the Director-General of SON, Mr. Joseph Odumodu said that adulteration of petroleum products has impacted negatively on the socio-economic life of the nation.
Odumodu noted that cases of explosion are rife resulting in the loss of lives and destruction of property such as cars and equipment.
“There is constant breakdown of engines and this constitutes additional drain on personal and corporate resources. Our concern today is to put in place a quality assurance system that will put a stop to these embarrassing and unnecessary incidents.
“All petroleum depots, lubricating and blending plants, liquefied petroleum gas, LPG plants, LPG sale outlets, petrol service stations and surface kerosene sale outlets will be constantly monitored to ensure that products emanating there from conform to safe and acceptable industry standards.
He explained that it is the intention of the agency to create and maintain a database of all such outlets in the country with a view to compiling all test results to a referable database, for ease of tracing of receipts and sale of products for the benefit of government and the people.