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Power Sector Reforms Must be Completed

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Power

The President, Lagos Chamber of Commerce and Industry, Dr. Nike Akande, discusses how to move the nation’s economy forward in this interview with Anna Okon

What is the nation’s economic outlook for 2016?

With the cabinet in place, ongoing budget processes, drive for economic diversification, concerted efforts against corruption and the various reforms in the critical sectors, we expect to see positive developments in the economy.

This year (2016), Gross Domestic Product growth is expected to rebound, though slowly, if the right mix of fiscal and monetary policies is put in place to stimulate the economy and attract domestic and foreign investments.

While the recovery is expected to be driven by increase in government expenditure, the growth in oil sector may be constrained still by low price and dragging investment drive.

The Treasury Single Account is also expected to plug leakages, curb corrupt tendencies, increase revenue to government and thereby improve funding for government projects.

The Managing Director, International Monetary Fund, Christine Lagarde, recently paid a visit to Nigeria. The core of her visit were issues bordering on drastic fall in government revenue occasioned by the plunge in global oil prices, budget deficit financing, economic diversification and lots more. What is your take on these issues?

We must recall that the new political administration led by His Excellency, President Muhammadu Buhari came into power on May 29,, 2015 at the time the country was facing serious economic challenges as you earlier highlighted.

The challenge faced by the economy, as a result of the decrease in oil revenue, which prompted fiscal imbalances, is a global phenomenon especially among the oil-exporting countries. We need international cooperation and partnership as there is, obviously, no easy way out of the crisis. Therefore, the visit of the IMF boss is, indeed, timely as it offers us the opportunity to deliberate on these issues towards fostering the international partnership and cooperation, especially with the Fund.

Above all, the government needs to develop other sectors of the economy like manufacturing, agriculture and solid minerals and service sectors to strengthen the current economic cord.

The way to do this is to create an enabling environment in terms of the right infrastructure, affordable long-term financing and the right policies.

Nigerians are very enterprising. Once the environment is right, Nigerians will make things happen. We also need to patronise made-in-Nigeria products to encourage our local manufacturers.

There had been persisting scarcity of petroleum products leading to long queues at filling stations, traffic congestion on the roads and loss of man hours. What is LCCI’s position on the downstream petroleum sector?

The persistent fuel crisis in Nigeria again underscores the need to urgently review the current policy framework of the oil and gas industry, especially with regard to the petroleum downstream sector. We commend the efforts of the government in revamping the refineries with a view to reducing our fuel importation in the coming years. We hope to see a situation where eventually all our refineries are operating optimally and the private sector should be encouraged to participate more in the sector thereby creating jobs for Nigerians.

The private sector is ready to partner the government to make these efforts work as government must not be left alone in these endeavours.

How have your members been coping with the challenges of electricity supply and consumption in Nigeria? And what is the way out?

The power situation has been a challenge from time past and fixing it will require consistent investments in that sector. The present administration has shown that power supply is one of its top priorities.

The Honourable Minister of Power, Works and Housing, Mr. Babatunde Fashola, who was the governor of Lagos State, is known to be a go-getter.

I believe private sector businesses are ready to pay for electricity once it is available. I urge the government to continue with the pace of reforms in the sector to ensure that more electricity consumers have meters.

You are the second female president of the LCCI in its 127-year history. How would you assess the leadership opportunities for women in the corporate world in Nigeria? And what is the Chamber doing to encourage women entrepreneurs?

Women are doing well in many spheres of the corporate world. For instance, the Chairmen of First Bank, Access Bank and Guaranty Trust Bank are all women. We also have many women as Chief Executive Officers of big organisations across all sectors. We are doing well. But we can do better.

The ratio, to a large extent, is still skewed towards men. The LCCI has a vibrant women group which focuses on the advancement of the interest of women. They seek opportunities for women in all areas of enterprise and finance. They also collaborate with embassies and international organisations that have programmes for women.

In addition, the Chamber has a robust mentoring programme for young people to make them entrepreneurs. We attach these young people to our members for a period of time to teach them and share experience with them on managing businesses. The third batch of about 35 mentees graduated only a few weeks ago. We also train young entrepreneurs to build their capacities in different areas of business.

You are a two-time Minister of Industry. What was the experience like? And how would you assess the present administration from a private sector point of view?

First of all, my experience as a two-time Minister of Industry was very exciting and yet challenging. But I thank God for the opportunity to serve my country at such a high level.

During my tenure, we set up industrial development centres all over the country to support industrialisation, especially small scale industries. I also supervised many parastatals that interfaced with investors. One of them was the Nigerian Industrial Development Bank, which is now the Bank of Industry.

I have also supervised the Benue Cement Company, the Machine Tools, Oshogbo and many more.

Frankly speaking, the government has been doing a great job fighting terrorism. You know you cannot do business when security is not guaranteed.

Also, the government has also been doing a lot in fighting corruption which is also one of the biggest problems we have in the country.

With the new budget and some new policies, I am sure we will have more programmes and activities this year. We will continue to give government the necessary support to make the country better.

As the new President of the Lagos Chamber of Commerce and Industry, what is your vision for the chamber and how do you plan to achieve it?

First of all, I give glory to the Almighty God for the opportunity to serve my country on this platform and in this capacity. I am also grateful to members of the LCCI for electing me. Being the President of the Chamber is, indeed, a great task. I will, therefore, be resolute in contributing my quota to the advancement of the cause of the Nigerian private sector and the progress of our economy as a whole.

Furthermore, while a lot has been done by all my predecessors towards achieving the core objectives of the Chamber, I am prepared to build on their worthy legacies by pushing the frontiers as regards strengthening the effectiveness of the LCCI advocacy and research activities to create a more conducive environment for investors.

We will also work towards putting in place strategic innovative programmes to attract and retain more members across sectors. In fact, since my assumption of office, quite a number of people have shown interest in joining the Chamber.

Also, we will diversify our trade fairs and exhibitions to cover more sectors and specialised exhibitions thus making it the best in Africa.

We aim to consolidate on the landmark achievements of our training arm through which we embark on capacity building for Small and Medium Enterprises.

We are looking at improved close collaboration and partnership with federal and state governments as well as the private sector to improve the business environment.

Is the CEO/Founder of Investors King Limited. A proven foreign exchange research analyst and a published author on Yahoo Finance, Businessinsider, Nasdaq, Entrepreneur.com, Investorplace, and many more. He has over two decades of experience in global financial markets.

Economy

Nigeria’s Plan to Review Oil Companies’ Gas Flaring Strategies

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Oil

Nigeria is ramping up its efforts to address environmental concerns in the oil and gas sector with a comprehensive plan to review gas flaring strategies of international and indigenous oil companies.

The Minister of State for Environment, Dr. Iziaq Salako, announced this initiative during a national stakeholders engagement meeting on methane mitigation and reduction held in Abuja, Investors King reports.

Gas flaring, a common practice in the oil industry, releases methane—a potent greenhouse gas—into the atmosphere, contributing to climate change and posing health risks to communities near oil facilities.

Nigeria aims to end routine gas flaring by 2030, aligning with global climate goals and commitments.

Dr. Salako explained the importance of reducing methane emissions and highlighted the detrimental effects on public health, food security, and economic development.

He outlined practical steps being taken to tackle methane emissions, including the development of methane guidelines and the engagement of government institutions.

The ministry, through the National Oil Spill Detection and Response Agency, will conduct periodic reviews of oil companies’ plans to ensure compliance with the gas flaring deadline.

Deloitte management consultants will assist in conducting comprehensive forensic audits to scrutinize the legitimacy of forward-contracted transactions.

President Bola Tinubu’s commitment to environmental sustainability underscores the government’s dedication to addressing climate change and fulfilling its multilateral environmental agreements.

The engagement event served as a platform for stakeholders to discuss methane mitigation strategies, existing policies, and implementation challenges.

Collaboration and dialogue among diverse sectors are crucial in charting a unified course towards sustainable methane reduction in Nigeria’s oil and gas industry.

As the country navigates its environmental agenda, ensuring accountability and transparency in gas flaring practices remains paramount for achieving a greener and healthier future.

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Economy

Interest Rate Jumps to 24.75% as CBN Takes Aggressive Stance Against Inflation

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Dr. Olayemi Michael Cardoso

The Central Bank of Nigeria (CBN) has announced a significant increase in the monetary policy rate, known as the interest rate, to 24.75%.

This move disclosed by CBN Governor Olayemi Cardoso during the 294th Meeting of the Monetary Policy Committee press briefing in Abuja, represents a bold step by the apex bank to address the mounting inflationary pressures faced by the country.

With inflation soaring to 31.70% in February, the CBN aims to moderate this upward trend by tightening its monetary policy stance.

This decision follows the previous hike in the interest rate to 22.75% in February, showcasing the CBN’s commitment to combatting inflationary forces.

While the bank opted to maintain the Cash Reserve Ratio at 45%, the significant increase in the interest rate underscores the urgency of the situation and the need for decisive action.

Governor Cardoso emphasized that these measures are essential to stabilize the economy and safeguard the purchasing power of the Nigerian currency.

The 294th MPC marks the second meeting under Governor Cardoso’s leadership, indicating a proactive approach to addressing economic challenges.

The next MPC meeting is scheduled for May 20th and 21st, 2024, highlighting the ongoing commitment of the CBN to navigate Nigeria’s economic landscape amidst inflationary pressures.

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Economy

Nigeria Braces for 10th Consecutive Interest Rate Hike by Central Bank

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Central Bank of Nigeria (CBN)

As Nigeria grapples with persistently high inflation, the Central Bank of Nigeria (CBN) is gearing up to implement its tenth consecutive interest rate hike in a bid to curb the soaring prices and attract investment.

Analysts surveyed by Bloomberg are anticipating a substantial 125 basis-point increase in the key rate to 24%, marking one of the most significant adjustments in the current tightening cycle.

The decision, expected to be announced by Governor Olayemi Cardoso on Tuesday at 2 p.m. in Abuja, comes on the heels of inflation accelerating to 31.7% in February, far surpassing the central bank’s target range of 9%.

This surge has been primarily attributed to the sharp depreciation of the naira, prompting authorities to devalue the currency twice since June to narrow the gap with the unofficial market rate and encourage investor confidence.

While these measures have seen the naira strengthen in recent days and bolstered investment inflows, including a fourfold increase in overseas remittances and significant foreign investor portfolio asset purchases, there remains a palpable need for more decisive action.

Giulia Pellegrini, a senior portfolio manager at Allianz Global Investors, emphasized the necessity for the CBN to intensify its tightening efforts to regain foreign investors’ confidence in the local bond market.

While acknowledging the positive strides made by the central bank, Pellegrini stressed the importance of a more assertive approach to prevent the diversion of investor attention to other frontier markets.

As the Nigerian economy navigates through these challenging times, the impending interest rate hike signals the CBN’s determination to address inflation head-on and foster a more stable economic environment.

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