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FG Provides Update on Ease of Doing Business Index Effort

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  • FG Provides Update on Ease of Doing Business Index Effort

In response to the World Bank’s Ease of Doing Business Index which rates Nigeria 169 out of 190 countries surveyed, the federal government through Presidential Enabling Business Environment Council (PEBEC) has provided updates on its effort to move the country 20 places up the standings before the end of the year.

Nigeria was adjudged one of the most unfriendly countries for businesses by the World Bank after scoring low on business enabling indicators such as trading across borders, payment of taxes, getting electricity, resolving insolvency, registration of property, getting credit and starting a business. Nigeria was 94th on the index in 2006.

Speaking at the March edition of the business dialogue organised by the Nigerian-American Chamber of Commerce in Lagos with the theme “Improving the ease of Doing Business in Nigeria”, Coordinator PEBEC and Senior Special Assistant to the President on Industry Trade and Investment, Dr. Jumoke Oduwole said the council has already swung into action and is being backed by the political will of President Muhammadu Buhari.

According to her, the council early this year gave the secretariat a task of coming up “with things that could be done within a short time to make an impact on our ranking at least 20 spaces this year. On 21st February, the council approved a 60-day national action plan.”

On what has been done so far, she said, “on starting of business, we promised reduction of registration time from ten to two days, which has been one. We are working with the states on reduction of time cost for registration of property. On electricity, the part that concern getting connected to the grid, the minister has given directives to the DISCOs to reduce the number of steps from nine to five.

On getting credit, we are working with the legislators to pass two critical bills within the next 30 days on the collateral pedigree and credit bureau to make sure that SMEs can have better credit access. On taxing, there has been lot of e-filling reforms and engagement. FIRS was on a tour of office training on all the steps that can be taken on the software and took feedback on usability issues from accounting firms that use the software.

Oduwole stated that among other measures, the president has issued a directive to reduce the amount of documents required for clearing goods at the ports.

“On importation, we found that Nigeria has about four forms unlike other countries and two other forms. The President has issued a directive that it should be reduced. Also, the new consolidated immigration form contains 15 questions, which is global standard for everybody departing. Nigerians don’t need to fill anything while coming in unless they have something to declare to the Customs.

We are working and supporting FAN and the Federal Ministry of Aviation to solve issues such as budget constraints, equipment, single window project for the sea port and airport: port community communication. All these works are ongoing. On starting a business, CAC and FIRS have integrated their portals so business registration is now easy. Please do notice the little changes. It will take time, but bear with us. We are working to make this climate conducive for business.” she said.

On his part, President of the Nigerian stock Exchange Mr. Aigboje Aig-Imoukhuede challenged the government to work on attitudinal change of agents delivering public services to ensure quality delivery.

The former Access Bank boss said the bank attained growth by committing itself to quality service delivery, hence Nigerian government must to see itself as a company that delivers services to customers and as such train its agency personnel in order to gain the trust of Nigerians.

“I don’t think we can change our ease of doing business rankings without changing the attitudes of those who lead our service delivery. For instance, until the Customs man says ‘beyond catching smugglers, I would cry with every importer whose goods are unduly delayed in our ports,’ we are not providing services. We are currently trapped in this constraint of our political and social dynamics where those who govern don’t understand that their job is to serve. It is that attitude that must change. Otherwise, it would be one step forward and Customs or Immigration taking twenty steps backward,” he stated.

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

Gold

Gold Advances to Three-Month High on Virus Woes, Inflation

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Gold - Investors King

Gold rose to the highest in more than three months as concerns over the pace of a global recovery crept back in following a flareup in coronavirus cases in parts of Asia.

The pandemic is wiping out “entire families” in villages in India, where more people are saying the scale of the crisis is much bigger than official numbers reveal. The World Economic Forum is canceling the annual meeting it was planning to hold this August in Singapore, while cases in Thailand have surged.

Investors will turn to the minutes from the Federal Reserve’s April meeting due Wednesday for potential clues to officials’ views on the recovery and how they define “transitory” when it comes to inflation. Fed Vice Chair Richard Clarida said Monday that the weaker-than-expected U.S. jobs report for April showed the economy had not yet reached the threshold to warrant scaling back the central bank’s massive bond purchases. Meanwhile, Fed Bank of Dallas President Robert Kaplan said supply and demand imbalances and base effects will contribute to elevated inflation this year, but he expects price pressures to ease in 2022.

Gold’s rebound puts it close to erasing this year’s declines, with recent inflows into bullion-backed exchange-traded funds signaling a boost to investor sentiment. Expectations for further increases in consumer prices could start to bolster demand for gold as a hedge.

“It seems inflation fears are finally translating into higher precious metals prices,” said John Feeney, business development manager at Sydney-based bullion dealer Guardian Gold Australia. “ETF investors are starting to swing into net-buyers again, after the recent consolidation, and it makes sense for the metals to play catch up to the recent moves higher in other commodities. We also have a lot of uncertainty with Covid-19 strains and mutations in the Asia-Pacific region that would be leading to safe haven buying.”

Spot gold rose as much as 0.4% to $1,873.82 an ounce, the highest since Jan. 29, and was at $1,868.01 by 12:16 p.m. in Singapore. Silver and palladium gained, while platinum steadied. The Bloomberg Dollar Spot Index fell 0.1%.

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Energy

Hamburg’s German African Energy Forum to jumpstart Africa’s Economic Transformation

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green energy - Investors King

The African energy sector continues to solidify partnerships with German investors and technology with the aim of leading energy businesses from Germany, Europe and across the African continent. From upstream to downstream, Africa’s energy sector must accelerate its transition to net-zero, continue to adopt new technologies and start to embrace digitization and decentralization over the next decade.

The 14th German African Energy Forum in Hamburg hosted by Afrika Verein continues this dialogue and pushes for investment with a clear focus on highlighting the entire African energy mix, together with economic cooperation between Germany and Africa.

As stated by Afrika-Verein, “the economic impacts of the COVID-19 pandemic, climate change and the ongoing digital transformation of economies need a green, smart and quick response from the energy sector. Power generation is still one of the main enablers for inclusive economic growth in Africa.” With this said, the African Energy Chamber strongly endorses and supports the 14th German African Energy Forum in Hamburg in its efforts to do so.

In the same manner, there is a strong need for German and African businesses and policymakers to support policies that create an enabling environment for investment in a fair and evolving industry. Germany’s march to net-zero transition can’t be met if Africa is behind. The African energy sector’s ability to support the rapidly increasing demands for electricity, the deployment of smart infrastructure to manage energy more effectively, gas monetization, combating energy poverty and the approach we take to financing Africa’s clean energy transitions in a post Covid era makes this forum more important than ever.

The 14th German African Energy Forum is set to provide key market insights, trends and opportunities over the next decade as the energy sector prepares to support a global green economy.

“Year after year, Afrika Verein has been consistent in keeping Africa at the center of German foreign policy and energy policy. Their ability to bring together key stakeholders from Africa and Germany to work on energy matters including Germany and Africa is inspiring” stated NJ Ayuk, Executive Chairman of the African Energy Chamber.

“We are going to need a real net-zero transition that takes into consideration policy, regulation, innovation, technology and investment in Africa. A disorderly transition creates a stronger impulse for job losses, geographic inequity and a deterioration in inequality. In return, economic disenfranchisement can reduce public support for environmental policies over time Germans and Africans need to work together to avoid it.” Concluded Ayuk.

The Africa Energy Chamber believes Hamburg will be a great place for energy investors, project developers, policy makers and innovators to share insights and expertise on key transition trends and opportunities in Africa.

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Crude Oil

NNPC Closes Direct Sale and Direct Purchase Deals With 26 Firms

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NNPC Nigeria

The Nigerian National Petroleum Corporation (NNPC) has picked 26 foreign and local companies as well as 12 countries to lift the country’s crude oil for the next two years.

The crude term contracts, expected to run from 2021 through 2023, would see the firms and the selected nations, which would operate on a Government-to-Government (G2G) basis to purchase the commodity from the national oil company.

The deal is coming less than a week after the corporation chose 16 oil and gas consortia for its new crude-for-fuel swap contracts for one year starting in August.

The contracts, known as Direct Sale, Direct Purchase (DSDP) are high-stakes agreements used to supply nearly all of Nigeria’s petrol needs as well as cover some of its diesel and jet fuel consumption.

However, in the fresh crude oil term agreements, it was observed that the names of majority of the companies involved in the DSDP deal also appeared in the list of those picked by the national oil company for the crude term contracts.

The list sighted by the media showed that the preferred companies included Sahara Energy Resources Limited, Oando, Duke oil (an NNPC subsidiary), Petrogas, AA Rano, MRS, Mercuria and Vitol.

Other oil and gas concerns which scaled the NNPC selection hurdle were Oceanbed Trading Limited, Levene Energy, Bono Energy , Mocoh Energy, BP Oil, West Africa Gas Limited, Litasco SA, Emadeb, Hyde, Matrix and Brittania-U.

Other names listed by the NNPC as having qualified for the contracts included Masters, AMG, Casiva, Barbedos, Trafigura, Hindustan and Patermina.

NNPC has its own equity share of crude oil from its Joint Ventures (JVs), usually shared on a 60 to 40 basis and thereafter appoints companies and issues licences to lift its share of the oil on a Free on Board (FOB) basis.

The companies and countries nominate ships that transport the crude which is sold in the international market. Sometimes, the NNPC also awards contracts to governments to carry out the business.

In the document approving the qualified countries, China, Niger, Cote D’voire, Ghana, India, Togo, South Africa came tops, while Sierra Leone, Liberia, Turkey, Senegal, and Fujaira also made the cut.

Typically, entities qualified to take part in the contract bid are divided into four categories, namely a bonafide end user who owns a refinery and or retail outlets that can process Nigerian crude oil grades.

For the government to government contracts, or what is termed “bilateral relationships”, with what the corporation terms “high energy consuming nations”, bidding nations must provide proof that the entity is wholly owned by the relevant country or provide evidence of a bilateral agreement with the designated nation.

The third category is the internationally established and globally recognised large volume crude oil traders, while the fourth classification are indigenous companies engaged in Nigeria oil and gas downstream business activities.

In addition, qualifying foreign companies must demonstrate a minimum annual turnover of $500 million or the naira equivalent and a net worth of not less than $250 million or the naira equivalent for the previous financial year.

For indigenous firms, they are required to have a minimum turnover of $200 million or the naira equivalent and a net worth of $100 million for the preceding financial year ending.

Bidders are also to show their ability to handle supplies of crude and must list facilities and products processed or sold over the last three years, in addition to disclosing links to NNPC or the Bureau of Public Procurement (BPE) and confirming that directors have not been convicted of fraud or financial impropriety.

As with all Nigerian tenders, NNPC also highlights that the local content law must be strictly adhered to in terms of, among others, the use of Nigerian shipping companies, insurance and banks where possible.

In the past, Civil Society Organisations (CSOs) in the country’s oil and gas space had argued that G2G contracts with smaller, non-refining countries have high governance risks and low policy benefits for Nigeria.

For instance the Nigeria Natural Resource Charter (NNRC) has asked that term contracts should be carried out through a transparent and competitive tender process that includes robust pre-qualification standards and an end of sales to smaller non-refining countries unless NNPC can publicly explain the deals’ policy benefits.

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