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3,000 Electrical/Electronics Workers Lose Jobs in Seven Months



  • 3,000 Electrical/Electronics Workers Lose Jobs in Seven Months

Local manufacturers of electrical and electronics items, including cables, meters, light bulbs, fittings and accessories, have laid off more than 3,000 workers between March and September this year.

This is as they continue to grapple with low capacity utilisation arising from high cost of funds, competition from cheap and substandard imports and general non-conducive operational business environment.

Investigations by our correspondent revealed that in addition to the challenges, the continued inability of the manufacturers to access foreign exchange for the purchase of essential raw materials and machinery for production in the past 21 months has taken a heavy toll on the sector, leading to more factory closures and job losses.

For instance, a leader in the cable manufacturing industry, Coleman Wires, has laid off more than 50 per cent of its workforce within the period.

The Managing Director, Coleman Wires, Mr. George Onofowokan, told our correspondent, “I am the Chairman of the Electrical/Electronics Group of the Manufacturers Association of Nigeria and to say there have been over 3,000 job losses in that sector between March and now is putting it mildly.

“In our own firm, we have laid off more than 50 per cent of our staff members. The market is not moving up; inventory level and production are contracting. We invested N2.5bn in a factory last year; that factory today is not functioning at up to five per cent capacity because of lack of raw materials. Although we are still servicing the loan we took to set up the factory.

“What makes the situation in the cable industry more critical is the fact that 80 per cent of the raw materials we need for production are imported and there are no local alternatives, because the factories producing the local alternatives are not functioning. Even if one was to get local alternatives, the funds to buy them are not forthcoming from the banks.”

A former Chairman, Infrastructure Committee, MAN, and Managing Director, Bennett Industries Limited, Mr. Reginald Odiah, said his business of manufacturing and selling light bulbs and fittings had become so challenging that he had sacked all his employees and now relied on casual workers whom he only called when he had any job to do.

The industrialist, who has been operating in the sector for over 30 years, once had a flourishing business making electrical appliances and accessories. He was at a point the Chairman of the National Electricity Regulatory Commission’s Technical Committee on Operationalisation of Micro-Grid industrial Cluster Initiatives.

But he said things had got so tough that he had to give up his factory space because he could not afford to keep it going again, adding that the space was later acquired by a church.

Like Coleman Wires, the bulk of Bennett Industries’ raw materials is imported and the company faces the challenge of access to forex, but beyond that, Odiah said he had battled high cost of funding and low patronage from Nigerians for long, which had exposed his firm to unhealthy competition from cheap imported light bulbs and fittings.

“Manufacturing locally is very challenging. If I am borrowing now, I will borrow at an interest rate of 25 per cent for 360 days. When local manufacturers produce, taking all the costs into consideration, their products are seen as expensive. Even though the quality is better than the imported ones, people will choose to patronise the imported low quality ones,” he explained.

Another local meter manufacturer and the Managing Director, Mojec International Limited, Ms. Chantel Abdul, said she had been playing a waiting game with the banks to see if she could get forex to produce meters, which would be sold to electricity distribution companies.

While waiting, the firm has had to scale down on the number of her employees, because of the lack of activity in the factory.

Abdul said, “Before now, we had issues with patronage but since the campaign for local patronage started, the Discos have been patronising us. The issue now is that we are unable to produce enough meters to sell to them because a lot of our raw materials are imported.

“Although the CBN has prioritised the local manufacturing sector in terms of forex allocations, the quantity is very low compared to how much we really need.”

She added, “In addition to this is the lack of access to a single-digit interest financing to allow us produce and sell to the Discos for future payment arrangement. That is the kind of arrangement foreign suppliers are offering them, a situation where you can supply them the meters and they pay over a period of 34 months or more; but no bank is willing to give you a facility that lasts for that length of time.

“This endless wait for forex may force our customers to turn to foreign meter suppliers.”

During a presidential policy dialogue with Vice-President Yemi Osinbajo in August, the President, MAN, Dr. Frank Jacobs, disclosed that 50 more companies had shut down between March and September due to lack of raw materials.

According to Onofowokan, more than 1,000 manufacturing firms have shut down operations nationwide during that period.

As a way out of the problem, an analyst and the Director-General of the West African Institute for Financial and Economic Management, Prof. Akpan Ekpo, suggested that since the CBN had opened a special window of intervention for the manufacturers and it did not seem to be solving their problems, the apex bank should take responsibility for disbursing the funds to the sector instead of leaving it in the hands of the commercial banks.

He said, “There are CBN offices all over the country. The manufacturers can access the special funds directly from the CBN, and the apex bank can in turn monitor to see that the money is well utilised. This is a short-term approach. In the long term, Nigeria can start looking for ways of producing these raw materials locally, or where it can import them cheaply from.

“Since what we basically have is a supply problem, the manufacturers should endeavour to export what they produce instead of just manufacturing for sale in Nigeria. If they export, they can earn the forex they need for their operations instead of relying on the government for supply.”

CEO/Founder Investors King Ltd, a foreign exchange research analyst, contributing author on New York-based Talk Markets and, with over a decade experience in the global financial markets.

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Crude Oil

Goldman Sachs Revised Down Brent Oil Forecast for Q3 2021



Brent crude oil - Investors King

Goldman Sachs Group, an American multinational investment bank and financial services company, has revised down its Brent oil price projection for the third quarter (Q3) of 2021 by $5 from $80 per barrel previously predicted to $75 a barrel following the surge in Delta variant COVID-19.

The investment bank predicted that the surge in Delta variant COVID-19 cases will weigh on Brent oil price in Q3 2021 even with the expected increase in demand.

However, the bank projected a stronger second half of 2021, saying OPEC+ adopted slower production ramp-up will offset 1 million barrel per day demand hit from Delta.

Goldman said, “Our oil balances are slightly tighter in 2H21 than previously, with an assumed two-month 1 mb/d demand hit from Delta more than offset by OPEC+ slower production ramp-up.”

The leading investment banks now projected a deficit of 1.5 million barrels per day in the third quarter, down from 1.9 million barrels per day previously predicted.

Therefore, Brent crude oil is expected to average $80 per barrel in the fourth quarter, a $5 increase from the $75 initially predicted and the bank sees 1.7 million barrels per day in the fourth quarter.

The oil market repricing to a higher equilibrium is far from over, with the bullish impulse shifting from the demand to the supply side,” the bank said.

Goldman added that even if vaccinations fail to curb hospitalisation rates, which could drive a longer slump to demand, the decline would be offset by lower OPEC+ and U.S. shale output given current prices.

Oil prices may continue to gyrate wildly in the coming weeks, given the uncertainties around Delta variant and the slow velocity of supply developments relative to the recent demand gains,” it said.

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Crude Oil

Oil Extends Gains on Thursday on Expectations of Tighter Supplies



Crude Oil - Investors King

Oil prices rose about $1.50 a barrel on Thursday, extending gains made in the previous three sessions on expectations of tighter supplies through 2021 as economies recover from the coronavirus crisis.

Brent crude settled at $73.79 a barrel, up $1.56, or 2.2%, while U.S. West Texas Intermediate (WTI) settled at $71.91 a barrel, rising $1.61, or 2.3%.

“The death of demand was greatly exaggerated,” said Phil Flynn, senior analyst at Price Futures Group in Chicago. “Demand is not going away, so we’re back looking at a very tight market.”

Members of the Organization of the Petroleum Exporting Countries and other producers including Russia, collectively known as OPEC+, agreed this week on a deal to boost oil supply by 400,000 barrels per day from August to December to cool prices and meet growing demand.

But as demand was still set to outstrip supply in the second half of the year, Morgan Stanley forecast that global benchmark Brent will trade in the mid to high-$70s per barrel for the remainder of 2021.

“In the end, the global GDP (gross domestic product) recovery will likely remain on track, inventory data continues to be encouraging, our balances show tightness in H2 and we expect OPEC to remain cohesive,” it said.

Russia may start the process of banning gasoline exports next week if fuel prices on domestic exchanges stay at current levels, Energy Minister Nikolai Shulginov said, further signalling tighter oil supplies ahead.

Crude inventories in the United States, the world’s top oil consumer, rose unexpectedly by 2.1 million barrels last week to 439.7 million barrels, up for the first time since May, U.S. Energy Information Administration data showed.

Inventories at the Cushing, Oklahoma crude storage hub and delivery point for WTI, however, has plunged for six continuous weeks, and hit their lowest since January 2020 last week.

“Supplies fell further by 1.3 million barrels to the lowest level since early last year, theoretically offering support to the WTI curve,” said Jim Ritterbusch of Ritterbusch and Associates.

Gasoline and diesel demand, according to EIA figures, also jumped last week.

Barclays analysts also expected a faster-than-expected draw in global oil inventories to pre-pandemic levels, prompting the bank to raise its 2021 oil price forecast by $3 to $5 to average $69 a barrel.

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RES4Africa, Enel Green Power and the European Investment Bank Encourage African Youth to Find Green Energy Solutions to Community Challenges



European Investment Bank - Investors King

The second Micro-Grid Academy Young Talent of the Year Award today acknowledged energy innovation from across Africa that can accelerate the green transition and improve economic opportunities.

Backed by the RES4Africa Foundation, Enel Green Power and the European Investment Bank the yearly competition encourages young energy entrepreneurs from across the continent to develop projects that expand enegy access, enable greater use of renewable eneryg and accelerate sustainability.

Young finalists from across West, East and Southern Africa presented their innovative ideas to expert judges from the RES4Africa Foundation, Enel Green Power and the European Investment Bank.

The 2021 edition of the Micro-Grid Academy Young Talent of the Year Award has arrived to its final steps. Today, the eight young African innovators selected as finalists out of nearly 50 applicants presented to the international public their disruptive projects for the first time. The presentation took place during the event Public Competition for the MGA Young Talent of the Year 2021 finalists, and represents a preparatory step for the announcement of the three winners, that will be held the 28th of September in the framework of the Precop26.

The three entities strongly believe that renewables and innovation will be the response to the climate changes and energy deficit that Africa faces. In this deeply needed path towards its just energy transition, the continent can and must rely on one of its most precious resources : its youth. With this joint initiative, RES4Africa, Enel Green Power and the European Investment Bank put together their efforts to support those young people from all Africa countries who are committed and motivate to create a real change in their communities.

These are the finalists identified by the selection committee, who publicly presented their project ideas and among which there are the three future winners:

• Adekoyejo Ifeoluwapo Kuye, 26 years old from Nigeria, introduced a project focused on a sustainable cold chain for food;

• Alex Makalliwa, 31 from Kenya, presented his initiative of electrical tricycles for heavy loads in Nairobi;

• Benson Kibiti, 34 also from Kenya, performed an overview on an PV-powered trolley for heating up food and providing power;

• Lucas Filipe Tamele Junior, 24 from Mozambique, focused on waste management, biofertilizers and biogas;

• Matjaka Ketsi from Lesotho is 28, and presented an initiative aiming at building solar-powered Learning Centres for rural communities;

• Shedrack Charles Mkwepu is instead 26 and comes from Tanzania: he designed a system that allows farmers to control irrigation and other soil parametres from a mobile phone;

• Carol Ofafa, 32 from Kenya, proposed the installation of a PV system for health facilities;

• Kumbuso Joshua Nyoni, 34 from Zambia, envision an integrated Water-Food-Energy model for PV power and a water pumping system.

The webinar benefitted from the presence of Salvatore Bernabei, President of RES4Africa and Head of Enel Global Power Generation, as well as of Maria Shaw Barragan, Director of Lending in Africa, Caribbean, Pacific, Asia and Latin America, European Investment Bank. They introduced the objectives of the MGA Young Talent of the Year Award, while reflecting upon youth’s impact on the just energy transition.

Moreover, after the finalists’ presentation, a final feedback was provided, with closing remarks, by Roberto Vigotti, Secretary General at RES4Africa Foundation, Carmelo Cocuzza, Head of Corporates Unit, European Investment Bank, and Silvia Piana, Head of Regulatory Affairs Africa, Asia and Australia Area at Enel Green Power.

“The ability to generate innovation will be a fundamental driver to pave the way for a transformation that goes well beyond the dynamic of the Energy sector” commented Salvatore Bernabei “We are here give voice and visibility to young talents, innovators, entrepreneurs promoting the best innovative ideas to stimulate socio-economic progress from within and free the creativity of the younger generations in designing the Africa of tomorrow”.

Increasing energy access and enabling more sustainable energy use is crucial to unlock opportunities for communities across Africa. The finalists in this year’s Micro-Grid Academy Young Talent Awards all demonstrate inspirational and innovative thinking that combined world-class energy expertise with unparalleled understanding of local energy needs and all deserve to win. The European Investment Bank is pleased to join RES4Africa and Enel Green Power to support talented young innovators and encourage them to become green energy leaders of the future.” said Maria Shaw-Barragan, European Investment Bank Director for Global Partners.

RES4Africa Foundation (Renewable Energy Solutions for Africa) envisions the sustainable transformation of Africa’s electricity systems to ensure reliable and affordable electricity access for all, enabling the continent to achieve its full, resilient, inclusive and sustainable development. The Foundation’s mission is to create favourable conditions for scaling up investments in clean energy technologies to accelerate the continent’s just energy transition and transformation.

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