The Minister of State for Solid Minerals Development, Mr. Abubakar Bawa-Bwari, said on Thursday that the Federal Government had spent over $10bn on the Ajaokuta Steel Company in the last 35 years.
He also said the government escaped paying damages in excess of $525m to Global Infrastructure Holdings Limited by signing a modified concession agreement with the latter to enable the firm to retain the National Iron Ore Mining Company, Itakpe. The modified seven-year concession agreement was signed on August 1, this year.
NIOMCO was designed to feed Ajaokuta Steel Company with the requisite raw materials to produce steel, but both firms have made little progress.
Bawa-Bwari, who appeared before the House of Representatives Committee on Privatisation and Commercialisation in Abuja, said, “The most important thing is that everybody agrees that Ajaokuta should work. We have spent over $10bn over 35 years and we cannot afford to continue to waste more time.
“This modified agreement is the best option available to government today. This agreement will free us from all the legal issues. We will monitor it and ensure that the GIHL too keeps to its promise that they have turned a new leaf.”
The minister spoke amid protests by steel sector stakeholders, including workers, host communities and the Bureau of Public Enterprises.
Bawa-Bwari said that the present administration signed the agreement to free NIOMCO, Ajaokuta Steel Company and the Delta Steel Company, Ovian-Alaja, from the ‘legal encumbrances’ that had stalled the operations of the steel firms for several years since they were first privatised in 2004.
The minister said that it was the administration of former President Goodluck Jonathan that first initiated the modified agreement with the GIHL in 2013 as part of ‘out of court settlement’ for the government’s breach of the original agreement it signed with the Indians in 2004.
He said that the initial concession was to last 25 years with a provision for “automatic renewal.”
However, the minister said the late President Umaru Yar’Adua reversed the privatisation of NIOMCO in 2008 without meeting the requirements of the clauses built into the agreement.
He added that the GIHL reacted by dragging the government before the Court of Arbitration, further crippling the operations of NIOMCO and other steel firms tied to it.
The minister explained how, acting on legal opinion by the Office of the Attorney-General of the Federation, the Jonathan administration opted for an out of court settlement in the form of a modified concession agreement in 2013.
But he noted that the controversy that surrounded the modified agreement again did not allow for its take-off until the current government acted on it on August 1 this year.
But the Chairman of the committee, Mr. Ahmed Yerima; the Chairman, Sub-committee on Steel, Mr. Gabriel Kolawole, and other lawmakers disagreed with the minister.
For instance, Yerima queried why the BPE was not fully involved in the process.
Some members wondered how the same government that spent over $10bn on Ajaokuta Steel was in a hurry to return to the GIHL just to avoid paying $525m damages.
The BPE, through its acting Director-General, Mr. Vincent Akpotaire, said it had not been fully involved in the privatisation of NIOMCO and Ajaokuta since 2004.
Akpotaire recalled that there was only one meeting where the BPE made proposals to the government, but stressed that the agency was not accorded further invitations.
“The way forward is perhaps to unbundle the various plant lines in Ajaokuta, which can all stand independently on their own as against going for a single core investor again,” he stated.
Akpotaire also said records indicated that NIOMCO and Delta Steel did not find their feet after the first privatisation in 2004 because the GIHL “clearly lacked the capacity” to deliver.
Workers of the steel firms and members of the host communities opposed the latest agreement on account of unresolved issues; one of which was the non-payment of outstanding benefits.
Others were calls for the payment of compensation for lives lost in the host communities during the various protests staged by their youths to oppose the privatisation policy.
The committee said it would have to report its findings to the general House.
Adoption, Utilisation Of ICT Pivotal To Nigeria’s Socio-economic Development – Danbatta
The Information and Communication Technology (ICT) sector is no doubt, one of the fastest-growing sectors of the country’s GDP and is emerging as its most important long-term growth prospect.
The adoption and utilisation of digital revolutions by the government is creating multiplier effects across critical sectors, aiding job creation, better governance, youth empowerment and overall socio-economic development.
Investors King recalls that the sum of N160.59bn was budgeted for the ministry for the year 2022. This is more than the combined N129.59bn allocated to the ministry from 2016 to 2021.
Indeed, for over 10 years, ICT has consistently contributed more than 10 per cent of the Nigeria’s Gross Domestic Product (GDP) – the telecom sector alone contributed 12.45 per cent to GDP as at the fourth quarter of 2020.
In the second quarter of 2021, the ICT sector contributed 17.92 per cent to the real GDP of the nation.
According to the Executive Vice Chairman (EVC) of the Nigerian Communications Commission (NCC), Prof. Umar Garba Danbatta, in all continents of the world, people, organisations and countries have continued to witness leaps and bounds in economic, social and political activities through the instrumentality of ICT, which has meshed computing, information and communication technology to catalyse development in ways and manners humans never envisaged decades ago.
Danbatta who delivered a paper titled “Empowering the Nigerian Youth though Information and Communication Technology”at the 10th and 11th combined Convocation Lecture of the Fountain University at Osogbo, Osun State recalled the impact of ICT revolution in all parts of human endeavour across countries and continents, insisting that technology will continue to penetrate and foster qualitative and quantifiable changes in all aspects of life.
According to him, Uber, the world’s largest taxi company, owns no vehicle; Airbnb, the world’s largest accommodation provider, owns no real estate; Facebook, world’s most popular public-facing digitally-mediated social networking platform, creates little or no content; Alibaba, a leading global retailer, has little or no inventory, yet they have become signposts of prosperity riding wholly on ICT resources.
These foregoing contextual demonstrations of the possibilities of ICT explain the Federal Government’s policy decisions to strengthen ICT adoption in building a robust digital economy in Nigeria, eloquently expressed in the National Digital Economy Policy and Strategy (NDEPS), 2020-2030; the Nigerian National Broadband Plan (NNBP), 2020-2025 and other series of policies, guidelines and regulations derivative of the NDEPS and NNBP.
ICT, Agric, Others To Drive Economic Growth In Nigeria In 2022 – Bismarck Rewane
Chief Executive Officer, Financial Derivatives, Bismarck Rewane has listed ICT, Financial Services, Transport, Construction, Manufacturing, Trade and Agriculture as sectors that are expected to drive economic growth in 2022.
Disclosing this during the Nigerian-British Chamber of Commerce January Breakfast Meeting themed ‘2022 Economic Outlook’, Rewane noted that this projection is based on the success and high level of productivity in these key sectors.
He further noted that economic activity in 2022 will be similar to 2021, owing to global inflationary trends linked to COVID-19.
He however projected that the country’s inflation rate was expected to remain structurally high with a full-year average of 13.3 percent. According to him, the development would be driven by cost-push factors such as fuel subsidy removal, electricity tariff and taxation.
He further stressed that Nigerians will be richer in 2022 as the country’s Gross Domestic Product (GDP) rate would be revised upwards to 2.8 percent from its current 2.1 percent based on improvements in the services and manufacturing sector.
“We can expect to see sustained cost-push factors, including a planned fuel subsidy removal, new electricity tariffs and additional taxes; alongside legacy issues, such as increased debt service burden and exchange rate conversion. Inflation will remain structurally high at an average of 13.3 percent, with an increase in Q1 and Q2”, he noted.
While also noting that there has been a 90 percent surge in electronic payment, e-commerce, digitalisation and technology, Rewane projected that competition between traditional banks and Fintechs will intensify, while banks with constant innovation and regional diversification will remain resilient.
Recall that Investors king had previously reported that Stanbic IBTC Holdings Plc announced plans to seek regulatory approval for the establishment of a Fintech subsidiary. The new financial services unit which will be called Stanbic IBTC Financial Services Limited will operate as a Payment Solution Service Provider (PSSP) upon regulatory approvals, including licensing by the Central Bank of Nigeria.
This development from Stanbic IBTC came a few days after Standard Chartered Bank announced it was shutting down 50 percent of its Nigerian branches in a move to digitalise operations and reduce operating costs.
The Nigerian-British Chamber of Commerce is the foremost bilateral Chamber in Nigeria and was established in 1977 to promote Trade and Investment between Nigeria and Britain.
Oil Price Hike, Service Sector to Grow Nigeria’s Economy by 2.5% in 2022 – Report
In its latest Global Economic Prospects report, the World Bank has predicted that Nigeria’s economy will grow at a 2.5 percent rate in 2022 and 2.8 percent in 2023, largely due to the expected increase in oil prices and the country’s growing services sector in 2022 and beyond.
The projection was after oil prices rose over tightening supplies and rising global demand for the commodity. It should be recalled that Investors King reported that Libya’s crude oil production dropped from 1.3 million barrels per day (bpd) to 729,000 bpd, while oil production in Kazakhstan, another oil producer with an output of 1.6 million bpd, has drastically reduced as the nation faces unrest and natural disaster.
The new growth projection for Africa’s largest economy was slightly higher than the 2.4 percent previously predicted for the country in 2021.
“In Nigeria, growth is projected to strengthen somewhat to 2.5 per cent in 2022 and 2.8 per cent in 2023. The oil sector should benefit from higher oil prices, a gradual easing of the Organisation of the Petroleum Exporting Countries production cuts, and domestic regulatory reforms. Activity in service sectors is expected to firm as well, particularly in telecommunications and financial services,” the Washington-based institution states.
The World Bank however had pointed out that the recovery from pandemic-induced income, employment losses, and inflation of food prices would be slow. It predicted that other factors such as insecurity, social unrest, emerging COVID-19 threats such as the Omicron variant will restrain the non-oil economy of Nigeria.
“Activity in the non-oil economy will remain curbed by high levels of violence and social unrest, as well as the threat of fresh COVID-19 flare-ups with remaining mobility restrictions being lifted guardedly because of low vaccination rates — just about 2 per cent of the population, had been fully vaccinated by the end of 2021,” the report stated.
“After barely increasing last year, per capita incomes are projected to recover only at a subdued pace, rising 1.1 per cent a year in 2022-23, leaving them almost 2 per cent below 2019 levels.
“In South Africa and Nigeria, per capita incomes are projected to remain more than 3 per cent below pre-pandemic levels in 2023,” the World Bank added, after projecting that the global growth is expected to decelerate from 5.5 per cent in 2021 to 4.1 per cent in 2022, then 3.2 per cent in 2023.
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