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Electricity: Manufacturers Adopt Survival Means



  • Electricity: Manufacturers Adopt Survival Means

Manufacturers under the auspices of the Manufacturers Association of Nigeria (MAN) have taken their destinies in their hands by providing electricity for their operations. Electricity supply dearth is a common knowledge as the national supply has being adjudged the second poorest in the world second only to Yemen, a war torn country, by Spectatorindex twitter handle.

In an interview, MAN President, Dr Frank Udemba Jacobs, lamented that for over three decades manufacturers have consistently argued on the need to give the sector special consideration in energy supply without commensurate response from the government.

He regretted that after advocating improvement in electricity supply to industries for over three decades without respite, his association had no choice but take their destinies in their hands.

He reiterated MAN’s effort at complementing the government attempt at resolving the huge challenge. He said: “Nigeria has a huge population of over 180 million people based on World Bank figure; huge and thriving manufacturing and other businesses, but delivers about 4000 megawatts (MW) of electricity per day.

“By the rule of thumb, the quantum of electricity generated in the economy should be at least, 180,000MW per day; that is an average of one megawatt per 1000 persons. Moreover, the World Bank report also indicates that Nigeria’s electricity per capita was 142 kilowatts as at 2013, which is well below the world per capita energy of 3,104.382 kilowatts in the same year. Apart from the dearth of electricity supply to the industries, the quality and constant arbitrary increase in the tariff are also major challenges.”

Jacobs lamented that electricity supply challenges have become hydra-headed to his association and operations.

On the way forward, he said his association has resorted to self-generated energy, notwithstanding the huge cost associated with such endeavour. He revealed that in 2016 alone, manufacturers expended over N129.0 billion on alternative energy source, noting that the electricity challenge has been one of the major factors responsible for the poor competitiveness of Nigerian manufactured products as it accounts for over 36 per cent of total cost of production in the sector.

He, however, commended the Federal Government’s progressive effort at improving electricity supply in the country beginning with the privatisation of the power sector. The government, he said, has also shown commitment to helping the companies in the electricity production chain and solve their huge challenges.

He lauded the Central Bank of Nigeria’s (CBN) N213 billion Nigerian Electricity Market Stabilisation Facility (NEMSF) support for electricity companies in addressing their challenges. He, however, regretted that despite the support from the government, power supply remains inadequate for domestic and industrial needs.

According to him, in the light of the various challenges in the electricity sector, MAN he said, is also making significant efforts at addressing the energy challenges of its members.

On how far the association has gone in achieving sufficiency in electricity. He said: “ The Manufacturers Power Development Company Limited (MPDCL) was incorporated by MAN to drive improvement of electricity supply to members of the association, especially within the industrial clusters.

“The MPDCL within the last quarter of 2017, has signed Memoranda of Understanding (MoU) with some Independent Power Producers (IPP) and the projects are already at different implementation stages. The Association is also encouraging its members to key into energy efficiency production system.”

Spectra Industries Limited Chief Executive Officer (CEO), Mr. Duro Kuteyi, also urged the Federal Government on the need to have special electricity rate for manufacturers. He criticised a situation where manufacturers are charged high electricity rates, which he said have the capacity to erode their profits and affect their bottom line.

Responding to the invitation of the Minister of Power, Works and Housing, Mr. Babatunde Fashola’s invitation to manufacturers to take -up the available 2,000 mega watts excess electricity, he questioned the minister on the modalities and how manufacturers can access it, noting that it can only work where there are manufacturing clusters. He argued that the plan begs the question and will not address it.

He asked the minister to evolve a novel method of distributing electricity to where needed most so that manufacturers can spend less on electricity supply in their productions.

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.


Nigerian Brand, JR Farms Acquires 11% Stake in Rwandan Firm




Nigerian Brand, JR Farms Acquires 11% Stake in Rwandan Firm

JR Firms, an agribusiness firm with headquarters in Nigeria, has announced partnership with Sanit Wing Rwanda through the acquisition of 11 per cent stake in the company.

The CEO of the company, Mr Rotimi Olawale, explained in a statement that the partnership was in furtherance of its goals to ensure food security, create decent jobs and raise the next generation of agrarian leaders in Africa.

The stake was acquired through Green Agribusiness Fund, an initiative of JR Farms designed to invest in youth-led agribusinesses across Africa.

Sanit Wing Rwanda is an agro-processing company that processes avocado oil and cosmetics that are natural, quality, affordable, reliable and viable.

The vision of the company is to become the leading producers of best quality avocado and avocado by-products in Africa by creating value across the avocado value chain.

With focus on bringing together over 20,000 professional Avocado farmers on board and planting of three million avocado trees by 2025 through contract farming, the company currently works with One Acre Fund in supply of avocado to its processing facility.

The products of the company which include avocado oil, skin care (SANTAVO), hair cream and soap are being sold locally and exported to regional market in Kenya.

With the new partnership with JR Farms- the products of the company will enjoy more access to markets focusing on Africa and the European Union by leveraging on partnerships and trade windows available.

Aside funding, the partnership comes with project support in areas of market exposure, capacity building, exposure and other thematic support to grow the business over the next four years.

JR Farms has agribusiness operations in Nigeria, Rwanda, United States and Zambia respectively.

In Nigeria, the company deals in cassava value chain processing cassava to national staple “garri” which is consumed by over 80 million Nigerians on daily basis, while in Rwanda, it works in the coffee value chain with over 4,000 coffee farmers spread across the East Central African country.

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Shut Down Depots Selling Petrol Above Approved Price – Marketers




Shut Down Depots Selling Petrol Above Approved Price – Marketers

The Federal Government should close down depots that are selling petrol above the approved price, oil marketers said on Thursday.

National President, Independent Petroleum Marketers Association of Nigeria, Sanusi Fari, said the sale of petrol above government approved price by depot owners would soon lead to a hike in the commodity’s pump price.

Fari told journalists in Abuja that the government through its agencies such as the Department of State Services and the Department of Petroleum Resources should curb the development to avoid crisis in the downstream oil sector.

He said some private depot owners were selling at N165 per litre to independent marketers, way above the government stipulated price of N148 per litre.

Fari said, “Our challenge is the inconsistency in the pricing of petrol. Up till a week ago, government was still insisting that the February price for petrol remained unchanged.

“And most of the private depot owners are selling above the government stipulated price. As at today ( February 25, 2021) private depot owners are selling at N165 per litre to independent marketers.”

He added, “In the last six years, only NNPC imports refined products into this country and these tank farms buy their products from NNPC under a controlled price.

“This has affected our businesses seriously because government is insisting that we sell at the rate of N165, which is not going to work.”

The IPMAN president said filling station owners buy the product at N165 per litre from the private depots and incur other expenses such as transportation, rent, etc.

“So government cannot expect us to sell less than what we buy,” he said.

Fari added, “This is why we are calling on government and agencies that are saddled with the responsibility to control petrol pricing to urgently clamp down on depots that are selling above the stipulated price.”

The Nigerian National Petroleum Corporation, the country’s sole importer of patrol, recently stated that it never hiked the cost of petrol to depots.

It also enjoined the depot owners to sell the product at the approved rate and called on the DPR to enforce the stipulated price across the depots.

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Nigeria Will Benefit Less From African Trade Deal – NESG



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Nigeria Will Benefit Less From African Trade Deal – NESG

Nigeria and other resource-based countries will benefit less from the African Continental Free Trade Area than economies that are more diversified, the Nigerian Economic Summit Group has said.

The NESG, a private sector-led think-tank, said in its 2021 Macroeconomic Outlook that Nigeria could reap more gains through export diversification away from crude oil.

It said trade in Africa remained dominated by raw materials and less processed products, adding that on average, minerals and agriculture accounted for 44 per cent and 16 per cent of intra-African trade respectively between 2007 and 2017.

The NESG said, “Evidence has shown that African economies that are more diversified and have improved transport infrastructure, would benefit more from the trade pact than others that are resource-based and agricultural dependent.

“Putting this in context, South Africa currently accounts for 40 per cent of intra-African manufacturing imports. On the other hand, resource-based countries, such as, Algeria, Egypt and Nigeria – which collectively account for approximately 50 per cent of Africa’s GDP – contribute only 11 per cent to intra-African trade.”

“Another bone of contention is the issue of ‘rules of origin’, which constitutes a significant risk factor. This implies that protectionism practices by some countries could constitute a setback for the establishment of the ambitious single market for Africa. But there are several reasons to be optimistic,” it added.

The group said the World Bank estimates revealed that the AfCFTA would promote manufacturing exports over natural resources, agricultural and services exports, and that manufacturing exports would account for one-third of the projected total exports of $2.5tn by 2035.

It said, “Nigeria could reap more gains through export diversification away from crude oil, as manufacturing exports currently account for an average of nine per cent of the country’s total exports.

“This suggests that efforts should be directed at strengthening domestic value chains, particularly the agro-allied industrial base.

“To achieve this, there is a need to attract private capital, most especially, FDI, that would allow for knowledge and technological transfers.”

According to the NESG, for Nigeria to maximally benefit from the trade deal, there is an urgent need to also address transport infrastructure bottlenecks and provide improved logistics.

It said, “Finding a lasting solution to the Apapa gridlock by creating similar ports in other regions of the country, so as to ensure speedy clearance of consignments needs to be prioritised.

“Nigeria also needs to set standards for locally-made goods to enhance their attractiveness in the regional market.

“The Nigerian government as a matter of urgency needs to operate an efficient and corruption-free land border system, so as to guide against the importation of low-cost sub-standard products into the country.

“It is only when these and many more reforms are implemented that Nigeria can begin to reap the benefits of the trade deal.”

The group noted that owing to the outbreak of COVID-19, the implementation of the AfCFTA was postponed from July 1, 2020 to January 1, 2021.

It said, “The key goal of the free trade pact is to expand the volume of intra-African trade, which stood at 16 per cent in 2018 .“Till date, 36 countries, including Nigeria, have ratified the agreement. The trade deal is expected to create a single market with a combined GDP of $2.5tn and total population or market size of 1.2 billion.”

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