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FG Laments Poor R&D Expenditure, Floats $50m Research Fund

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The federal government through the Nigerian Content Development Monitoring Board (NCDMB), yesterday floated a $50 million Nigerian Content Research and Development Fund (NCRDF) to boost innovation in the country.

The government noted that the 0.2 per cent currently devoted to Research and Development (R&D) in the was very negligible, noting that developed nations such as the United States, China, Japan, Germany, and South Korea spend between 2.5 to 4 per cent of their annual Gross Domestic Production (GDP) on research.

It also noted that even developing nations such as India, Malaysia and Brazil spend between 0.7 per cent and 1.2 per cent, whereas Nigeria continues to lag well behind by deploying only about 0.2 per cent of its GDP.

Speaking at the second NCDMB Research and Development Fair and Conference in Yenagoa, Bayelsa state, the Minister of State, Petroleum Resources, Chief Timipre Sylva, explained that underfunding of R&D was reflecting on Nigeria’s overdependence on foreign goods and services.

The event also witnessed the formal launch of the NCDMB 10-year R&D roadmap, anchored on eight success pillars, namely: funding, infrastructure, capability, commercial framework, co-llaboration, governance, legal framework and enforcement.

Represented by the Permanent Secretary at the ministry, Dr. Nasir Gwarzo, Sylva argued that the situation remained unsustainable if the country was serious about building a national technological capability that will drive economic growth.

“To put certain realities into context, there is a need to do a comparative analysis. Currently, developed nations such as the USA, China, Japan, Germany, and South Korea spend between 2.5 to 4 per cent of their annual Gross Domestic Production (GDP) on R&D, while developing nations like India, Malaysia, Brazil spend between 0.7 per cent to 1.2 per cent. Nigeria lags well behind by spending only about 0.2 per cent of its GDP on Research & Development,” he stated.

Sylva added that it was important to clear the misconception that funding of research was the sole responsibility of national governments, arguing that rather, big spenders on research and development globally come from the private sector.

“In 2019, private sector practitioners in the ICT hardware and electronic equipment sector, pharmaceutical & biotechnology sector, automobiles and components sector cumulatively spent $528bn on R&D, representing 22 per cent of the $2.3 trillion global R&D spend. In India, the private sector contributed 38.1 per cent of the country’s R&D spend.

“Still on funding and in line with our commitment to provide leadership, I am pleased to officially announce the creation of the Nigerian Content Research and Development Fund with an initial seed capital of $50 million,” he announced.

He explained that the fund was designed for application in the establishment of research centres of excellence, funding support for research commercialisation, funding support for basic and applied research as well as the endowment of professorial chair.

The minister noted that though clearly insufficient, it signified the premium the present administration places on growing the nation’s research and development capabilities. He encouraged the private sector to replicate the global practice by complementing the NCRDF and actively support the government’s drive in upscaling its national research architecture

According to him, with the Petroleum Industry Act (PIA), a governance framework for the industry with clear delineation of roles between regulation and profit-centric business units has now been established.

Members of the newly-constituted NCRDC included Dr. John Erinne, Mr. Ijuwe Albert ,Mr. Rosario Osobase , Dr. Noel Biodun Saliu, Alhaji Aliyu Adamu and Dr. Tandama Abu and will be headed by the Executive Secretary, NCDMB, Mr Simbi Wabote.

Sylva also commissioned the NCDMB Technology Incubation and Innovation Centre, which will provide the platform for idea generation, incubation and acceleration of innovative ideas to the marketplace.

Wabote in his comments, stressed that an analysis of global practices of R&D revealed that the combined spend of just five countries makes up 63.5 or cent of the entire global spend and also account for over 50 per cent of the global GDP.

“Africa, on the other hand, accounted for less than one per cent of the global R&D spend while its GDP is only 3 per cent of the global GDP. You will agree with me that there is a nexus between the spend on research and development and economic prosperity,” he argued.

He stressed that the authors of the Nigerian Oil and Gas Industry Content Development Act (NOGICD) of 2010 recognised the importance of research and development and included key provisions in the Act.

He stated that the board commenced the implementation of the 10-year strategic roadmap in 2018, which seeks to increase the level of Nigerian content in the oil and gas industry to 70 per cent by the year 2027.

The ES described R&D as the core of the industrial revolutions the world has witnessed over the ages, saying that it was important that countries deploy means of nurturing home-grown solutions as a means of wealth creation and growth.

In his contribution, the Group Managing Director, Nigerian National Petroleum Corporation (NNPC), Mallam Mele Kyari, disclosed that the corporation was happy to incorporate R&D into its processes, adding that as a technology-based industry, the NNPC had revved up research efforts to make it suitable for the future.

The Director, Department of Petroleum Resources (DPR), Mr. Sarki Auwalu, in his comments, noted that the oil and gas industry must begin to see the world with new eyes which also presents an array of opportunities for learning and knowledge sharing.

He added that it was critical for the global oil and gas industry to remain efficient and innovative in responding to the emergence of cheaper renewables to sustain the relevance of hydrocarbon resources to the global energy mix.

“Therefore, research and collaboration from all stakeholders is crucial to remain competitive and to meet safe, clean and sustainable energy demands of the future,” he said.

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.

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Remittances To Africa Projected to Drop By 5.4% in 2021: UNECA

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According to a new report from United Nations Economic Commission for Africa (UNECA), remittances to Africa are projected to drop by 5.4 percent to $41 billion in 2021 from $44 billion last year.

The report notes that the bleak situation has been compounded by the high cost of sending money to Africa from abroad, as the cost of remittances to Africa remains the highest in the world at 8.9 percent.

Remittances are an essential part of economic activity in low and middle-income countries (LMIC), including Africa. Due to the economic crisis induced by the COVID-19 pandemic and shutdown, global remittances are projected to decline sharply by about 20 percent in 2020. For Africa, remittances are projected to drop by 5.4 percent to $41 billion in 2021 from $44 billion last year, according to a new report by the United Nations Economic Commission for Africa (UNECA) projects remittances.

The report, titled “African regional review of the implementation of the Global Compact for Safe, Orderly and Regular Migration”, notes that the projected fall is mainly due to a fall in the wages and employment of migrant workers, who tend to be more vulnerable to loss of employment and wages amid the pandemic.

The report adds that the bleak situation has been compounded by the high cost of sending money to Africa from abroad as the cost of remittances to Africa remains the highest in the world at 8.9 percent.

“A migrant sending $200 to his/her family in Africa pays an estimated nine percent of the value of the transaction, indicating that the continent is still far from achieving the three percent target set out in Sustainable Development Goal 10,” the report stated.

This signals huge deficits in millions of African households depending on their friends and relatives abroad for a financial lifeline, thus threatening a perpetuation of macroeconomic imbalances on the continent.

The Addis Ababa Action Agenda of the Third International Conference on Financing for Development and Sustainable Development Goal indicator 10(c) provides that countries should, by 2030, reduce to less than three percent the transaction costs of migrant remittances and eliminate remittance corridors with costs higher than five percent.

In response, some African countries have taken action to lower the costs of remittance transfers by offering diaspora bonds to investors and relaxing foreign exchange controls to allow for electronic and mobile money transfers at reduced costs.

“It should be noted, in that regard, that the use of digital money transfer platforms reduces transfer fees in Africa by an average of 7 percent,” says the report.

“Private financial institutions also offer incentives to encourage members of diaspora communities to use their services, including low transaction fees for remittances, and facilitate diaspora-initiated projects, especially in the real estate sector. These measures all promote the financial inclusion of migrants and their families.”

The report recommends that member States support migrants and their families through adopting laws and regulations to facilitate the sending and receiving of remittances, including by fostering competition among banks and other remittance handling agencies to establish low-cost transfer mechanisms.

In addition, the report recommends that African countries make every effort to reduce the transfer costs associated with remittance payments by making more extensive use of digital transfer solutions, such as MPESA, and by streamlining the regulatory constraints associated with international money transfers.

Finally, the report concludes that the African States should also engage with destination countries to identify ways to enhance the provision of basic services to migrants in those countries as remittances are a primary source of national income for at least 25 African countries, all of which have large diaspora populations.

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Nigeria’s Inflation Rate Declines to 17.01 Percent in August 2021

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Prices moderated further in Africa’s largest economy, Nigeria, in the month of August despite rising costs and growing economic uncertainties.

Consumer Price Index (CPI), which measures inflation rate, grew by 17.01 percent year-on-year in August 2021, representing a 0.37 percent decrease when compared to the 17.38 percent recorded in the month of July 2021.

On a monthly basis, inflation rate increased by 1.02 percent in August 2021, slightly higher by 0.09 percent than the 0.93 percent filed in July, the National Buruea of Statistics (NBS) stated in its latest report.

Prices of goods and services continued to drop on paper in recent months even as costs are hitting record highs across most sectors in Nigeria.

Naira has plunged to a record-low against the United States Dollar and other global currencies following the Central Bank of Nigeria’s decision to halt sale of forex to Bureau De Change Operators in an effort to curb illicit financial flows and forex supplies to the black market.

Naira plunged to N560 per United States Dollar at the black on Wednesday to set a new record low against the greenback and subsequently dragged on cost of import goods and profit of import dependent businesses.

Food Index also rose at a slower pace in August 2021 even with Nigerians complaining of over 50 percent increase in the price of food items. Food composite index rose by 20.30 percent in August, at a slower pace when compared to 21.03 percent recorded in the month of July 2021.

The rise in food index were caused by increases in prices of Bread and cereals, Milk, cheese and egg, Oils and fats, Potatoes, yam and other tuber, Food product n.e.c, Meat and Coffee, tea and cocoa, according to the NBS report.

On a monthly basis, the food sub-index grew by 1.06 percent in August 2021, representing an increase of 0.20 percent from 0.86 percent filed in the month of July 2021.

Looking at a more stable food index guage, the twelve-month period ending August 2021 over the previous twelve-month average, food index increased by 0.34 percent from 20.16 percent achieved in July 2021 to 20.50 percent in August 2021.

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Glo to Reconstruct 64km Ota-Idiroko Road Using Tax Credit Scheme – Fashola

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Tax Credit - Investors King

Mobile telecommunications giant, Globacom, has offered to reconstruct the 64 km Ota-Idiroko road in 2022, using Federal Government’s Tax Credit Scheme.

The Minister of Works and Housing, Mr. Babatunde Fashola, announced this on Wednesday during an inspection tour of the ongoing reconstruction of the Lagos-Ibadan Expressway.

“From Ota to Idiroko, we don’t have a contract there, but Chief Mike Adenuga of Globacom has offered to construct that road using the tax credit system.

“So, that has also started, they are doing the design, and hopefully, by sometime early next year, they should mobilize to site. The real reconstruction is going to happen if we have a deal with Glo,” Fashola said.

He said that FERMA would carry out rehabilitation works on the Ota-Idiroko road between October and December.

“But between now and December, FERMA has gone to take measurements there and they will move there from the end of September if the Ogun State Government does two things.

“Clear all the squatters, traders, and the settlers on the road and help us manage traffic and the governor as at last night has committed to doing that for us,” the minister said.

He said efforts were on to bring in Flour Mills of Nigeria Plc and Unilever to reconstruct the Badagry link to the Lagos-Ota-Abeokuta road under the Tax Credit Scheme of the Federal Government.

The minister said that the Lagos-Ota-Abeokuta road had become a problematic road due to years of neglect by previous administrations, as such the highway required a huge investment.

He commended Gov. Dapo Abiodun for his passion for fixing roads in Ogun State, adding that the reconstruction of the failed portions of the Lagos-Ota-Abeokuta road would be completed by December at the cost of N13. 4 billion.

The minister added that the project would be handled by the Federal Road Maintenance Agency (FERMA).

He called on federal lawmakers representing Lagos and Ogun States to ensure increased budgetary allocation for the roads to ensure their speedy completion to ease the hardship on road users.

“When people say Fashola is looking away, I am not looking away, I just can’t find the money,” he said.

He also called for support of citizens for parliamentarians to ensure more borrowing for infrastructure upgrades because the future depends on development strides today.

Also speaking during the inspection tour, Gov. Dapo Abiodun of Ogun said that the project became necessary because Ogun is the industrial hub of the nation that needed good roads for interconnectivity to boost commerce.

He said: “We have given the commitment that we will relocate traders, we will control and manage traffic, whatever that it is we need to do, we will ensure that we begin to bring succor and needed relief to our people.

“The state of that road today is pitiable. I went on that road myself and I felt bad for our citizens.”

Abiodun said the state government was ready to borrow to reconstruct the Lagos-Ota-Abeokuta Road should there be a delay in the Sukuk funding for the highway.

“If this Sukuk bond would not happen immediately, the state government is willing to go and borrow against that promise so that we can mobilize the contractor,” he said.

He thanked Fashola for the efforts to reconstruct roads in the state and pledged the support of the state government in fixing the highways.

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