- Oil, Gas Logistics Suffers Low Investment
The growth of the nation’s oil and gas logistics industry is being hampered by low investment, which is largely due to lack of a level playing field among operators, our correspondent has learnt.
According to the Managing Director, Lagos Deep Offshore Logistics base, Dr. Amy Jadesimi, the industry across West Africa is worth over $200bn.
She said, “It is a massive industry. We have to remember that most countries in West Africa are discovering oil. But Nigeria still has higher oil and gas reserves than any other country in the region. So, if you are looking at the country that is going to spend the most for logistics, it is Nigeria.
“If you are looking at the country, therefore, that has the most to gain by being the hub and by domesticating all of its logistics-related activities in the country, it is also Nigeria. And finally, if you are looking at the country that cannot afford to continue to squeeze the market — keep the market small; that cannot afford to have foreign-controlled monopoly dominating the market and pushing indigenous players to one side, then that is also Nigeria.”
She stressed the need to lower the costs of operations and increase competition in the market.
“We can find significant cost savings if people patronise new facilities in Lagos and in other places. We have to encourage long-term private sector Nigerian investment so that we can make Nigeria an attractive investment destination. LADOL is making Nigeria an attractive investment destination, and that is very important at a time like this when people are choosing destinations in the world or in Africa to invest in,” Jadesimi said.
She said LADOL, which had been investing for 15 years and operational for 10 years, had yet to break even because “we keep investing”.
According to her, around $500m has been invested in the LADOL free zone so far.
The LADOL MD said since the passing of the Local Content Act in 2010, there had been an estimated $2bn to $4bn of investments by Nigerians building new capacity.
She, however, said, “We need a lot more; and we probably need at least $10bn of investments in the next few years. For the first time, we are seeing Nigerians being able to participate and add value to this important sector.
“We need to collaborate as Nigerians because we have a mountain to climb. We are focused right now on collaboration for LADOL to really be successful; to achieve our mission of making Nigeria the West Africa’s hub, there needs to be more LADOLs across Nigeria.
“We have to build more capacity so that when a client has a project and wants to build 50,000 tonnes, we have enough capacity within Nigeria to do that. What we need the government to do is to enforce the laws that we already have which guarantee a level playing field for investors.”
The Managing Director, Nigerian Ports Authority, Hadiza Usman, had recently promised to discourage monopoly and promote transparency in the logistics industry.
“We appreciate the need for local content development and we will push for its success in Nigeria. We will ensure enabling environment and the necessary legislation to block any form of monopoly in the logistics subsector,” she said.
Egypt Leads Nigeria, South Africa in Foreign Direct Investment
The United Nations Trade Association has Nigeria recorded a total of $2.6 billion in Foreign Direct Investment (FDI) in 2020, below the $3.3 billion posted in the preceeding year.
South Africa, Africa’s most industrialised nation, reported $2.5 billion during the same year, slightly below Africa’s largest economy and 50 percent below the $4.6 billion attracted a year earlier.
The report also noted that Africa recorded a total of $38 billion FDI in the same year, representing a 18 percent decline from the $46 billion posted in the corresponding year of 2019.
However, Egypt led Nigeria and South Africa with $5.5 billion FDI, an increase of 38 percent from the preceeding year.
The report read in part, “FDI flows to Africa declined by 18% to an estimated $38 billion, from $46 billion in 2019. Greenfield project announcements, an indication of future FDI trends, fell 63% to $28 billion, from $77 billion in 2019. The pandemic’s negative impact on FDI was amplified by low prices of and low demand for commodities.”
UNCTAD also noted that global foreign direct investment declined by 42 percent to an estimated $859 billion, down from $1.5 trillion in 2019.
“The decline was concentrated in developed countries, where FDI flows fell by 69 percent to an estimated $229 billion. Flows to Europe dried up completely to -4 billion (including large negative flows in several countries). A sharp decrease was also recorded in the United States (-49%) to $134 billion.”
FG to Partly Fund Six Rail Projects Connecting All Regions
The Federal Government will pay a total sum of N71 billion to partly fund six rail projects connecting all regions of the country.
In the report obtained from the Federal Ministry of Finance, Budget and National Planning, the six rail projects marked for development this year are Lagos-Kano rail line (ongoing), Calabar-Lagos (ongoing), and Ajaokuta-Itakpe-Aladja (Warri).
Others are the Port Harcourt-Maiduguri railway, the new Kano-Katsina-Jibiya-Maradi line in Niger Republic and the Abuja-Itakpe and Aladja-Warri Port and refinery/Warri new harbour.
The Buhari administration will also spend N15.1 billion on the development of safety and security of critical projects, airport certification, runway construction, terminal building, among others in the aviation sector in 2021.
Last week, Rotimi Amaechi, Minister of Transportation, said the Lagos-Kano line would be connected from the Ibadan end of the Lagos-Ibadan railway and would cost $5.3 billion.
“We are waiting for the Chinese government and bank to approve the $5.3bn to construct the Ibadan-Kano. What was approved a year ago was the contract,” the minister said.
He added, “The moment I announced that the Federal Government had awarded a contract of $5.3bn to CCECC (China Civil Engineering and Construction Corporation) to construct Ibadan-Kano, people assumed the money had come in; no.
“We have not got the money, which is a year after we applied for the loan. We have almost finished the one of Lagos-Ibadan. If we don’t get the loan now, we can’t commence.”
FG Launches E-ticketing Platform to Deepen Train Usage and Convenience
In a bid to improve the usage and enhance the convenience of train transport in Nigeria, the Federal Government on Thursday announced the launching of the Electronic Ticketing platform for the Kaduna-Abuja rail services.
The N900 million E-ticketing platform was introduced by the Minister of Transportation, Chibuike R. Amaechi, and the Nigerian Railway Corporation.
Amaechi said the new platform would improve efficiency, promote accountability, reduce leakage and enhance economic growth, as well as save time.
The E-ticketing platform was a Public-Private Partnership project done in conjunction with Secure ID Solutions, who provide and would manage the system for 10 years in an effort to recoup its investment before the Nigerian Railway Corporation take charge.
Kofo Akinkugbe, the Chief Executive Officer, Secure ID Solutions, said as the new E-platform issued 25,000 tickets after a successful pilot test on Thursday.
Potential Travelers can book via three ways:
1. Mobile app
3. POS or Cash at the station
A validator would be used to scan the ticket barcode to ascertain its authenticity before boarding.
Amaechi further announced that self-service ticket vending machines at various train stations would be introduced soon.
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