FG Concessions N1.56bn Abuja, Lagos Warehouses to MDS Logistics

The News Agency of Nigeria reported that the Director-General, Infrastructure Concession Regulatory Commission, Mr Chidi Izuwah; Minister of Health, Prof. Isaac Adewole, and the Minister of State for Health, Dr Osage Ehinire, attended the signing in Abuja.

Izuwah said that through the Public Private Partnership arrangement with MDS Logistics, the government would no longer have to appropriate large sums of money to effectively store medicines.


He added, “This project is very key in primary healthcare delivery in the country. Some of the benefits of the project include a more efficient and integrated health sector supply chain management and effective storage of pharmaceutical commodities.


“This project also integrates into our National Health Strategy which focuses on protecting our children from diseases and infection by providing a world-class facility for the storage of drugs.”

Adewole said that the ministry, having concluded its first PPP project, was looking into attracting more private investment into the health sector.

The Managing Director, MDS Logistics, Mr Taiwo Ajibola, pledged to keep to the terms and conditions of the agreement by effectively managing and improving the medical storage facilities.

Source: Punchng

‘Bamboo Industry Can Earn Nigeria $22bn Annually’

Bamboo Industry has been identified as a major foreign exchange earner for Nigeria which is itching to diversify its sources of revenue especially from monolithic oil economy to agriculture which was the country’s economic mainstay in the ‘60s.


Due to its wide range of uses Bamboo is considered an excellent source of wealth and prosperity both from domestic and export market and proper harnessing of the industry can earn Nigeria USD22b, from studies conducted by experts.


Confirming this aggregated industry wide study, Abdulkadir Hassan, a development consultant with interest in green economy and renewable energy, said in the past it was called the poor man’s timber but through research and innovation this perception has changed as it has contributed a lot to the global economy.


In an interview with LEADERSHIP, Hassan said today China alone makes about USD50b from bamboo and bamboo products and produces bamboo products for both domestic and export markets. “The market in China has been stimulated over time especially in the 1970s, 80s and 90s, as its farming was encouraged through policies and incentives.


It was used in the afforestation and reforestation of degraded land and incentives in the form of government patronage and subsidies were offered to the farmers. Subsequently after 1998 due to devastating flood, logging was banned and the industry had to use bamboo and related alternatives. This was how the market was developed to the extent that China is now making much from the green gold”, he explained.

The demand in India is about 30 million metric tons per annum and is expected to grow significantly especially with the setting up of National Bamboo Mission, which led to establishment of Cane and Bamboo Technology Centre to develop bamboo value chain for improved livelihood and this is similar to technology park or incubation facility, said Hassan who is also a consultant/adviser on research and strategy to the Coalition of the Northern States Chambers of Commerce, an umbrella platform of the chambers of commerce in the 19 northern states and Abuja. According to him, its economic impacts are many.

In the housing sector for example apart from providing sustainable and affordable housing, it creates chain effects across all economic sectors. Kenya is taking advantage of this as it planned to construct 500,000 housing units using bamboo and other related agricultural waste materials by 2030, in line with the country’s Big Four Agenda aimed at making Kenya an upper-middle income nation.

Considering the fact that over 200 million Africans live in substandard shelter with no access to basic services, bamboo can be used as an option to minimise this challenge. Kenya has also established Bamboo Policy 2019 so as to optimize economic impacts from bamboo.


He said that Bamboo offers an excellent medium for empowerment and inclusive growth and development and is capable of creating jobs, wealth creation opportunities and supporting enterprise development.


He said: “There are about 10 million bamboo farmers in China and over 35 million jobs. Rwanda has recently keyed into bamboo empowerment programme through china Aid Bamboo Project; the project has engaged about 2400 women who are being trained to use bamboo to produce a number of products include household items, kitchen utensils, decorations, bags and so on.’’

Unfortunately, he observed that despite its inherent economic value, Bamboo industry in Nigeria remains undeveloped and untapped due to low level of awareness. “However, as more Nigerians get to know about this important plant, the industry would grow rapidly, taking into accounts its socio-economic and environmental benefits.

Because of its importance it is being given special names in places where there is adequate awareness, such names include ‘green gold’, ‘green resource and miracle plant amongst others,” he said. Bamboo is a tropical and temperate plant and also grows in cold areas and belongs to grass family and is one of the fastest growing plants in the world.


There are over 1400 species of bamboo globally, this makes it possible to determine what species to planted in any place. In fact some species are capable of growing up to 90 centimeters in a day. Bamboo can be harvested between 3 – 5 years; thereafter it continued to regenerate for about 70 years.

This implies one would continue to harvest for a long period, what an attractive investment. Hassan said the plant is mostly found in the forest areas but it can grow in almost all parts of the country, with the largest reserves include Ogun, Oyo, Osun, Delta, Rivers, Cross Rivers and Ebonyi amongst others in the South.


Other large reserves are found in Niger, Kogi, Taraba, Federal Capital Territory, Benue and Nasarawa. It also occurs in Kebbi, Kaduna, Adamawa, Bauchi, Kano, Katsina, Sokoto, Zamfara and Borno amongst others. The ones in the south are thicker and shorter and those found in the north are slimmer and longer and this implied that it can be planted in all parts of the country, as with good practice appropriate species suitable different parts could be used, he added.

He said that there are over 10,000 documented products that can be derived from bamboo, as Nigerians get understand this, the industry would be stimulated, but due to low level of awareness the farming practice is yet to be popular, as most of the reserves occur in the wildness.


“So the value chain is yet to be optimized, as the present level of value addition is micro-fraction compared to what is obtainable in Asia, Latin America and even Europe”, he said. LEADERSHIP reports that Bamboo has a wide range of applications across sectors. In the past the uses were considered traditional but with the increasing level of awareness it has made inroad into knowledge based system through research and innovation.


The uses cut across all the basic needs of life; shelter, food and clothing and due to its diverse uses, globally over 2.5 billion persons benefit from bamboo value chain both direct and indirect impacts, according to Hassan. “It serves as sustainable and alternative raw material for many industries. For example in Bangladesh alone it is used as input for over 45,000 SMEs as well as a number of big players across industries.


It played role in many key inventions; for instance it was used in the development of the first set of air planes, used in the invention first light bulb by Thomas Edison as well as other scientific research activities”, he stated. Also, Bamboo offers more cost effective and eco-friendly building materials thereby addressing the issue of sustainability, he disclosed adding that “Over 1b persons are said to be living in bamboo shelter in the world, mostly in Asia.


The housing sector is responsible for about one third of global greenhouse gas emissions and consumes 40 per cent of global resources. Using bamboo in building and construction would eventually minimize this major challenge, in addition to making access to housing more affordable.

Already innovative architectural designs and concept are fast emerging on the use of bamboo to develop basic and complex buildings, mass housing and industrial projects. Such innovative initiatives would help attaining SDGs, Habitat III New Urban Agenda and Paris Agreement 2015.” In agriculture it is used in fencing, support stands, agro-forestry, soil quality enhancement, production of bio-fertilizer, drying, packaging and so on.


It is also used in the fabrication of agricultural implements and equipment. Even the farming practice of bamboo is also very attractive. With the development of its value chain more farmers would key into its business. Also there exist opportunities in establishing nurseries; in some places even with less than a hectare one can make tens of thousands of dollars from the sale of seedlings.

Hassan further said that in some countries the seedling cost as much as USD30 per pot while in Nigeria it goes for about N300-500, adding, “For example one quarter of an acre can be used to produce 2400 containers, at USD30 each one can earn USD72,000 and in Nigeria at N300 per container that gives N720,000.00.

Another example of innovation is in the making of greenhouse, conventional greenhouse costs about N3 – N5m on average but the alternative one made from bamboo requires about 15-20 per cent of that amount.


DMO makes history as FGN risk-free yield curve extended to 30yrs

The Nigerian debt capital markets (“DCM”) experienced a landmark occasion in April 2019, when the Federal Government of Nigeria (“FGN”), via the Debt Management Office (“DMO”), issued its longest-tenored local currency bond – a 30-year bond – for the first time in history.

The issuance of the ₦53.16bn Fixed Rate (14.80 percent) FGN Bond is a clear indication of the commitment of the improving Nigeria’s ability to raise sustainable debt towards promoting economic growth and national development.

Investors demonstrated their ardent appetite for the issue with the results of the April 2019 FGN Bond Auction revealing that a total subscription of ₦80.41bn was received for the ₦20.00bn offered (₦53.16bn allotted) by the DMO for the 30-year bond, representing an over 400 percent subscription rate. This is a glaring indication of investors’ desire for investments at the longer end of the sovereign debt yield curve.

Whilst the decision to issue a long-tenored bond is not an anomaly, this latest issuance comes almost 40 years after the last 25-year bond (previously the longest-tenored local currency FGN Bond) was issued by the FGN in 1980, following previous issuances in 1976 and 1979.

With the success of this offering, the DMO has, in addition to managing government’s debt sustainably, reinforced its role in the development of the domestic capital market by facilitating the extension of the sovereign debt yield curve, which represents appropriate funding for housing credit and infrastructure as well as an investment opportunity for both pension fund administrators (“PFAs”) and insurance companies looking to reduce mismatches in their asset durations and liability horizons.

The DMO has listed the bond on the platform of FMDQ OTC Securities Exchange (“FMDQ”) to enhance its visibility and promote secondary market liquidity for the bond. The DMO also listed the bond on the Nigerian Stock Exchange.

The capital market community has lauded this audacious move by the DMO, which positions Nigeria to stand amongst other African markets such as South Africa and Kenya which have previously issued 30-year bonds. Nigeria remains the leading West African nation as stakeholders expect this bond issuance to serve as a case study for other countries within the region, to take the plunge by extending their yield curves.

“The introduction of the bond is a welcome development as it creates further opportunities for growth in the Nigerian financial markets,” said Bola Onadele. Koko, managing director/CEO of FMDQ.

“Furthermore, yield curve extension creates more impetus and opportunities for the introduction of risk management (hedging) products such as bond futures and interest rate derivatives to help fund managers (such as PFAs) and insurance companies that have invested in the bonds to manage the interest rate risk, which is typically higher for longer-tenored debt securities. We are aware that FMDQ, the capital market regulators and other market stakeholders are intensifying concerted efforts to launch these hedging products soon to improve the diversity and global competitiveness of the Nigerian financial markets,” Onadele. Koko said.

“The DMO should indeed be congratulated for its proactivity in reaction to the desires of the buy-side which motivated the DMO’s request to one of the Exchanges to conduct a survey to determine the local and international markets’ appetite for FGN Bonds with tenors over twenty (20) years, and also on their impressive speed to action on the feedback received from the exercise, which indicated the considerable interest by the surveyed investors in longer-tenored sovereign bonds,” he added.

Other stakeholders have indicated that the DMO has cleared the path for other issuers such as subnationals and corporates to access longer-term funding for their projects as the 30-year FGN Bond serves as a benchmark for pricing of non-sovereign debt at the longer end of the yield curve.

Onadele. Koko further added that evidence from the recent issuances of the Viathan Funding PLC ₦10.00bn 10-year bond (the first power bond in the country) and NSP-SPV Powercorp PLC ₦8.50bn 15-year bond, both of which were also listed on FMDQ, indicates that corporates are already taking initiative by accessing the DCM to channel funds towards infrastructure and other economically stimulating projects. It is expected that many non-sovereign issuers would follow suit in the short to medium term.

Considering the encouraging success of the debut 30-year FGN Bond, the DMO is encouraged to continue to blaze the trail for the markets. The introduction of more diverse bouquet of long-tenored securities such as inflation-linked, floating rate and zero-coupon bonds, will promote better management of realised and real yields among others. This will indeed support the development of the Nigerian economy by further deepening the domestic DCM, making Nigeria a more attractive investment destination.

Source: Business Day

What to consider before taking a loan

At one point in time or the other, we want to make a purchase, pay for a service or settle an obligation we don’t have the money for immediately.

For many it has been concerning a house of their dream, purchasing a new vehicle, paying children’s school fees or even starting a business.

The inability to meet financial obligations at all times is more common than people would really admit to.

Regardless of your salary size, taking a loan may become necessary in such an instance.

Loans are simply money borrowed in exchange for future repayment at an extra charge, whether they are granted by a banking institution, a credit association or your best friend. The difference, however, would usually be the formality of the loan contract.

Given the obvious backlogs in accessing loans from banking institutions especially the “leg and arm” banks demand as interest and the requirement for a collateral

People are often discouraged from taking loans to meet up with financial challenges as they come up.

However, the inability to access credit has created a new market for many financial technology platforms that now provide loans to individuals and small businesses at affordable rates relative to banks and without the usual cumbersome paper works usually associated with approaching banks for loans.

Peer-to-Peer (P2P) lending and a lot of online borrowing platforms actually help individuals smooth out their consumption by providing the opportunity to put future income to use at a cheap rate than is obtainable at traditional platforms.

While this is a welcome development, many individuals can easily get carried away by the ease and lower cost of borrowing.

On most of these platforms, it takes less than five minutes to process a loan and one can get up to N500,000 on the spot without providing too many documents. In short, it has become money at one’s Beck and Call.

Despite the efficiency brought about by leveraging technology to disburse loans, problems of moral hazard and adverse selection remain.

On the part of the borrower it is aptly put: Not knowing how and what to borrow for because loans are easily accessible.’

If you are about taking out a loan, these considerations are critical so you can avoid the debt trap:

What am I borrowing for?

As humans, we can be very impulsive; you come across a salesman that shows you the best car ever manufactured or your favourite retail store urges you to make a purchase for an item running out of stock.

Even when we are not driven by sentiments we tend to borrow for the wrong reasons or at times take more than we actually need which means paying interest on money that is not productive.

To ensure you borrow for the right reasons, you have to ask yourself if what you are borrowing for is an asset or a liability.

An asset doesn’t necessarily mean buying a property, stock or any investment instrument. An asset is simply anything that adds long-term value to you or your loved ones. It could be your child’s school fees.

Again, your asset help reduces your liabilities. For example, investing in your health.

In any case, you may want to be sure you have commensurate value at least for whatever you borrow for.

Remember the cost of paying for that item is the borrowed capital and the interest rate to be paid. Not just the market price.

So to rephrase, the first question is: what am I getting back in return.

Can I repay the loan, what would it cost me?

The income stream is very important although most creditors would do due diligence to ensure you are able to pay.

What matters is how long and at what cost you would service the loan.

It is very possible to repay a loan and has little left for one’s sustenance.

Oftentimes this leads to a spiralling where the debtor takes on more loan from other sources and is quickly entrapped in debt.

To avoid this, do an honest assessment. If a loan would take more than half your salary to service every month, then it has to be justified by greater returns for the burden from whatever it is used for.

What is the Interest rate offered?

Most online lending platforms offer loans at an attractive rate but nothing beats getting credit at the best rate available.

Before taking out the loan, compare rates so you do not short-change yourself.

Consider that rates being offered critically to see if you would be able to afford the loan. Do not take a loan because the lender offers the best rate in town.

You have to be sure the rate is truly affordable for you.

What is the Collateral?

Although many online platforms have a good Know-Your-Customer (KYC) culture and do not need collateral to disburse loans, it is very good to do one’s research and ensure you consider the collateral requirement in the case where it is required.

Collaterals are like an insurance policy for lenders to exchange for any loss they incur in the events of loan default.

You would want to make sure the collateral is not something way more valuable to you than the loan.

What is the term of the loan?

Loans often time come with clauses that spell out new conditions in the case of a default. The term would often specify the rights and responsibilities of both parties when the borrower misses the repayment schedule. Some terms may spell out a higher rate of interest upon default which would put more burden on the debtor. It is very good practice to know the terms of borrowing.

Alternative means of financing

Considering alternative means of financing is a good strategy to ensure you get to achieve your goal at the least possible cost. You may want to consider for example if your small business needs more debt or equity (sharing ownership with someone who has capital you need) or if asking that friend who wouldn’t ask for much interest for a loan instead.

Source: By Segun Adams

Fidelity Bank signs $50m financing agreement with AFDB

FIDELITY Bank and the African Development Bank, AFDB, have signed a $50 million line credit to support small and medium enterprises (SMEs), with 30 percent of the fund to be reserved for female entrepreneurs. Fidelity Bank Managing Director/ Chief Executive Officer, Fidelity Bank, Nnamdi Okonkwo, disclosed this on the sidelines of the Balogun Business Association rally held in Lagos.

Okonkwo said: “My team and I are actually here to get first hand information of what our customers’ need and to do a self-check. Have we satisfied them service wise? Are there areas we can support them?

As you are aware, just yesterday, we signed $50 million service support fund agreement with the AfDB, 30 percent of this will be going to female entrepreneurs. We have a huge number of such entrepreneurs in this market. So it is more than just a coincidence that we are here today to connect with our customers and know how we can serve them better.

” Fidelity Bank rewards customers with N68m On the criteria for accessing the fund, he said: “Fidelity Bank is a strong supporter of SMEs. Most of them are accessing funds at nine percent under the various intervention scheme and for those who do not qualify for the single digit loans they borrow at the commercial rate but as much as possible, we try to make sure we provide a single digit loan for these customers using the various windows available.

“As you know, the world is about sustainability and inclusion. As you know as well women are mostly, in the entire world, by culture, excluded in a way that they have been fighting to actually achieve a balance and Fidelity Bank is very mindful of this. If you look at our executive board, we have the highest number of females than any other bank in this country in terms of Executive Directors.

That is one way that Fidelity Bank is saying that we are a gender-sensitive organization. Now for that reason as well, when you get a facility like the $50 million and thirty per cent is set aside just for women entrepreneurs, it is another step by Fidelity Bank to continue to ensure gender balance.

That is basically why we are doing that.” Speaking on the connection between the bank and BBA, Okonkwo said: “We simply came here to connect with our customers. This is Balogun Business Association Plaza, Lagos Trade fair complex.

Fidelity as you know, we do not only serve the corporate end of the market, we also serve the middle and the lower class of the market. We are very strong in SMEs and most of these people here are SMEs. They are the engine hub of trade and commerce in this country and in line with our customer forum calendar we do this occasionally, we come out here.”

Source: By  Elizabeth Adegbesan

Nigeria’s Iron, Steel Sector Challenge And Quest For Industrialisation

The Nigerian iron and steel industry established as a basis for industrialization has remained unproductive even as the year 2020 targeted for the country to become one of the world’s top 20 economies is barely six months away.

In its drive towards becoming one of the most industrialised economies in the world by harnessing the human and natural resources that abound in its geographical space, the Nigerian government at various times over the years, initiated several economic reform policies and targets, none of which can be said to have been successful as their objectives were largely unmet.

A vibrant iron and steel sector is necessary for the infrastructural and technological development of any nation. Nigeria is blessed with all the raw materials required for steel development including iron ore, coal, natural gas and limestone.

Under the third national development plan (1975 – 1980) specifically between 1976 and 1978, Nigeria commenced the construction of two integrated iron and steel plants located at Ajaokuta (Ajaokuta steel company-ASC) and Aladja (Delta steel company-DSC) and three rolling mills at Oshogbo, Jos and Katsina.

The 1.3 mtpa ASC is based on blast furnace/basic oxygen furnace (BF/BOF) technology with rolling product capacity of 5.2 mtpa. DSC has a 1.0 mtpa steel melting plant for the production of 0.96 mtpa of billets and 0.32 mtpa of rolled products, while supplying 210,000 tonnes of billets each to Oshogbo, Jos and Kastina rolling mills.

These projects were expected to kick start a vibrant iron and steel sector in Nigeria. However, due to several factors including political, technical, logistical and managerial challenges, all these publicly-owned iron and steel companies folded up in Nigeria.

The privately-owned iron and steel companies, which are mostly rolling mills that were dependent on the integrated mills for billets are now threatened due to lack of raw materials. The publicly-owned iron and steel companies (ASC, DSC and the three inland rolling mills) were privatised in 2000- 2005, yet most of them are still moribund. According to a recent stud ,

Nigeria is endowed with all the major raw materials needed for the production of iron and steel including 3 billion tonnes of iron ore, 3 billion tonnes of coal, and limestone in excess of 700 million tonnes and 187 billion SCF of natural gas.

The annual estimated per capita consumption of iron and steel in Nigeria increased from 5 kg in 1968 to 130 kg in 2012. Planning for the Nigerian steel sector started in 1958, but over 50 years after, the country was yet to establish a stable iron and steel sector despite huge investments of over $ 9 billion.

Despite the huge investments, the Ajaokuta Steel Company (ASC) failed to take off, while Delta Steel Company (DSC) and the three government-owned inland/satellite rolling mills in Oshogbo, Jos and Kastina are moribund, working under low capacity utilisation.

The reasons for the poor performance of the Nigerian steel sector include inadequate funding, poor planning and implementation and political influences  Until recently, the nation’s steel requirement was substantially met since independence by imports from western nations particularly US, Great Britain, Germany, Japan and recently, by relatively cheap and sub-standard steel from some Asian nations. The country is now spending a large portion of her foreign exchange for the importation of steel products, while still investing heavily in the domestic production of steel.

This is double jeopardy. The privatisation that was carried out in 2004 – 2005 did not revive the sector, but rather transformed the companies to private monopolies. Because the two integrated iron and steel companies in Nigeria (ASC and DSC) are unable to produce billets for the 20 steel rolling mills in the country, the sector is dependent on imported billets. But due to the high cost of billet importation, many steel companies are unable to function.

The few steel companies that are operational though at low capacities have had to depend on recycling of scrap iron and steel obtained mostly from municipal solid wastes. Policies and legal framework are very important to guide development activities of any nation.

Nigeria has released several fiscal and economic development policies. Vision 20: 2020 economic blueprint as approved by the federal executive council (FEC)  clearly recommended that the nation shall produce 12.2 million tonnes of steel per annum by the year 2020 out of which Ajaokuta steel plant is to produce 5.2 million tonnes/ annum, DSC to produce two million tonnes per annum and the remaining by private entrepreneurs if Nigeria is to join the league of 20 industrialised nation by 2020.

Fortunately enough, most of the policies and programmes rolled out by government since the outset of this sustained democratic experience in Nigeria in 1999 such as the vision 2010, the 7-Point Agenda among others, which are now in the trash can of history having largely failed to achieve their objectives, and even the still valid Vision 2020:20 and the diversification agenda of the present administration, have similar goals-to reform the economy by revamping the non-oil productive sectors such as agriculture and solid minerals with a view to boosting local production, manufacturing and infrastructure development and ultimately transforming the country to an industrial cum economic giant among the committee of nations.


Nigeria has had two different administrations since the adoption of Vision 20:2020, each having its own economic growth plan. Under President Jonathan the Transformation Agenda was the focus. With President Buhari, it is the Economic Recovery and Growth Plan (ERGP).

However, it is noteworthy that the three plans have been predominantly based on the bedrock of driving economic expansion and an inclusive growth i.e. growth that advances equitable opportunities for every section of the society.

Going by all economic indicators now, it appears Nigeria is not prepared to take a place among the top 20 economies in 2020, which is six months away, as envisaged by Vision 2020, especially as the iron and steel sector which ought to be the chief driver of the revolution is still in limbo even as billions of naira have been sunk into developing it.

Sadly enough, the Ajaokuta Steel Company which was established at the close of the 1970s as the nation’s backbone of industrialisation and the Itakpe iron ore project meant to supply the raw materials, all in Kogi State, have remained uncompleted, about 40 years down the line, despite the huge chunks of taxpayers money expended on them over the years.

The Ajaokuta integrated steel complex was conceived and steadily developed with the vision of erecting a Metallurgical Processing Plant cum Engineering Complex with other auxiliaries and facilities.

The complex was meant to generate important upstream and downstream industrial and economic activities that are critical to the diversification of the economy away from oil which has been the sole source of wealth over the years.

Ajaokuta Steel Plant has therefore aptly tagged the bedrock of Nigeria’s Industrialisation. While the project was expected to directly employ about 10,000 staff at the first phase of commissioning, the upstream and downstream industries that were to evolve all over the nation thereafter were to engage not less than 500,000 employees.

The plant by 1994 was reckoned to be at 98 percent completion in terms of equipment erected. Some completed units of the plant reportedly operated at different times but had to short down due to non-availability of the fund. And an audit carried out at the instance of the Ministry of Mines and Steel Development about a year ago to ascertain the state of Ajaokuta before investing in it towards completion, revealed that the internal infrastructure required to operate the complex was about 98 percent completed.

Receiving the report, the ministry assured that with the concerted effort of Mr President towards funding the project to its logical conclusion, the jinx which has kept Ajaokuta in the pipeline for 40 years would be broken. But while responding to questions from the press at the close of 2018 as to why Ajaokuta has not taken off in spite of recent government interventions, the minister noted that the company cannot commence operation yet even if it was 100 per cent built because of the the complex infrastructures, some internal, others external that have to be in place for its operation to successfully commence and be sustained. He said,

“The steel company is not yet functioning because its infrastructural requirements such as specific rail system, dredging of Lokoja and Warri ports among others which are at various stages of completion. “Ajaokuta is 98 per cent completed.

Everything is in place and we have our workers there that are maintaining the place. The remaining two percent has to do with external infrastructure. We need waterways. We need viable ports and so on.

The government is putting all these things in place now. “Even if it was completed 100 percent it would not be able to operate. If we are to bring in all the raw materials required from Itakpe, as the iron concentrate required, you need 750 trucks traveling each day to feed Ajaokuta. Imagine 750 trucks on Ajaokuta-Itakpe road daily.

The road will be bad in one week. “The policy of the government is that it will not release Ajaokuta steel just like that; what we are planning to do is to regulate and create enabling environment for the company to strive,’ he stated further. In all of these, where is the hope of making Nigeria count among the 20 industrialized economies in the world as expected? Where is the hope of accomplishing the Vision 2020:20 objectives in the coming year 2020? Did Nigeria not start this journey to industrialization with its contemporary Third World countries then like China, India and others who are now heavyweights among the industrialized nations? What actually has been going wrong?

These are some of the questions that readily come to mind in view of the quagmire that has engulfed the Nigerian metallurgical industry over the years. To become one of the top 20 economies in 2020, Nigeria has to outperform other countries above it on the gross domestic product (GDP) ranking in 2018 and 2019.

It must step up its efforts to improve economic growth. Although the present administration has been more focused on the ERGP, if it coordinates this strategy with robust annual expenditures and favourable monetary policies, that will improve the performance of the economy. , it is hoped that the country will look back at 2010 and point to significant progress.

Source: By  ABAH ADAH

CBN Moves To Halt $4bn Capital Flight In Textile Sector

The Central Bank of Nigeria (CBN) yesterday took bold steps to reverse the $4billion Nigeria spends annually on imported textiles and ready-made clothing by kicking off the distribution of cotton seeds and other inputs to farmers in Katsina State.

CBN governor, Mr. Godwin Emefiele, who flagged-off the distribution of cotton seeds and other inputs to 100,000 farmers in Katsina State for the 2019 farming season under the CBN-Anchor Borrower Programme, said that the gesture was aimed at reviving the country’s moribund cotton, textile and garment sector. He noted that the past 20 years had been very difficult for the cotton, textile and garment sector resulting in 130 firms in the industry being shut down.

To sanitise the system, the apex bank threatened to blacklist individuals, banks and companies involved in illegal textile importation so that the local players can survive and remain in business.

Emefiele said: “Farmers and processors have had to deal with low-quality seeds, rising operating cost and weak sales due to high energy cost of running factories, smuggling of textile goods and poor access to finance. Smuggling of textile goods alone is also estimated to have cost the nation over $2.2billion.’’

According to him, Nigeria was home to African largest textile industry with over 180 textiles mills in operation, which employed close to 250,000 people but “only 25 textile factories are operating today, and the workforce stands at less than 20, 000 people.”

He explained that the CBN resolved to initiate support measures that would drive productivity in the critical sectors of the economy following the over 60 per cent drop in crude oil prices from 2015 to 2017 and its attendant effects on economic growth, inflation and the nation’s external reserves.

The distribution of the cotton seeds to farmers is targeted at improving the commodity’s production from 80,000 tonnes in 2018 to over 300,000 tonnes by 2020 and reviving Nigeria’s cotton, textiles and garments sector.

Emefiele who reiterated that the foreign exchange restriction on finished textiles and other 42 items remained in force noted that the smuggling of textile goods alone was also estimated to cost Nigeria over $2.2 billion annually.

The CBN governor said that the measures taken by the apex bank were yielding results and had helped in driving interest by potential investors who are seeking to make investments to support improved production of textiles in Nigeria.

To curb smuggling, Emefiele said that the CBN was gathering data about and investigating the accounts of individuals and corporate entities involved in smuggling and dumping textile materials in Nigeria with a view to blacklisting them, adding that all banks in Nigeria would be barred from conducting any banking business with such companies, their owners and top management.

He further said that the CBN had identified insufficient cotton seeds as one of the major challenges facing Nigerian farmers, hence the apex bank sought to change the narrative on the cotton and textile industry through the distribution of high yielding cotton seeds to the beneficiaries.

The provision of the seedlings to more than 100,000 farmers cultivating over 200,000 hectares of farmland, along with extensive training on proper farming techniques, Emefiele said would boost the production of high grade cotton lint at much-improved yields of up to four tonnes per hectare, from the current cultivation rate of less than one tonne per hectare. He added that the move would also reduce the amount spent by Nigeria on imported textiles and ready-made clothing estimated at about $4billion annually. Nigeria in the 1970s and early 1980s was home to Africa’s largest textile industry, with over 180 textile mills which employed over 450,000 people, representing about 25 per cent of the workforce in the manufacturing sector.

Emefiele recalled that the industry was supported by the production of cotton by 600,000 local farmers across 30 of the 36 states of the federation, thousands of ginnery workers who processed the cotton from farmers, and a large number of distributors who sold the finished cloths to consumers.

He, however, expressed regrets that the farmers and processors had to deal with low-quality seeds, rising operating cost and weak sales due to high energy cost of running the factories, poor access to finance and smuggling of textile goods, which he estimated cost Nigeria over $2.2 billion annually.

He lamented that only 25 textile factories were currently operating in Nigeria with a workforce of less than 20,000 people, stressing that a large proportion of clothing materials were being imported from China and European countries Emefiele disclosed that no fewer than 130 textile companies had closed shop in the country in recent times due to various constraints.

He told Governor Masari that ‘‘textile industries used to be the largest employers of labour in Nigeria after the public service but due to certain constraints, such as smuggling, dumping, lack of access to finance and issue bordering on power, over 130 textile companies have so far perished. Today, we are complaining about insecurity and kidnapping, the reasons for these are joblessness and hopelessness; so, we need to do something about it.

We must revitalise the textile industry to be the largest employer of labour, we feel that we will set the stage rolling, we must come to Katsina State which is the largest producer of cotton to begin a process.’’ He said that the CBN has held a lot of meetings with the farmers and other people on the value chain on how to achieve the desired success and urged Nigerians to stop smuggling and dumping of cotton and textile materials in order to revive the industry. In his remarks, Masari said that agriculture was the next sector that the state government accorded priority after education.

He said that reviving the textile industry was the biggest and quickest way of solving unemployment in the country and commended the CBN for its efforts in that direction. Masari, however, urged the apex bank to review the procedures for accessing loan facilities by the farmers.

Masari insisted that agricultural revival was akin to breathing life into the people of Katsina State, adding that if the sector was provided with the necessary support, it could employ over 80 per cent of Nigerians.

“The best and quickest way to fight poverty is through agriculture because investment in agriculture will start yielding dividends only after six months and in every planting season and with so many dams around the country, we can produce 12 months in a year,” Masari said. Welcoming the stakeholders, the deputy governor, who doubles as the commissioner for Agriculture, Alhaji Mannir Yakubu, said that about N19 billion had been spent on agriculture by the Masari-led administration in the past three and a half years.

He said: “The funds released for the implementation of the agricultural activities are aimed at boosting agricultural production and the provision of employment to our teeming population particularly the youths. It is in the light of this that the state government has provided facilities, incentives and enabling environment to ensure small-scale farmers in the state are engaged massively all the year round,” he added.

The minister of Agriculture and Rural Development, Chief Audu Ogbeh, said that the reforms initiated by the Emefiele-led CBN had helped Nigeria to escape the economic crisis far worse than the situation in Venezuela today. Ogbeh, who led the apex bank’s chief executive on the courtesy call on Governor Masari, commended the courage of Emefiele in initiating the Anchor Borrowers Programme at one digit interest rate.

He said: “It’s one of the greatest things that has ever happened in this country in the last 40 years and I am in a position to say so because I have been around in the system.

I want to commend you, the CBN governor, for being so tenacious in following this up.” Ogbeh continued: “If this CBN administration had not decided to invest in this method of bypassing the obstacle and mountains standing in the way of agricultural development, by now this country would have been in far worse than the situation in Venezuela because accessing the credit had always been the problem.”

The minister stressed that the revival of the cotton industry remained imperative to stem the collapse of the industry and its implications for the economy in terms of job loss and taxes.


N2.15bn currency in circulation in March – CBN

The Central Bank of Nigeria yesterday put the total value currency in circulation as of March this year at N2.15 billon. Mrs Eli Kwaghe of the Currency Operation Department of the CBN disclosed at a two-day CBN fair in Makurdi in Benue State.

She said: “8.88 billion pieces valued at N2.15 billion currency in circulation as at March 2019 ending.

” Earlier the branch controller of the CBN in Makurdi, Abba Bulus Ibrahim, said the bank’s mandate could only be achieved when everybody partnered with it in line.

The coordinator of the fair, Sam Okogbue, said the CBN had further interventions to make the country’s economy grow so that people would come out of poverty by improving their living standard in all ramifications.

Source: By Hope Abah Emmanuel

FSDH raises shareholders’ dividend by 38.91% leverages technology for growth

FSDH Merchant Bank group, which marked seventh year of operating as a merchant bank this year,  has declared a total dividend of N3.07 billion to its shareholders for the financial year ended 31 December 2018.

This represents a 38.91 percent increase over the level of N2.21 billion it paid to the shareholders in the corresponding period of 2017. The amount translates to N1.10k per share as against N0.79k per share in 2017.

FSDH Group achieved a profit before tax (PBT) of N6.7 billion for the financial year ended 31 December 2018, representing an increase of 21.4 percent from the profit of N5.57 billion for the year ended 31 December 2017.

Profit after tax (PAT) attributable to the group increased by 13.2 percent to N5.37 billion from N4.74 billion for the previous year.

Earnings per share (EPS) for the group was 166 kobo, which was 2 kobo more than the 164 kobo earned in the previous financial year.

During the period under review, all its subsidiaries posted profits. Consequently, FSDH Asset Management (FSDH-AM) recorded a PAT of N326.87 million, while the PAT recorded by Pensions Alliance Limited (PAL) and FSDH Securities (FSDH-SEC) were N1.47 billion and N64.16 million respectively.

Speaking at the annual general meeting in Lagos, Femi Agbaje, Chairman, said, “We expect that the Nigerian economy will continue to recover in the short-to-medium term. The expected increase in activity in the Nigerian economy should offer growth opportunities for many sectors of the economy”.

Hamda Ambah, managing director/CEO of the bank, said the bank remains committed to fostering mutually beneficial relationships with our customers by providing tailored solutions that meet their specific needs.

“The FSDH Group will continue to work within a robust risk management framework leveraging on technology”, she said.  “By deploying technology, we will be able to further leverage same to bring funds cheaply and more like the commercial banks”.

“We will also continue to collaborate with like-minded partners to develop innovative financing and investment solutions which will enable us to exploit emerging opportunities and create shared prosperity in 2019”, she added.


Nigeria faces mixed oil market outcomes as China-US trade war intensifies

Concerns that the rising China-US trade dispute could slow the global economy and that US sanction on OPEC members, Iran and Venezuela, will further tighten the oil market present Nigeria with mixed fortunes.

Slower global economic growth as a fallout from the trade dispute between China and the United States of America means less demand for oil, because oil demand is a function of economic activities. Less demand for oil implies oil prices will start falling, which is some bad news for Nigeria. But a tightened oil market will further shore up prices, good news for Nigeria’s economy managers.

Brent crude oil futures were at $71.12 per barrel at 0710 GMT Tuesday, 12 cents, or 0.2 percent, below their last close. US West Texas Intermediate (WTI) crude futures were at $62.30 per barrel, 5 cents above their last settlement.

Nigeria, Africa’s biggest crude producer, is exposed either way to whatever happens at the international oil market because its economy is still heavily dependent on its petroleum sector. Oil still makes up 90 percent of foreign exchange and 80 percent of government revenue but contributes less than 10 percent of gross domestic product.

Against this backdrop, Oyindamola Adedokun, outcome lead, revenue stream at FOSTER, an Oxford Policy Management programme, says it is time to take out fuel subsidies and put a proper stabilisation mechanism in place as buffer.

“Nigeria’s revenue this year is going to fluctuate, given these two major factors in the global oil market,” Adedokun said. “We are just barely out of a recession and if nothing is done to fix the petroleum sector, Venezuela may be our destination.”
Maritime consultancy and shipbuilding tanker brokerage Eastport said in a note that “worsening trade friction between Washington and Beijing poses a downside risk” to its forecasts for petroleum products.

The US sanctions have already halved Iranian crude oil exports over the past year to below 1 million barrels per day (bpd), and shipments to customers are expected to drop to as low as 500,000 bpd in May as sanctions tighten.

Beyond Iran, Washington has also placed sanctions on the Venezuelan government under President Nicolas Maduro, disrupting supplies from the country, a founding member of the Organisation of the Petroleum Exporting Countries (OPEC).

“As sweet as Nigeria’s crudes are renowned to be globally, we have recently lost our most-valued customers and our gas buyers are themselves now competing with us in the same market space as suppliers,” Luqman Agboola, head of infrastructure at Sofidam Capital Limited, told us.

One of the assumptions undergirding Nigeria’s 2019 budget is crude oil estimate of $60 per barrel. But with Brent at $71 per barrel, Africa’s most populous economy has opportunity to save $10 on each barrel of oil sold. The catch, though, is that there is no constitutional backing to save money from sales of crude oil above the budget benchmark, which is supposed to go into the Excess Crude Account domiciled at the Central Bank of Nigeria.

“There is no legal backing for the excess crude account. The Constitution says revenue accruing to the Federation Account should be shared; there is no provision to save for future generations,” said Oby Ezekwesili, who was part of the economic team under former President Olusegun Obasanjo that proposed the establishment of ECA.

This means the economic wellbeing of Nigeria and its citizens remains significantly exposed to external shocks, driven by whichever direction oil prices go.


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