- Nigeria Loses N3.46tn Annually to Port Inefficiency – Survey
The Nigerian economy is losing an estimated annual revenue of N3.46tn as a result of the current crises of poor infrastructure, poor policy implementation and corruption at the ports, according to the result of a recent survey carried out by the members of the Organised Private Sector and the Centre for International Private Enterprise.
A breakdown of the losses show that N600bn is lost in Customs revenue, $10bn in non-oil exports and about N2.5tn in corporate earnings across the various sectors of the economy.
The report noted that due to the persistent traffic gridlock in the Apapa area, industrial capacity utilisation currently stood at 38 to 40 per cent, while 40 per cent of businesses located around the port communities had either relocated to other areas, scaled down operations or completely shut down.
According to the report, about 5,000 trucks seek access to Lagos ports on a daily basis along an access road designed to take only about 1,500 trucks daily.
Also, about 60 tank farms are located around the ports, most of which were located without recourse to the original design of the ports, traffic consideration or the volatility of the products in the tanks, it added.
This result in trucks spending more than one week sometimes to access the ports from Lagos mainland due to traffic gridlock, the report added.
“These developments have very huge adverse implications for job creation, tax revenue and real economic activities, with estimated downside effect of about three per cent on the country’s Gross Domestic Product,” the President, Lagos Chamber of Commerce and Industry, Mr Babatunde Ruwase, noted during the unveiling of the report in Lagos on Tuesday.
He pointed out that the 2017 positioning of Nigeria as number 183 out of 185 countries in terms of trading across borders (a major indicator for measuring a country’s ports effectiveness) on the World Bank Ease of Doing Business ranking did not reflect efforts of the present administration on repositioning the ports through series of interventions targeted at improving port efficiency.
“Operators and users of Nigerian ports are increasingly faced with bureaucratic red tape, limited access to the ports due to traffic congestion, constant delays, illegal charges, technical and security breakdown, leading to high cost of operations and competitiveness,” he added.
The LCCI president noted a worrisome level of deliberate resistance by some Ministries, Departments and Agencies of government to implement enabling regulations, including the 2017 Presidential Executive Orders relating to the ports.
He said the report also noted that fights for supremacy, conflicts of interest and revenue ambitions that conflicted with trade facilitation objectives were common issues among the MDAs.
“The report underscored the fact that only 10 per cent of cargoes are cleared within the set timeline of 48 hours, while majority of the cargoes take between five to 14 days, and some take as long as 20 days; deliberate delays induced by MDA officials currently account for approximately 65 per cent and 80 per cent of import clearance and export processing time, respectively,” he said.
The LCCI sought swift intervention in terms of policy reforms, including the single window platform, the enforcement of the Executive Order, reduction in the number of MDAs and security formations at the ports, passing of enabling reforms by the National Assembly and upgrade of rail infrastructure, truck parks and pipeline for movement of wet cargoes, among others.
Dangote Fertiliser Plant to Commence Shipment of Urea in March 2021
Dangote to Sells Petrol in Naira, Plans to Commence Urea Shipment in March 2021
The Governor of the Central Bank of Nigeria, Mr. Godwin Emefiele, has said Dangote Fertiliser Plant will commence shipment of Urea in March 2021.
The CBN governor disclosed this during an inspection tour of the sites of Dangote Refinery, Petrochemicals Complex Fertiliser Plant and Subsea Gas Pipeline at Ibeju Lekki, Lagos on Saturday.
Emefiele further stated that Dangote Refinery would sell refined petroleum products in Naira when it starts production.
This he said would save the country from spending 41 percent of the nation’s foreign exchange on importation of petroleum products yearly.
“Based on agreement and discussions with the Nigerian National Petroleum Corporation and the oil companies, the Dangote Refinery can buy its crude in naira, refine it, and produce it for Nigerians’ use in naira,” Mr Emefiele said.
“That is the element where foreign exchange is saved for the country becomes very clear. We are also very optimistic that by refining this product here in Nigeria, all those costs associated with either demurrage from import, costs associated with freight will be totally eliminated.”
Emefiele explained that this will make the price of Nigeria’s petroleum products affordable and cheaper in naira.
“If we are lucky that what the refinery produces is more than we need locally you will see Nigerian businessmen buying small vessels to take them to our West African neighbours to sell to them in naira.
“This will increase our volume in naira and help to push it into the Economic Community of West African States as a currency,” Mr Emefiele said.
UK Budget 2021: Will Sunak’s Budget Run Into Unintended Consequences?
Rishi Sunak’s Budget will encourage higher earners to consider their “international financial options” and will drive businesses away from the UK, warns the CEO of one of the world’s largest independent financial advisory and fintech organizations.
The warning from Nigel Green, chief executive and founder of deVere Group, comes as the Chancellor delivered his 2021 Budget in the House of Commons, his second since he took on the role.
Mr Green says: “The Chancellor has got an extraordinarily difficult hand to play as he tries to stem the economic damage caused by the pandemic, support jobs and businesses and, crucially, rebuild the public finances.
“Whilst Mr Sunak is being hailed a hero for the continued and unprecedented levels of support, it should also be remembered that he is – in a stealth move – dragging more people firmly into the tax net.
“He is raising taxes under the radar.
“Yes, there is no income tax rise. However, he is freezing personal tax thresholds, meaning as incomes rise and thresholds don’t, he is able to raise money by fiscal drag.”
Earlier this week, the deVere CEO noted: “Those most impacted by this stealth move will be looking at the financial planning options available to them, including international options, in order to grow and protect their wealth.”
Rishi Sunak also confirmed that corporation tax will increase to 25% from 2023, up from the current level of 19%.
Of this tax hike, Mr Green goes on to say: “Lower corporation tax helps job and wealth-creating business to survive and thrive. It also helps attract business to move and invest in the country.
“Instead of increasing taxes, Mr Sunak should have relentlessly focussed on growth and stimulus policies for businesses. This would have been of greater help to firms, the economy, jobs and, ultimately, the Treasury’s coffers.”
He adds: “Again, this corporation tax hike is likely to serve as a prompt for businesses to consider their overseas financial options.”
The deVere CEO concludes: “The Chancellor had to perform a tough juggling act. But stealthily dragging more people into the tax net and raising corporation tax might have negative, unintended consequences for the Treasury’s bottom line.”
Electricity Consumers Get 611,231 Meters Under MAP Scheme
Electricity Consumers Get 611,231 Meters Under MAP Scheme
A total of 611,231 meters have been deployed as at January 31, 2021 under the Meter Asset Provider initiative since its full operation despite the COVID-19 pandemic and other extraneous factors, the Nigerian Electricity Regulatory Commission has said.
NERC disclosed this in a consultation paper on the review of the MAP Regulations.
The proposed review of the MAP scheme is coming nearly four months after the Federal Government launched a new initiative called National Mass Metering Programme aimed at distributing six million meters to consumers free of charge.
“The existence of a huge metering gap and the need to ensure successful implementation of the MYTO 2020 Service-Based Tariff resulted in the approval of the NMMP, a policy of the Federal Government anchored on the provision of long-term low interest financing to the Discos,” NERC said.
The commission had in March 2018 approved the MAP Regulations with the aim of fast-tracking the closure of the metering gap in the sector through the engagement of third-party investors (called meter asset providers) for the financing, procurement, supply, installation and maintenance of meters.
It set a target of providing meters to all customers within three years, and directed the Discos and the approved MAPs to commence the rollout of meters not later than May 1, 2019.
But in February 2020, NERC said several constraints, including changes in fiscal policy and the limited availability of long-term funding, had led to limited success in meter rollout.
NERC, in the consultation paper, highlighted three proposed options for metering implementation going forward.
The first option is to allow the implementation of both the NMMP and MAP metering frameworks to run concurrently; the second is to continue with the current MAP framework with meters procured under the NMMP supplied only through MAPs (by being off-takers from the local manufacturers/assemblers).
The third option is to wind down the MAP framework and allow the Discos to procure meters directly from local manufacturers/assemblers (or as procured by the World Bank), and enter into new contracts for the installation and maintenance of such meters.
“Customers who choose not to wait to receive meters based on the deployment schedule of the NMMP shall continue to have the option of making upfront payments for meters which will be installed within a maximum period of 10 working days,” NERC said.
The regulator said such customers would be refunded by the Discos through energy credits, adding that there would be no option for meter acquisition through the payment of a monthly meter service charge.
“Where meters have already been deployed under the meter service charge option, Discos shall make one-off repayment to affected customers and associated MAPs. Such meters shall be recognised in the rate base of the Discos,” it added.
NERC urged stakeholders to provide comments, objections, and representations on the proposed amendments within 21 days of the publication of the consultation paper.
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