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From Paul Osuyi, Asaba
TROUBLED by incessant attacks by Fulani herdsmen, Delta State Governor, Ifeanyi Okowa, has urged the Federal Government to, as a matter of urgency, introduce policies to curb the menace.
The governor made the call at the weekend during the 25th coronation anniversary of the Ovie of Ughelli Kingdom, Wilson Oharisi III.
While noting that the menace of Fulani herdsmen was not restricted to Delta, Okowa said: “Fulani herdsmen menace is a national challenge, it has become something that is affecting all the states in the federation.
“The Federal Government should have a policy direction for us to live in peace with the Fulani herdsmen. I do hope that there will be policy direction to reduce the clashes.
“I want to appeal to our people to continue with the peaceful engagement process while we continue to pressure the Federal Government to have a policy direction on the issue.”
The governor commended traditional rulers for ensuring that their kingdoms are peaceful which has translated to a peaceful state.
“If all the kingdoms are peaceful, the state will be peaceful and I want to state that I am proud of our traditional rulers because, they are working in one accord, with the existing peace in the state, investors will come in and our youths will get employment,” he assured.
Congratulating the king on his 25th coronation of being on the throne, he expressed confidence that with peace, the state was on the path of progress.
Earlier, Chairman on the occasion, Olorogun Miller Uloho, described the king’s leadership qualities as exceptional and friendly to investors and non-indigenes.
The governor also congratulated the Catholic Bishop of Warri Diocese, Most Rev. John Afareha on his 70th birthday anniversary.
Okowa, who was at the Mother of the Redeemer Catholic Church, Effurun for the birthday thanksgiving mass, said it was important for the church to shun materialism and concentrate on winning souls for Christ.
From Joe Effiong, Uyo
National secretariat of the Nigeria Union of Local Government Employees (NULGE) has suspended six officers of the Akwa Ibom chapter of the union for anti-union activities.
The officers affected by the indefinite suspension order contained in a letter signed by the acting National Secretary, Mr. Chukwuemeka Aguonye, include Mrs Anestina Iweh, state deputy president; Mr. Owoanam Akpanwa, state trustee and Mr. Kingsley Akpan, state publicity secretary as well as branch chairmen, Mr. Imoh Udoeyop, Ibesikpo-Asutan Local Government; Mr. Aniekan Ntia, Esit Eket Local Government and Mr. Monday Abak, Ukanafun Local Government Area.
Daily Sun, however, gathered that before the suspension order, the NULGE, had earlier queried the officials for allegedly flouting the National Executive Council’s (NEC) decisions and, colluding with the state government to victimise their state President, Mr. Martins Effiong.
The infighting in the state executive of the union has resulted in the alleged transfer of service of the state president to the state civil service, withholding of his salaries from February 2017 till date by the government, and alleged deductions of union dues by the Chairman, Local Government Service Commission, Dr. Valentine Attah.
The state Chairman of NLC, Mr. Etim Ukpong did not answer several calls to his phone line just as suspended Publicity Secretary of NULGE, Mr. Kingsley Akpan’s phone line could not be reached for reaction to the suspension order.
From Fred Ezeh, Abuja
Minister of Niger Delta, Usani Uguru Usani has asked the management of the Akwa Ibom State office of the Niger Delta Development Commission (NDDC), to submit a detailed report on the status of all ongoing and abandoned projects of the commission in the state.
The decision, according to the minister was to take critical assessment of developmental projects in the state with a view to either reviewing the contracts or appropriate more funds to fast track their completion.
The ministry, in a statement, yesterday noted that the minister gave the directive during an unscheduled inspection of some NDDC projects in Akwa Ibom last Friday.
Uguru was particularly concerned with the level of abandoned projects in the region, restating his commitment to effect a durable change in that regard.
The minister, in the statement signed by Director of Press, Mr. Marshall Gundu, expressed discontent with the absence of human and infrastructural development in the oil-rich region in spite of huge financial investment by successive administrations.
He said: “We came to inspect projects of NDDC in Akwa Ibom State because we are worried that despite huge debt profile of the commission, nothing tangible could justify the spending.
“It is quite disturbing that with the huge investment of resources from oil companies, government and all intervention programmes, the region is still backward. But that would be history in no distant time.”
Uguru was optimistic that the recent measures taken by the ministry would effect the needed changes in infrastructural provision in the region thus improving the living condition of the people.
“The platform recently created to strengthen synergy with agencies concerned with development projects in the Niger Delta region would ensure an objective opinion of all projects in the region,” he said.
He urged staff and management of the Akwa Ibom State office of NDDC to comply with the directive, threatening to punish anyone found to be hoarding information and documents needed for the quick and timely delivery of the comprehensive report.
The statement further indicated that the minister and his team inspected some ongoing projects, including prototype students hostel located at the University of Uyo and an abandoned road project site at Ikot Akpatek, in Onna Local Government Area.
By Isaac Anumihe
Founder of the National Association of Government Approved Freight Forwarders (NAGAFF), Dr Boniface Aniebonam, at the weekend blamed the Nigerian Shippers’ Council (NSC) of being responsible for the failure of the Council for the Regulation of Freight Forwarding in Nigeria (CRFFN) to carry out a successful registration of freight forwarders in the country.
Speaking during a roundtable discussion with members of the Association of Maritime Journalists of Nigeria (AMJON) in Lagos, he alleged that the Council helped the Association of Nigerian Licensed Customs Agents (ANLCA)with the first election that produced eight members of ANLCA in the Governing Council of CRFFN.
According to him, since ANLCA had majority seat in the Council, it decided to turn the regulatory agency to its personal affairs. He, however, maintained that CRFFN is not an arm of the Federal Government, but rather an independent organization.
Aniebonam explained that plans are under way to amend the law establishing the Council to enable the president appoint the chairman of the board.
“From the first election, they (NSC) helped other groups to with the election. That was how members from the Association of Nigerian Licensed Customs Agents produced eight members in the Governing Council and they decided to turn it an ANLCA affair.
“Are you aware that they have decided to amend the CRFFN Act so as to enable Mr. President appoint the head of the board?,” he asked.
Aniebonam said that the planned withdrawal of service by freight forwarders would be shelved afterwards.
Recall that both ANLCA and NAGAFF had given 21 days ultimatum to the government to address the issue of corruption in the sector.
He believed that the continuous engagements with the government on the matter could yield the desired results rather than withdrawing services of their members.
“Most of the issues and questions are based on how we can make our ports system to be better. “We have issues with the Nigerian Customs Service (NCS), Nigerian Ports Authority (NPA), terminal operators among others,” he added
On the arrest of containers by the police outside the customs ports, the NAGAFF founder agreed that the police have wider powers to make arrests whenever they suspect a foul play to undermine security of the country.
He called on the agents and their importers to always do the right thing.
On the proposed customs e-auction policy, Aniebonam advised that the service should seek to amend the Auctioneers Act, before implementing the new e-auction policy to avoid conflict of interests and litigation.
However, when Daily Sun contacted the Executive Secretary of Shippers Council, Barrister Hassan Bello, who is currently outside the country, he agreed that Shippers council midwifed the election of CRFFN at that time—about 10 years ago—– but did not influence any election.
“That is what Boniface Aniebonam is talking about” he said.
By Adewale Sanyaolu
Nigeria is one of the biggest oil producing nations in the world with very huge crude oil deposits around the entire South South, South East, and South West regions of the country, both tapped and untapped. Everything about oil is money, from exploration to exportation and marketing (crude or refined products), etc.
Further to being an oil producing nation, Nigeria is also one of the biggest consumers of oil products in Africa with about 40 million litres said to be consumed everyday. Why not? All the millions of cars and trucks on the Nigerian roads run on PMS or AGO (petrol or diesel) everyday.
Almost every home in Nigeria has a generator that works sometimes all day to power our homes (I’m writing this article with my laptop powered by generator right now), and most of these millions of generators used in Nigeria run on petrol and diesel.
The factories, businesses, schools, hospitals, in fact, everything in Nigeria depends of power generated privately from petroleum products-consuming sets. And all these oil products are dispensed almost 100 per cent through fuel filling stations.
Therefore, if you can lay your hands on petrol filling station of your own to market all these products, you are in for money. The demands for oil related products are very high and suppliers seem not to be enough. Even the major oil marketers including Mobil, Total, Oando, Conoil and Forte Oil are always looking for individual (would be) marketers who have the needed finance and logistics that they can sponsor in this business.
Using the 2012 petroleum products pricing template as a case study, the commodity prices for these petroleum refined products are high, though the current template (2017) is much higher and that guarantees more profits for marketers. As at May 2012, the prices of petroleum products were: Petrol – N97 per litre; diesel – N150 per litre; and kerosene – N130 per litre
This means that in Nigeria where 40 million litres of petrol alone are said to be consumed daily, a total of N97 x 40,000,000 = N3,880,000,000 is spent on fuel daily by Nigerians!
Now let’s assume you buy a full tanker load of fuel with maximum load capacity of 30,000 litres. When the product is completely sold, which usually takes less than six days to sell (depending on where your fuel filling station is and the demand at that time), the cash returns expected from one tanker of each of the petrol products’ sale will be: One tanker of petrol = N2,910,000; one tanker of diesel = N4,500,000; and one tanker of kerosene = N3,900,000.
The expected profit return from the sale of these products = N3,200,000. This means that in a week or thereabout, if all the products are sold, you’ll be making profit of N3 million!
Your petrol station need not necessarily be in the city like Lagos, Abuja, Enugu or Port-Harcourt. It can be located in the rural area as these areas are always neglected by the major marketers who prefer the urban areas. Having your petrol filling station in the rural area is far less expensive to set up and to maintain and still guarantees sustainable profit.
Type of marketer
There are two types of petrol marketers: Dependent Marketers and Independent Marketers. Each of them has both advantages and disadvantages. You need to understand these very clearly before choosing which one to go for. You can only be one at a time except you have enough investment capital to build more than one fuel station – use one for franchise and the other for independent marketing.
Dependent marketer
You are a Dependent Marketer when you hold the franchise of a major oil marketer to market under its name with your own facility fully branded by them. You’ll need to be clear on what the advantages are as that will help you make proper decisions. In my own opinion, it seems the advantages of being a franchisee of a major marketer is more than the disadvantages.
Independent marketer
A petrol station owner who runs his business under his own name, buys products directly from the nigeria National Petroleum Corporation (NNPC) and has a representative and assistant representative at the Petroleum Products Marketing Company (PPMC) depot by NNPC.
•Building your petrol station
Carry out research and feasibility study about the business structure and the location you intend to situate your business. This is very important as it will help your decision-making and form part of your documentation.
Remember, you are making a huge investment, you need to carefully study your intended petrol filling station environment. After this, you proceed to get Approval to Construct.
Basically, your petrol filling station has to be along the major road so that passing vehicles can easily have access to the facility.
Closeness to a busy area like motor park, roundabout or market is a plus so that vehicles engaging in commercial activities in those areas can easily call in at your fuel station to have their tanks refilled.
If your intended location is by the double lanes expressway, make sure the proposed land for your petrol station is close to a u-turn or roundabout.
Land
Two plots measurement of land is the minimum property requirement to build your petrol filling station. This will be able to afford enough space for vehicles to queue and make exit turns.
Carefully negotiate price for good landed property, the prices vary from location to location; no specific price can be placed on that here. You will need to find that out using property agents.
Storage tank
After acquiring your property, do the documentation, carry out the proper land survey and structural design. The next thing is to sink the underground storage tank. These tanks vary in measurements: 30,000 litres, 35,000 litres, 40,000 litres, 45,000 litres and 60,000 litres,
It is recommended that you go for high volume tank, like the 45,000 and the 60,000 litres if you intend to be storing extra fuel. If you go for 30,000 litres underground tank and you intend to be lifting full tanker of 30,000 litres, then you will have to always wait until the last drop of fuel in that tank is sold before going for another turn.
Construction
The petrol station construction engineer will be able to handle that effectively.
A bungalow – how big or small is entirely your choice depending on the space available and what else you want to add. Do you want restaurant, supermarket and car wash? Then, you need bigger bungalow.
Canopy over your pumps – the shade constructed over petrol station pumps is called canopy. It protects the pumps and the petrol attendants against the sun and the rain.
Perimeter fence – it is a regulatory requirement to fence the three sides of your petrol filling station, leaving only the entrance open for entry and exit. If you’re on a T-Junction, only two sides would be required to be fenced, the rest two would remain open for easy entry and exit from both joining roads.
Hardcore flooring – vehicles of different sizes and capacity would be making entry into your petrol filling station when operational. Your floor must be hardcore concrete to resist the pressure from these vehicles.
Standby generator (25kva to 35kva and above) – one need not be told that power supply isn’t stable in this part of the world. As far as petrol station is concerned, power supply is nonstop throughout the day, even when the business is closed for the day. Besides, standby generator is one of the requirements for approval.
Three to six pumps (electronic) – you will need between three and six dispensing pumps, depending on the size and level of approval you get. After all these have been done, next is to get your license and approval; visit www.dpr.gov.ng
Staffing
Security – this should be number one on the list of staff because of the high security risk in the petrol station business due to the expected flow of cash. Security in this country, as you and I know, is a total mess. Until the cashless policy becomes fully operational and adopted by every individual, security will always be a top priority in this business.
Armed robbers prefer to attack late at night and during the weekends when they hope to meet plenty of cash. Prepare to battle them on all fronts, enlist the services of private security operatives and pay them well.
Make sure you won’t be leaving plenty of cash within your petrol station at all times, security or no security.
Attendants – you will need two petrol attendants for each pump, who would be running shifts between them, one person at a time. Multiply that by how many pumps you intend to have, that’s the number of attendants you need to employ.
Cashier – this person will be in charge of handling the cash and keeping records of the cash transactions. Employ an account and use functional efficient software to keep accurate record of you cash movements.
Supervisor – his duty is to go about making sure everything is in order, both the facility and the staff. He sees to it that everyone is up to his task and he/she reports back to the manager.
This person must be very reliable and proficient at what he does, must not be a compromising individual.
Manager – he is the superior in charge of the overall function of the petrol filling station and must be experienced with the running of oil business. Every other staff reports to him while he in turn is accountable to the Chief Executive Officer (CEO). Carefully chose this person, your business can be made or marred by him. We have seen managers run businesses down.
With everything stated above in place, you are 100 per cent ready for real business and good to go.
By Louis Ibah
Airlines in Nigeria are now operating under very frightening or intimidating conditions, no thanks to the country’s poor aviation security and regulatory institutions.
They have failed to stem the rise in passenger attacks on airline staff and assets within the country’s airports’ terminals in recent months.
“No businessman can operate successfully under a condition where his employees have to be molested anyhow without adequate protection as we now see at Nigerian airports,” said Managing Director/CEO of Air Peace, Mr. Allen Onyema. “These are some other people’s children, husbands, brothers, and uncles, and they are above all, human beings. It should stop before it gets to a situation where we begin to think of self-defence,” he added.
Michael Obu, a passenger who spoke with Daily Sun at the Lagos airport acknowledged that there has been a rise in passenger abuse of airport workers and he described it “as very disturbing.”
Said Obu: “Few years ago, say about six years ago, you could count the number of incidences where you witness a passenger verbally insulting or shouting at an airline or airport worker for whatever reasons. I am a businessman and a regular flyer; I shuttle between Lagos – Port Harcourt – Abuja – Kano, and I can say it was even a very rare sight to see a passenger beat up an airport or airline worker; I can’t recollect witnessing any even up to 2011.
“But in the last two years, things appear to have degenerated; there is hardly any day I go to the airport to fly that I don’t witness an incident where passengers are either quarrelling on top of their voices with airline staff for one reason or another. And I have also witnessed passengers physically assaulting airline staff. It is now a common sight, but it is also a very disturbing trend because this assault could go on for hours and you don’t notice any timely or prompt intervention of the security personnel stationed at the airports,” Obu added.
Causes of passengers’ rage
In the last one year, four airlines – Arik Air, Air Peace, Medview, and Turkish Airlines – have openly come out to report the assault of their staff and destruction of their properties by unruly passengers. Going by the spate of passengers’ attack on airline staff, one would be forced to conclude that Nigerian passengers are sick or deranged, but that is not the case as explained by one passenger who simply identified himself as Noah.
“It is the airline or the staff at the counter that provokes the passenger and I speak from experience,” said Noah whom Daily Sun caught up with quarrelling at the counter of one of the airlines at the Lagos airport.
“This sort of thing where you book a flight for 7.30am because you have an important business meeting somewhere to preside over or even a wedding or burial by 10am and you leave your house to go to an airport before 5.30am for a 7.30am flight only to be told that the flight has been rescheduled to 10am, and from 10am it is moved to 12noon, and from there to 4pm, is capable of making any sane person go crazy,” said Noah.
“I want to go to Owerri from Lagos and they will say the flight has been delayed for technical reasons; what are technical reasons? That same airline that says technical reason for Lagos – Owerri will board Lagos – Abuja, and Lagos – Port Harcourt, and they expect you to take their technical reasons as excuse to wait from 7.30am to 4pm. It is unfair and it is capable of instigating unrest because most times the airlines are playing pranks on passengers by not coming out to tell the truth,” Naoh said.
Why flight delays, cancellations
The surge in passenger attacks on airline workers has been linked to frustrations from poor service delivery, especially impromptu cancellations or delays of scheduled flights by commercial airlines, which come with unexpected alteration of passengers’ plans and projections for the day.
Without doubt, Nigerian airlines, owing to a combination of factors, have become very guilty of frequent cancellation or rescheduling of flights, most times, without explanations that are logical and convincing to the passengers. And neither do they care to make available any form of compensation to the affected passengers.
Smooth flight operations have been severely hampered in Nigeria in recent years owing to a lot of factors, says Nogie Meggison, President of the Airline Operators of Nigeria (AON). Meggison listed such factors to include the fewer number of aircraft in the fleet of existing airlines, the scarcity and exorbitant cost of aviation fuel to power the available aircraft to keep to scheduled departure time, unavailable forex to do routine maintenance on aircraft and prompt payment of their insurance, as well as the absence of the requisite navigational aids that allow aircraft takeoff and landing at airports under severe weather conditions.
Megisson said airline operators, whenever they experience any of these factors, are often left with no choice than to declare a force majeure in the interest of safety. And this usually leads to flight cancelation or delays which infuriate passengers. Meggison, however, admits that it is not usually a very pleasant experience for airlines to cancel or delay flights given the attendant losses.
“We want to fly because we are in it as businessmen and passengers should understand this that no airline owner makes money keeping an aircraft on the ground,” said Meggison.
“Most times, it is not the fault of the airline but the operating environment. How do I fly an aircraft when I can’t find the fuel to power it and how do I fly an aircraft into an airport where there is no navigational equipment that can allow me to see the airport and land under poor visibility because of harmatan haze? These are the types of challenges we face,” he said.
It is estimated that the airline industry loses a minimum of N200 million on any typical day the slightest flight disruptions like cancellations or rescheduling is done. On several occasions, AON has demanded that the government make investments in modern navigational aids to assist pilots land even at zero visibility in line with modern trends. But the government is yet to yield to that plea.
The Air Peace case
Last week, Air Peace condemned the attacks on its staff by some unruly passengers in Abuja, Lagos, Calabar and other parts of the country, warning that it would no longer condone members of the public endangering the lives of its workers.
According to the spokesman for the airline, Mr. Chris Iwarah, “it is highly regrettable that security agents have failed to halt the trend of members of the public invading airport facilities to attack airline workers.”
Said Iwara: “On Thursday, April 20, 2017, the winglet of one of our aircraft, which was being towed within the very limited space at the ramp of the Murtala Muhammed Airport in Lagos to position for departure, had a partial contact with the stabiliser of another of our aircraft. We subsequently declared the two aircraft unserviceable in line with our high safety standards.
“We were, therefore, compelled to adjust our schedules to close the gaps created by the two aircraft, which were scheduled to do 14 flights. While we were trying to salvage the situation, some unruly passengers took the law into their own hands.
“Some passengers, who were to fly with us from Abuja to Benin, however, went violent. They attacked our staff in Abuja and almost killed our duty manager. It took the intervention of Air Force personnel, who were reportedly called in by the airport authorities, to rescue our duty manager from the mob. But that did not prevent the passengers from destroying our facilities. The menacing passengers also prevented others from boarding their own flights, thereby complicating the situation.
“In Lagos, some other passengers attacked and almost killed our station manager. Also in Calabar, unruly passengers had an unchallenged day, preventing our aircraft from flying. On Sunday, April 16, our staff were also attacked at the Murtala Muhammed Airport in Lagos.
“It is surprising all these attacks could take place at the nation’s airports, a high security environment, without any challenge whatsoever from security agents. The situation has, therefore, left us with no choice than to resort to our right of self-defence to prevent our staff from being killed. We can no longer tolerate unruly passengers maiming our staff.
“Security agencies must, therefore, rise to the occasion before our staff, who are also people’s children and parents, are killed. This is the least the government can do to prevent unpatriotic citizens from bringing the few surviving airlines in the country down,” Iwarah added.
The Arik Air case
Spokesman for Arik Air, Mr. Banji Ola, narrating the experience of the airline said, “on Wednesday, January 4, 2017, our Lagos-New York JFK service, which was to operate at 11:30pm had to be rescheduled by 24 hours to operate at 11:30pm on Thursday, January 5, 2017 due to the shortage in supply of aviation fuel by the major fuel marketers. Our Lagos-Johannesburg service and Lagos-Accra service was also on ground awaiting fuel while the Lagos-New York service was standing by for fuel. Aviation fuel supply has been epileptic in the country over the past weeks where availability of stock and terms of service are not guaranteed on a consistent basis by the marketers.
“Arik Air pursued all possible options to source fuel for the international flights on January 4, 2017, but when our Customer Service Manager at the Murtala Muhammed International Airport, Lagos, approached the passengers to explain the situation to them, one of the passengers chased and attacked him. This was followed by a mob of passengers who brutally beat, kicked and chased the Arik Air staff throughout the terminal building. The staff was later rushed to the hospital where he was treated for injuries sustained during the attack.
Arik Air managed to source a small quantity of fuel and despite eventually sorting out the departure of the Johannesburg service, some of the passengers from the affected services damaged the check-in counters, check-in systems and equipment, preventing the airline from being able to check-in passengers on January 5, 2017.
“This serious breach of security and lawlessness by some passengers who assault and cause bodily harm to the airline’s personnel cannot and will not continue. Passengers continue to take the laws into their hands and the severity and frequencies of such criminal acts are on the rise due to lack of appropriate action or preventative measures from the security agencies,” Arik Air added.
Ban on alcohol sales
The Air Peace CEO, Mr. Allen Onyema, also recommended a ban on the sale or consumption of alcohol inside airport terminals in the country, saying that some of the unruly passengers are usually intoxicated.
“I once approached a man who was shouting at top of his voice and abusing me for a delayed flight and as he dipped his hands in his pocket to fetch an handkerchief to wipe his face, a bottle of Chelsea alcohol drink fell off too. And those nearby told me he had been drinking for several hours and they attributed his violent conduct to intoxication” said Onyema.
“These kinds of persons in airport vicinity are very dangerous. There should be a law banning alcohol sales and its use inside our airports,” he added.
Spokesperson for the Nigerian Civil Aviation Authority (NCAA), Mr. Sam Adurogboye, said the regulatory agency was completely against passengers venting their anger on airline staff.
“What we are experiencing lately, the unruly behaviour of passengers and the resort to the beating up of any airline staff is a serious criminal offence and should not be tolerated,” Adurogboye said. The NCAA spokesman said under the Nigerian civil regulatory law, aggrieved passengers had the right to seek for redress in a situation where they feel their rights have been infringed by the airline through the Consumer Protection Unit of the NCAA.
“We have consumer protection officials at all airports in the country. Aggrieved passengers don’t know about this. But it is time they knew that they must not always fight but look for these officials mostly stationed at the departure and arrival halls and lodge their complaints because on daily basis we are assisting passengers get back their rights from airlines,” Adurogboye added.
Stories by Isaac Anumihe
The just-concluded conference of Association of African Maritime Administrators (AAMA) in Nigeria was an assemblage of politicians at the highest level, led by the Vice President of Nigeria, Prof. Yemi Osinbajo.
Among dignitaries and organisations that attended the event, include maritime experts and investors; captains of industry and maritime organisations such as AMAA, Africa’s Ship Registry Forum, African Ship Owners Association as well as African Shippers’ Council and Seafarers’ Forum. Others include International Maritime Organisation (IMO), Port Management Association of West and Central Africa (PMAWCA), Ship Owners Association of Nigeria (SOAN), Nigerian Ports Authority (NPA), Nigerian Shippers Council (NSC), Nigerian Institute for Transport Technology (NITT), National Inland Waterways Authority (NIWA), Advertising Standards Authority (ASA) and Food and Agricultural Organisation (FAO).
About 34 African countries were represented at the world conference, including Mauritania, South Sudan, Cameroon, Ethiopia, Mozambique, Sao Tome & Principe; Senegal, Sierra Leone, Seychelles, Somalia, South Africa, United Republic of Tanzania, Togo, Uganda, Ghana, Cote d’Ivoire, Comoros, Cape Verde, Djibouti, Benin and DR Congo. Others are Egypt, Equatorial Guinea, Guinea Bissau, Liberia, Kenya, Guinea, Libya and Nigeria as well as other non-African countries such as Jamaica, Netherlands and Malaysia.
However, the issues that dominated discussions at the conference were how to secure the African waterways from the activities of pirates and the dumping of toxic waste on African waters by the western world.
But the most critical issue was the election of a new chairman of the organisation, which took most of the members’ time and energy. At the end of the day, Director General of Nigerian Maritime Administration and Safety Agency (NIMASA), Dr. Dakuku Peterside, was unanimously elected as the new chairman of the association.
Peterside replaces the Acting Chief Executive Officer of South African Maritime and Safety Agency (SAMSA), Mr. Sobantu Tilayi, who had been on the saddle for four years. But beyond his emergence as the chairman of the frontline maritime association, Peterside inherited a lot of problems, which must be resolved before the end of his one year tenure.
The new chairman is expected to ensure that the African oceans are free from pirate activities. Also, member nations are concerned that Europe has converted the African oceans and seas as places to dump their toxic waste. This not only has affected aquatic lives, it has equally affected maritime trade.
There is also the need for the leadership of AAMA to increase Africa’s tonnage and development of other ship-building and marine infrastructure. This will increase the continent’s participation in global shipping activities.
The Secretary General of IMO who was represented by the Head, Africa (Anglophone) Section Technical Cooperation Division of IMO, Mr. William Azuh, cited the 2016 UNCTAD review of maritime transport, which indicates that out of the 35 top ship-owning countries in the world, which also make up about 95 per cent of world ship tonnage, none is an African country.
He charged the leadership of the association and member-states of the association to begin to develop the framework that would enable them take full advantage of the vast maritime potential embedded in the continent.
“I, however, believe that the leadership of AAMA and your home governments will, when considering such statistics, seriously take into account the history of the national shipping lines and the reasons for their demise,” he said.
He added that the very high level of risk, which investing in the shipping industry entails and the benefits for the wider public, which can be realised if the funds were to be spent towards achieving national sustainable development priorities, should be taken into consideration.
Earlier, President Muhammadu Buhari had identified lack of synergy among member-nations and called for more collaboration among them. He called for improved synergy and collaboration among African countries to effectively attain a sustainable use of Africa’s oceans and seas.
The new chairman should also ensure that member nations train their cadets and ensure effective implementation of international maritime instruments as well as ensure that they simplify their trade documentation and procedures.
Specifically, Nigerian stakeholders argue that Nigeria controls the highest volume of traffic. Nigeria controls 70 per cent of total cargo throughput. This makes it have a controlling influence over the rest of other maritime nations. So the chairman should also ensure that graduates from Nigerian maritime institutions have sea time experience to make them employable.
However, a Nigerian maritime expert, Mr. Ismail Aniemu, expects the chairman to unlock the untapped fishing resources available in Nigeria. While listing the gains of being the chairman of the organisation, he has no doubt that Peterside would perform creditably because of Nigeria’s position in the West and Central African region.
“Nigeria plays a leading role in maritime and oil matters in the West and Central African regions. Electing a Nigerian to chair the body of African maritime administrators is asking the nation to oversee a sector that has an influential stake.
“It affords the country an opportunity to be at the fore of regional and continental policy agreements and implementations as it concerns the sensitive area of maritime. Nigeria being a heavy importing nation and one of Africa’s leading oil exporter will lead other countries in tapping these maritime oil benefits. The concerted fights in the Gulf of Guinea against piracy and sea robberies will receive multi-national approach with strong likelihood of proximate maritime administrations keying in to stop the menace. Our large fishing resources remain untapped. This is one sub-sector that foreigners are illegally fleecing us.
“With full control and operational oversight of our marine domain, not less than 20,000 direct and indirect jobs can come to Nigeria through here. The ship repair and boat building potential have remained under-utilised. The new chair can harness available patronage within the West Coast for ship owners to do dry-docking of their vessels and boat-building in Nigeria at competitive prices. With many single hull vessels going out of use in line with extant IMO conventions, ship breaking opportunities that guarantee quick employments for unskilled labour stares at us. This is one area that ship owners’ wealth is rusting away in West and other parts of Africa.
“The new chairman can pool these resources for wealth and employment creation. Africa will now gravitate into being a potent voice in the comity of maritime nations as the new bloc will present the continent’s maritime administrations as united with a higher degree of cohesion,” he opined.
Group discredits committee set up to restructure MAN, Oron
A frontline advocacy group in the Niger Delta region, the Niger Delta Development Initiative (NDDI), has sent a letter to President Muhammadu Buhari condemning the committee set up recently by the Minister of Transportation, Mr. Rotimi Amaechi, to restructure the Maritime Academy of Nigeria (MAN), Oron, describing it as something done in bad faith.
A statement by the President of the association, Gabriel Thompson, and the Secretary, Ita Umiom, said the recommendations of the committee, which is chaired by the former Managing Director of the Nigerian Ports Authority (NPA), Chief Adebayo Sarunmi, should be disregarded as it is capable of igniting fire in the region, which has been calm for some time now.
Outlining the reasons for condemning the committee’s report, the group said the Sarunmi-led committee is made up of men that have lost touch with modern realities in the maritime industry and as such did not interact with professionals in the industry.
“These professionals include the best sailors and mariners all over Nigeria who have deep knowledge of how maritime institutions are run internationally.
“The committee was wrongly constituted because when you put together a committee of such magnitude, you don’t bring people that do not have the knowledge of the requirements of STCW (Manilla Convention of 2010 as amended), the laws that guide international maritime activities now. The committee, the group said, even criticised the International Maritime Organisation (IMO) standards adopted by the institution.
“There is no way a committee can restructure an institution like MAN, Oron, without interacting with the critical stakeholders, including the host communities.
“The committee was skewed to negativity because its attention should have been focused on bringing recommendations that should make the academy a world-class institution that could compete favourably with countries such as Philippine and Singapore whose mariners occupy nearly all the vessels on the world maritime waters.”
The group argued that provision of training vessel is critical to the academy because it will enable the cadets to participate in the mandatory sea time experience as required by the Standard of Training Certification and Watch-keeping (STCW Convention 2010); provision of relevant equipment, infrastructure, proper funding, creating enabling learning environment with qualified lectures, are the critical areas that need restructuring and not the human beings in the academy.
“The recommendation that directors of Oron extraction in the school, who have committed no offence whatsoever should be compulsorily retired, is a misnomer.
“To show that the committee lacks required knowledge, the recommendation that the procurement department of the institution should be merged with works department is against the Procurement Act of 2007 and it also negates the spirit of due process and world best practices.
“The committee’s recommendations to tamper with the original organogram of the school which was approved by the federal government is also a misnomer.
“The membership of the committee is not only lopsided but is full of those who have one grouse or the other against the people of Oron nation..
“The problem of MAN, Oron is basically funding which should be properly addressed. Since the demise of the Nigeria National Shipping Line (NNSL), no cadet from the institution has had sea time experience because of absence of training vessel. This is an area the committee should have directed its energy at.
“Presently we commend the current leadership of the academy as it has been able to stabilise and reposition the institution for rebranding.
The minister should create an enabling environment that will sustain the present leadership, which the Niger Delta people are quite confident will steer the institution until such a time the institution is fully transformed into a maritime university.
. “NDDI is fully aware of plans by the government to ensure that peace is fully sustained in the Niger Delta region.
“That any move to provoke unnecessary tension in the region through such restructuring is human sabotage to the people of the region.
NPA relocates 2 abandoned vessels on Brawal Oil Services waterways
As part of efforts to ensure that all vessels obstructing Nigerian waterways are removed, Nigerian Ports Authority (NPA) has relocated two vessels – MV Tiger Fish and MT Gift – abandoned at the Brawal Oil Services Limited jetty in Onne, Rivers State.
In a letter of appreciation signed by the Branch Manager, Brawal Oil Services Limited, Sylvester Agbotian, the oil-servicing company said the vessels occupied “a major chunk of our Jetty” and no payment was made for the period the vessels occupied their waterways.
The company, therefore, thanked the Onne Port Manager, Alhassan Abubakar, for ensuring that the abandoned vessels were removed.
“We pledge to continue to co-operate with you and support you in our own little way to enhance your effort at running Onne Port Complex profitably.”
Recall that following a series of complaints regarding the abandoned vessels at Brawal Oil Services, NPA, Onne Port, on March 12, 2017, commenced the relocation and towing of the two vessels –MT Gift and MV Tiger – from Brawal anchorage (Berth) in FLT to JTF jetty along Okrika Creek.
The vessels were beached at the JTF jetty at the instance of the JTF Sector Commander.
Meanwhile, the Ele Community, a host community to Onne Port Complex, has thanked NPA for good Corporate Social Responsibility (CSR). In a letter, the community thanked the management of NPA for the recognition of Ele Community as one of the host communities in the port complex.
“The people of Ele Community heartily express their gratitude and appreciation to the Managing Director of NPA, Ms Hadiza Bala Usman, for the kind gesture which include the provision of food items and the recent proposal to provide potable water and internal slab road network for the community,” the community said.
They noted that the giant strides of the new management of NPA will enhance further unity, understanding and peaceful co-existence with the host communities.
By Charles Nwaoguji
IN a bid to fast-track its plan on economic diversification, the Federal Government is set to establish satellite industrial centres across the six geo-political zones of the country.
The establishment of these industrial centres, which would be anchored by the Nigeria Export Processing Zones Authority (NEPZA ), is expected to commence immediately after the passage of the 2017 budget.
Speaking with journalists in Lagos, the new Managing Director, NEPZA, Mr. Emmanuel Jime, said the establishment of the centres will serve as a catalyst toward the diversification of the economy and the promotion of backward integration.
“The present administration’s desire is for the economy to fully diversify and this is the reason the president has ordered the creation of the satellite industrial centres in the six geo-political zones across the country.
“And for this to happen, NEPZA has been given the directive to anchor this, which will take effect as soon as the budget is passed,” Jime said.
Jime who took over the leadership of NEPZA last week said the agency will do everything to put the country in the right direction with the diversification of the economy through manufacturing for domestic market and export.
“As we know, NEPZA is a creation of Act 63 of 1992, with mandate to licence, regulate and monitor free zones in Nigeria. Our plan now is to focus on the generation of employment, technology transfer and skill acquisition. Also, we will do everything to attract more Foreign Direct Investment (FDI) through aggressive marketing,” Jime said.
He stated that creating an attractive environment for manufacturers through measures such as tax breaks, export incentives and finances, is high on the government’s agenda in line with its broader aim of increasing local production.
“Producers need assurance that if they produce locally, their products will enter the local value chain, and we are createing the condition for that,” he said, adding that NEPZA will work hand in hand with other sister agencies to ensure smooth operations for manufacturers.
Jime said the primary engine for growth and development of any economy is the organised private sector, while government is required to provide the enabling environment. This, according to him, could be in the form of appropriate intervention namely, legal framework, policies and programmes that will support investment, provision of physical infrastructure like power and road network, security and a stable polity, among others.
“Moreover, since we operate a mixed economy, the government is required to intervene in the provision of social amenities or services, where it is proven that if left entirely for the organised private sector, the cost will be too heavy for the average consumer to bear,” he said.
Stories by Bimbola Oyesola
There is a lot of words to describe running hospitality business: fun, exciting and profitable. But like cooking a meal, the success starts with the preparation and finishes with the service. However, for the President of the National Union of Food Beverage and Tobacco Employees (NUFBTE), Lateef Oyelekan, running an hotel business was borne out of necessity, the need to provide accommodation for members of the union spread across the country any time they are in Lagos for meetings. But the union later found out that it could be a good source of revenue provided it is run professionally.
So starting with a 50-room accommodation hotel, in the space of three years, the union was able to construct the second phase with event centre, swimming pool, gymnasium and other modern facilities. Hotel business falls under the hospitality industry and one of those businesses that can boost the economy of a nation if the potential are properly harnessed. Oyelekan speaks more on how one can run a successful hotel business:
Why hotel business
We decided to go into business generally. Looking at how wasteful the country had been in the past administration, we believe that there would be a time the country might relapse into recesssion like this. Hence, we believe we need to think ahead because most times there is crisis, our members suffer. Like now, we have lost a lot of our members due to redundancy that came out of the economic challenges faced by the companies in our sector. Besides, we normally incurred huge expenses each time we hold our meetings – the National Administrative Council (NAC), the National Executive Council (NEC) and our Delegate Conference.
Initially, we planned to build a guest house but later we saw the commercial value in running an hotel; that it can expand our financial base now that our check off dues are diminishing due to job loss. Besides, we looked at the maintenance of the 50 rooms; if we are going to use them alone, it would be awesome, so we decided to make it commercial and that is what gave birth to Food Union Hotel and Suites.
Challenges
Hotel business would have been the best but there are lots of challenge. In Nigeria today, there is no hotel that does not have generators and they have to be huge ones. The price of diesel to run generators is quite high; like in our hotel, we use about N3.5 million diesel in a month. But if electricity is working, that expense on diesel would have been part of our profits. Such money could also have been used to improve facilities in the hotel and welfare of the workers.
Lucrativeness
Despite the challenges, it is still profitable to run an hotel business. To really make money in an hotel, I would say the value addition facilities provided would create the niche for the entrepreneur, not just the accommodation alone. For example, our hotel has such facilities as event centre that can sit up to 1,000 guests, a conference room that can accommodate up to 50 people, a swimming pool, gymnasium, among others. Some of our management and others normally use our facilities for their meetings, retreats and events.
So far, we have no regret going into the business. Going into the business has made it easier for us to pay the salary of our workers, both at the secretariat and the hotel.
Though I’m not in the accounts department and would not be able to say specifically what the annual profit is, but I can say authoritatively that the first phase of 50 rooms was able to pay for the construction of the second phase, which has state-of-the-art facilities with additional 30 rooms, swimming pool, gymnasium, event centre and others within three years.
Requirements
There are other basic things that an entrepreneur who wants to succeed in this line of business must do.
•Draw up a business plan When opening your hotel, you’ll probably need to get start-up capital from either a bank or private investors, but for us, the hotel was built with our contributions. However, either option will want to see a business plan to determine if your business is worth investing in. Additionally, a good business plan is beneficial for you to organise your goals for your hotel and get a clear picture of how to make it a success. Make sure all guests have a great experience. In addition to other methods of advertising, word of mouth will be crucial. All of your guests could potentially tell friends and family about your hotel, post about it on social media, and review it online. You’ll want to do everything you can to make sure this feedback is positive. Even one disgruntled guest can hurt your business if he takes to the internet. If you commit to showing every guest a great time, you’ll establish customer loyalty that will give you great advertising.
•Offer deals or specials. Group discounts, free breakfast and lower rates for several-day stays are a good way to attract customers on a budget.
•Design a website. If your hotel isn’t on the internet, it’s basically invisible to your potential customers. You could design your own website but it may be worth the investment to have a professional work on your site – cheap sites are often easy to spot. At the minimum, your site should have the hotel’s name, location, contact information and nightly rates. •The person would have to spend money on advertisement; get necessary equipment and facilities. Above all, hire professionals and good hands to manage the business. Also, the owner of the business, as the chief executive, must be duly involved in the business. It is also important that you have industrial washing machine, have the water treatment in the hotel so that the guests would have good water, not just for drinking, even for bathing. Hygiene is very important.
Besides, you must be able to get your products directly from the companies without having to pass through the middlemen. That would further save cost and boost your profit.
I mean, such products like soft drinks, beer, juice, foods like semo, milk. Then you must buy your cow, chicken, goat live and slaughter them. This means you must have a pick up as well as a cold room for preservation. With those things in place, the hotel business is a good business.
Stories by Steve Agbota styvenchy@yahoo.com 08033302331
Cashew nut tree, one of the economic trees that have the potential to create enormous wealth for farmers across the country and generate huge foreign exchange for government, has not been given deserving attention despite having capacity to generate about $5 billion annually in the next 10 years.
Due to lack of value addition and Nigeria’s inability to process cashew nuts in significant quantities for export, the country lost $1.4 billion in 2016. The amount, which could have gone into government coffers and turned the life of farmers around, was wasted.
According to data from the National Cashew Association of Nigeria (NCAN), Nigeria exported a total of 160,000 metric tonnes of cashew valued at $300 million in 2016. This was far behind what farmers and exporters could have earned assuming there were processing factories that could process cashew nuts for export standard.
The cash crop (cashew), which is an important industrial and export crop whose potential is yet to be fully exploited in Nigeria, is said to provide livelihood for over 300,000 families and has created 600, 0000 jobs.
Historically, in the 1980s, Vietnam’s cashew production was in the same level with Nigeria’s production. In the early 1990s, Vietnam began processing its cashew and 16 years later, the country had become the largest processor and exporter of cashew kernels in the world and by 2013, Vietnam already earned $1.8 billion from cashew kernel export to over 80 countries. Currently, India’s cashew exports amount to over $2.5 billion and Vietnam generates as much as $3 billion each year, mainly from processed kernel.
However, the Nigerian cashew industry is suffering from declining productivity and dwindling export earnings, thus making the commodity less competitive in the international market, compared with other African countries like Gabon, Cote d’Ivoire, Benin Republic and Ghana.
Recently, Minister of Agriculture and Rural Development, Audu Ogbeh, said Nigeria would start exporting processed cashew nuts by 2019, adding that currently a tonne of processed cashew nuts, when exported, is sold for $10,000 while the raw cashew nuts are sold at $1,200.
He explained: “It would be beneficial to process the nuts and export rather than exporting the nuts raw. So in the next two years, we will no longer export raw cashew nuts, but roast the cashew nuts for export.”
But industry watchers countered the claims made by the Minister, saying that government talks too much but does little in terms of action. They said the Minister should put in place a master plan that will ensure that exporting processed cashew nuts by 2019 is feasible.
Daily Sun investigation shows that in Nigeria, cashew grows successfully in virtually all agro-ecological zones including the semi-arid areas but with high concentration in the middle belt areas in smallholder farms and plantations. Cashew production comes from over 28 states including Kogi, Kwara, Oyo, Edo, Ondo, Benue, Cross River, among others.
Speaking with Daily Sun, a cashew exports expert/Managing Director of Universal Quest Limited, Sotonye Anga, said for the industry to be galvanised, strengthened, restructured and better positioned, it requires at least a N100 billion intervention fund to put the industry in top shape. He said a minimum of N20 billion will help.
Anga said the industry needs to be intensified to drive growth of industry, which will attract investors, saying priority must be given to cashew processing to ensure that Nigeria’s cashew processing capacity becomes competitive.
He added: “When you are processing cashew, you know that you are processing a global product that will be consumed globally. So issues of quality become very critical, which means that there is need to deploy the right kind of technology to deliver high quality value added cashew. The equipment for processing will cost money because they are not produced locally; they have to be imported. We need to ensure we have right machinery to process cashew and build the right infrastructure.
“In capacity building, we need to be able to put in place the training school for cashew processors. You need semiskilled workers that will handle the operations of cashew processing and currently, because there is no training school, individual cashew processors would have to train their workers. You know, when you invest so much money to train these workers and for any reason, they go to work somewhere else, you lose them and you have to retrain again and keep retraining,” he added.
Anga, who is also the National Publicity Secretary of NCAN, said one way forward would be for government to establish and maybe fund the training school so that Nigeria can be able to consistently produce semiskilled manpower that would be able to handle cashew processing.
So with this, he said, there would be a pool of workers that can be directed into any cashew processing factory that will be established anywhere in the country to handle different aspects of cashew processing.
Said he: “More so, it is one thing to have cashew processing factory, it is another thing to have adequate materials to service the factory and for a processor to stockpile 2,000 metric tonnes of cashew, which is an average. It requires a lot of money that runs into over millions of naira. How will the average cashew processor be able to finance the whole stock, which is a very big issue because you are more or less tying down capital for a long term? Because you will have the cashew during the season, you have to keep it in your warehouse and process it gradually all through the year, which is another very high cost center.”
He said cashew processors would need finance to get raw materials so as to process consistently. According to him, this is where the bank comes in to be able to provide the kind of financing that will enable processors to hold stock to be able to process all year round.
The NCAN National Publicity Secretary said if the cashew industry is taken seriously, Nigeria would be able to generate a lot more money from cashew processing and more people would have access to high value cashew to be consumed both locally and internationally.
He explained that any form of incentive government gives to cashew processors would help to reduce total cost of production and processing and help the cashew processor to be more competitive globally.
Coupled with all the challenges facing cashew processors such as electricity, transportation/bad roads, high cost of labour, lack of finance, among others, he said there was need for stakeholders to sit down and determine the workable and working incentive that will be available for players to be able to grow the industry, which is for the good of the nation.
Speaking on earning capacity for cashew, he said looking at utilising the whole cashew and making foreign exchange earning from them across board and the different byproducts of cashew such as cashew kernel, cashew apple juice, and process the different parts of cashew, by turning the industry to a money making machine, which will be able the country to achieve the $5 billion.
By Steve Agbota
The Minister of Agriculture and Rural Development, Chief Audu Ogbeh, has said that the present reforms in the agricultural sector would boost Nigeria’s agricultural growth and food production.
The Minister made this known last Monday in his opening remarks at the opening ceremony of the 42nd Regular Meeting of the National Council on Agriculture and Rural Development, with the theme, “Agribusiness Investment for Economic Stabilisation, Diversification and Growth”, which held in Port Harcourt, Rivers State, from April 24 – 28, 2017.
Ogbeh explained that with the prevailing framework of the 2016 Green Alternative Agricultural Promotion Policy, the focus of the government was to achieve self-sufficiency in food production, encourage value addition to local materials, diversify the economy, expand employment opportunities, reduce import dependence and stimulate agricultural exports.
The Minister who was represented by the Permanent Secretary in the Federal Ministry of Agriculture and Rural Development, Dr. Bukar Hassan, said the roadmap’s productivity enhancement, private sector and institutional realignment is to fast-track farmers’ access to land, knowledge and inputs, processors’ utilisation of storage, technologies and marketing and consumer’s nutrition expectations.
He said, “the reforms in the sector would improve the access of farmers to inputs and credit, emphasise the effective application of research results, revive extension services, increase commodity output, enhance processing capacity, broaden market access and expand revenue earnings.”
He said these expectations would require the cooperation and commitment of stakeholders to agribusiness promotion, sustainable livelihood and food security in the country.
Ogbeh added that a private sector-driven agricultural mechanisation programme is being promoted by governments to operate machinery hiring enterprise scheme as well as facilitate the manufacture of durable farm machinery that can withstand the varying geographical terrain and climatic conditions of the country’s diverse ecologies.
While commending the contribution of Rivers State government to national development, the Minister encouraged stakeholders in agriculture sector to familiarise themselves with the objectives and strategies of the agricultural promotion policy to sustainably develop the sector.
… Creates 300,000 employment for Nigerians
By Steve Agbota and Chinwendu Obienyi
Nigerian Breweries (NB) Plc. has empowered about 250,5000 farmers and created 300,000 jobs for Nigerians through its value chain mostly in the area of agriculture in the country.
The company was able to empower more Nigerians with many jobs through innovative products and improved local raw materials’ sourcing, which is currently close to 50 per cent, as the company targeted 60 per cent of its local raw materials sourcing by 2020.
To this end, NB, in conjunction with Heineken Supply Chain BV of the Netherlands and other Heineken companies, is involved in activities aimed at development of new hybrid sorghum varieties with the potential of increasing the yield/output for sorghum farmers as well as improving the quality of sorghum malt, which is a major raw material input in the company’s operations.
According to the statement, excerpts from 2016 Annual Reports said two high-yielding sorghum varieties have been developed and registered by the company, even as the process of commercialising their production is ongoing. It also said the company has a subsisting consultancy agreement with a Nigerian professor on the development of sorghum seeds.
The company’s Managing Director, Mr. Nicolaas Vervelde, who addressed newsmen at the pre-Annual General Meeting (AGM) media briefing in Lagos, said that it is also making progress in the deployment of new hybrid sorghum varieties, adding that yields had increased over time in line with the firm’s growth projections.
He said the company had been in the sorghum value chain since 1998, noting that it was also investing in research and development with regard to sorghum seeds, adding that the company had embarked on various sorghum value chains to increase its source locally.
The NB Plc boss said the company is making progress with its partners – International Fertiliser Development Centre (IFDC) and Psaltry International, a local processing company – on value extraction from cassava, stating that the company at the moment has two sorghum plants in Kaduna and Aba to improve local production of the product.
On the company’s performance during the period under review, he said that 2016 was challenging due to the impact of high inflation, scarcity of foreign exchange and drop in oil price at the international market.
Vervelde said that government revenue in 2016 was under pressure due to crude oil price crash, which led to low purchasing power. He, however, expressed optimism in the company adapting to policies in the operating environment in order to deliver good return on investment to stakeholders.
He added: “It is anticipated that economic activities will improve in 2017, considering the far reaching fiscal and monetary measures being planned and implemented by the Federal Government. It is therefore hoped that with the gradual rise in the price of oil and a steady increase in the volume of oil output, the naira will be strengthened and forex will be more available for businesses. The brewed product market would remain competitive and consumers are expected to continue the down-trading as they seek for more affordable brands.”
From Uche Usim, Abuja
With 26 energy firms under her watch, Dr.(Mrs) Joy Ogaji, the Executive Secretary, Association of Power Generation Companies (APGC), is saddled with the responsibility of ensuring that her members’ multi-billion naira investments are not crippled by challenges buffeting the sector.
Mrs Ogaji, who also doubles as the Legal Adviser to the Presidential Task Force on Power (PTFP) ,says Gencos in the country are contending with over N500 billion debt owed by the Federal Government, insufficient liquidity, militancy, gas supply challenges, among others.
She said the Gencos are surviving largely on loans from creditors, stressing that letters from the lenders to recover their loans have been nerve-racking.
She said the N701 billion recently approved by the Federal Executive Council (FEC) was for 2017 to 2019 operations, stating that the government has kept mute on previous debts.
In this interview, she reveals that her most recent professional engagement was the transaction monitoring, evaluation and facilitation for the completion and handover of the vertically unbundled assets of the Power Holding Company of Nigeria (PHCN) to private owners and monitoring and evaluating the activities of investors to benchmark them with set standards.
She speaks more about the epileptic power situation in the country and the power sector in general.
Unstable power
I know Nigerians are asking that with the increase in capacity to produce enough power for the nation, why haven’t we seen this newly added capacity when we switch on our fridge, fan or TV? Why is electricity generation not better as promised? Well, the answer is that most of the newly added capacities have been constrained from reaching the end user of the power. The country needs electrical power to feed its industries, which in turn grow the nation’s economy. So, the big questions are one; who constrains the Gencos’ available capacity of 7,500MW from effectively being converted to useable energy? Two, any justification for constraining the available capacities? Three, have the Gencos been receiving their revenue for these constrained capacities, otherwise called deemed capacities, since the constraints are due to no fault of theirs? Now, let me provide the answers.
The grid code demands that all network users, including the Gencos, should, as a matter of rule, obey any instruction from the System Operator (SO). Therefore, despite the Gencos’ efforts to increase their available capacity effectively and nominating same on a daily basis, the SO has the grid right to instruct any Genco to reduce or cut down on its nominated capacity. To safeguard the grid from partial or total system collapse, the SO is justified for issuing such instructions as above. In view of these facts, the legacy Gencos are yet to be paid the deemed capacity since November 2013.
It is imperative to note that for a Genco to nominate any capacity, it means effective commitments has been made as per gas for thermal plants and other equivalent necessary overhead costs, which apply to both thermal and hydro plants. Costs associated with deemed capacity are legitimate costs that must be recovered.
When there are restrictions on the grid either due to load rejection on the part of the Distribution Companies (Discos) or congestions on the transmission network (line cuts, transformer faults, etc.) to evacuate available capacity, the SO instructs the Genco to ramp down on its nominated capacity and the Genco must comply.
In global electricity markets, compelling a generating station to reduce its generation in order to maintain the power grid attracts financial costs as contained in Power Purchase Agreements (PPAs). It is not different in the Nigeria electricity market, which clearly says in the Transitional Electricity Market (TEM) Order No. NERC/14/0008, Section 16B, paragraph 1 & 2 of 2014, that a generator will be paid for the generation capacity utilsed to deliver electrical energy, plus deemed capacity; where deemed capacity is capacity that would have been delivered but for the SO’s instruction to the said generator to derate or reduce its capacity to achieve grid balance and stability.
Payments for deemed capacity over this period has run into billions of naira that would have been used in maintaining generating plants and paying for already purchased/contracted gas and services. Compelling a generator to ramp up and ramp down at unscheduled time affects its equivalent operating hours and stresses the internal parts of the machine thereby reducing the plants’ lifespan.
Generating plants can no longer sustain themselves as the percentage of their revenue received does not cover their operating costs.
Survival
We are surviving on loans because what we get does not cover out operational costs, like I said earlier. History has shown in the past three decades how generating plants were run right to the ground by the defunct NEPA/PHCN without paying attention to scheduled maintenance and overhaul. This new breed of determined operators have continued to maintain standards by increasing their national generation capacity without being paid rightly for their services.
It is only a matter of time for them to run out of funds to maintain the generation capacities and also to produce the much-needed energy for the nation. As a matter of urgency, generation companies are calling on all relevant government agencies to facilitate the payment of the outstanding invoices. We want the Transmission Company of Nigeria (TCN) to improve the reliability of the power grid system to avoid incessant blackouts and incidences of deemed capacity (stranded generation) and maintain grid-acceptable frequency limits of between 49.5Hz and 50.5Hz at all times. In other words, our position is that the total outstanding invoice on deemed capacity must be added to market revenue gap for payment.
Discos’ accounts
The recent development in the industry where the Nigerian Electricity Regulatory Commission (NERC), the sector regulator, has to escrow the account of the Discos is not just a welcome development but also a wake-up call to all participants in the electricity market. With the dwindling commercial performance in the Nigeria Electricity Supply Industry (NESI) and the inability of some stakeholders in the power sector to meet up infrastructure performance targets due to the decline of market funds and its attendant increased debt profile in the entire value chain of the power sector, the account escrow move is good. I mean, what are the Discos afraid of? Recall that Nigeria Bulk Electricity Trading Plc (NBET) repeatedly published that the Discos remitted only 30 per cent of their monthly energy invoices in 2016.
Last October, at a market participants’ workshop in Abuja, Mr. Moshood Saleeman, the Market Operator, which is an arm of TCN, pointed out that if poor collection by Discos continued, their accounts may be escrowed.
About a fortnight ago, the Association of Nigerian Electricity Distributors (ANED) likened such move to centralise their revenue accounts to nationalisation of the Discos. The electricity sector is a value chain, which needs to be remunerated as applicable covering the cost of generation, transmission and distribution. The Gencos are entitled to 60 per cent of market remittance as they do not just generate power but also pay for gas supply and gas transportation.
Transmission charge costs 11 per cent, distribution gets 25 per cent while the remaining 4 per cent is meant for regulatory charges and NBET. The revenue referred to by the Discos are not their personal revenue but market funds to which they were made trustees to collect and remit. The poor remittance of market funds by the Discos has prevented the rest of the electricity value chain from meeting up with their operations and also service their liabilities, which includes gas payments.
Gencos, the supply sector of the industry, can no longer perform required and scheduled maintenance as well as pay for gas supply. The need to monitor the flow of market funds has become necessary as this will enable transparency in the market and also give the regulator the ability to identify issues that will progress the sector and act accordingly in advising the government and stakeholders where funds actually need to be ploughed into the sector in order to bring about self-sustenance and competitiveness.
This very act and stance of NERC and the Federal Government will definitely send positive and promising signals to potential investors as well as generation licensed investors, who are yet to commence construction of generation, that the current administration is ready to make the sector viable and sees the power sector as its top priority and a strategic route to the newly inaugurated economic recovery plan.
The issue of everyone crying wolf should be fast gone. There have been blame games being played by the various players in the sector; it does not matter whose voice is loudest. The truth is, the Gencos have, in keeping with the terms of their contract, generated power which has been sold by NBET to the Discos. What the Gencos want is to be paid fully for power received and sold. If one claims electricity consumers are not paying, let us see the payments transparently.
If centralising the payment system is tantamount to nationalising, the question that comes to mind is: what does selling the electricity and keeping the money all to oneself mean? If Discos claim they are not collecting enough, then they should open their books to make it plain for all to see and confirm their story. He who asserts must prove.
The move by the regulator to bring about transparency in the market and also the plans to declare eligible customers would bring about better performance in the electricity value chain, which in turn, would raise sustainable cash flow for all market participants and reduced tariffs due to competitiveness.
Forex shortage
Despite the lack of payment, our members are going through serious difficulty in accessing forex. We have been calling on the Federal Government to intervene just like they have been intervening in other sectors. We need easier forex accessibility. All our spare parts are sourced abroad. No Nigerian company produces them and we can only buy with dollars. So, forex is a major problem. We appreciate the fact that government is trying to make forex available to everyone but we want a special focus on the power sector because power is the bedrock upon which other sectors can thrive.
N701bn intervention
We were not consulted or engaged before they approved the N701 billion. If they had engaged us, this money would have been more than N701 billion. We would have captured the arrears they owe us. We heard about the money just like you heard. All we know is that FEC approved it and it was announced by the Minister of Power. We do not know how it will be shared. We also don’t know how and when it will come. We were told the money will be be used to pay 2017 to 2019 operations.
Auditors
Yes! it is not just the lenders’ letters that are hurting us. There is so much pressure from auditors. Each year, you have your account audited and auditors don’t know what to do with that money (debt) hanging there. You keep carrying over. Every year, it is balance brought forward. So, they are now questioning our companies that, should we treat this as bad debt? This is because we don’t know when it will be resolved.
It does not have a time line. And once it is treated as bad debt, you know the impact on your company. No foreign investor wants to do business with your company. None will even come near you. No bank will want to loan you any money. So, we are in that precarious situation.
Solar IPPs
It will interest you to know that most of the Solar Independent Power Producers (IPPs) are also our members; both thermal and hydro Gencos are actually going into all these renewables. We’ve discussed with the new ones coming in. Because they have not started generating, they’re still in their initial process, but we are in touch with them.
Members
We have 26 power stations that make up APGC. Some of them have two; like Mainstream has Kainji and Jebba. NIPP has 10 power stations.
Recapitalisation
Recapitalisation, just like re-mortgaging, means you are not meeting your repayment and so on. I’m speaking as a Genco. We have also not been enaged as stakeholders. Before you bring up a policy or programme, engage us as stakeholders so that we discuss the pros and cons. Then you can put it up in public. So, if the government has a recapitalisation plan, I cannot really comment on it until I have the full picture. Just like the N701 billion. We only heard. Is it a loan? Is it a subsidy? Is it a free gift? We don’t know. Until we are fully briefed, I can’t say what our action will be. However, I can tell you that the Gencos will not be affected. They are keeping to the business plan. Go to the Bureau of Public Enterprises (BPE) and ask how the Gencos are performing. In fact, they will tell you they have exceeded their expectations.