Oil prices, which have been rising for three straight weeks on Wednesday, touched two-and-a-half year highs of $67 per barrel boosted by an explosion on a crude pipeline in Libya and voluntary OPEC-led supply cuts.
According to weekly data from Baker Hughes Inc. Dr Diran Fawibe, chairman and chief executive officer of International Energy Services Limited, the rising price of crude oil was as a result of the strategy of the Organisation of Petroleum Exporting Countries (OPEC) not to cut output so as not to lose market share to non-OPEC members
With the Nigerian economy being almost 100 per cent dependent on oil revenue, this development, should be cherry news, after the price fell below $30 in 2015. But recent Nigerian history, shows that whatever oil prices is rising, there is seeming inability of the government to sustain a stable price for the petroleum products for domestic consumption; unfortunately, this is playing out again with this rebound of oil prices in the international market.
This has been attributed to the land price of refined petroleum products rising in pari-pasu with the rising oil prices.
Experts say that the only way out of the quagmire is total deregulation of the downstream sector and the country developing its domestic refining capacity.
Nigeria’s FOUR REFINERIES NOT WORKING
The current petrol scarcity, the nation’s worst in years, has marred the 2017 Christmas celebrations and has lasted weeks has again raised the key question about why Africa’s largest oil producer continues to import petrol, and why its four refineries in Port Harcourt, Warri and Kaduna don’t work.
On assuming power in May 2015, President Muhammadu Buhari pledged to revive Nigeria’s minimally performing refineries to optimum capacity, in what appeared a recap of same promise as contained in the manifestoes of the then opposition All Progressives Congress, APC, during the 2015 electioneering period.
In September 2015, the NNPC in its report said Nigeria’s refineries worked at a combined capacity utilisation of a measly 1.96 per cent.
The report stated further that the combined value of output by the refineries amounted to N9.9 billion for crude processed in September 2016, adding that the associated crude plus freight cost stood at N6.3 billion.
This, the report said, represented a loss of N8.8 billion after an overhead cost of N12.4 billion.
In December 2016, the NNPC promised that the three refineries will work at “full blast” by 2017.
Ndu Ughamadu, the corporation’s spokesperson, said in a statement that NNPC would embark on a comprehensive rehabilitation of the refineries to achieve optimal capacity utilisation.
“The plan for next year (2017) is to get the comprehensive rehabilitation programme done,” Mr. Nghamadu quoted Anibor Kragha, NNPC’S Chief Operating Officer, Refineries, as saying. Kragha added that the corporation would also draw up a chart for routine Turn Around Maintenance (TAM) of the refineries.
But in September 2017, nine months after the announcement, NNPC’s Group Managing Director, Maikanti Baru, again announced the government’s plan to shut down the refineries for overhaul.
Baru said the government planned to embark on comprehensive rehabilitation of the refineries in order to bring them to their nameplate production capacities.
He also announced that eight committees had been inaugurated to monitor the exercise, with the mandate to conduct day-to-day check on the work streams.
Sunday Telegraph reports that with successive administrations failing to address the issue of fixing Nation’s oil refineries, the Dangote’s 650,000 barrels per day capacity refinery in Lagos, which is slated to come on stream in 2019; is the sure bet the country has for overcoming this reoccurring problem.
This came as a former Minister of Interior and Chairman of Integrated Oil and Gas, owners of a major oil tank farm in Ibafo, Apapa Lagos, Capt. Emmanuel Iheanacho (rtd) has attributed the persistent scarcity of premium motor spirit (PMS) also known as petrol; to the monopoly of the product by the Nigerian National Petroleum Corporation (NNPC).
Capt Iheanacho, who stated this in Lagos on Tuesday, said that the inability of NNPC to create a window for private importers to import petrol also contributed to the scarcity.
According to him, the current shortage in fuel importation gap was caused by the landing cost margin of N171 per litre and the selling cost pegged at N 145 per litre.
Iheanacho said that this was not realistic for marketers to import and sell at that rate.
“The selling of the product at N145 per litre is no longer feasible with the current exchange rate.
“Shortage of foreign exchange and increase in crude prices has made it unprofitable to import petrol and sell same at N145 per litre.
“The problem is that importation of petrol is being handled, almost 100 per cent, by NNPC, while private importers backed out because the increase in crude price has made the landing cost high,’’ he said.
Iheanacho said that the marketers’ huge debts of over N800 billion had also contributed to their inability to import petrol. He said that most independent marketers had closed their companies due to inability to pay their workers.
He urged the Federal Government to settle all the outstanding debts owed marketers since 2015. According to him, commercial banks have started taken over the property and tank farms of some companies that could not pay back their loans.
The Minister of State for Petroleum, Dr Ibe Kachikwu, admitted before the before the scarcity snowballed to normal national problem, that there was shortfall in supply.
It is against this backdrop that a former Minister of Education and co-convener of BringBackOur Girls Campaign, Dr Oby Ezekwesili, in a series of tweets on her verified Twitter handle, said total deregulation of the oil sector was the way to ensure a permanent solution to the crisis.
“Dear President .@MBuhari of @AsoRock It is not Rocket Science to FIX the Distortion in the Oil Sector. It is the underlying cause of the annual #FuelScarcity.
“It’s time to LET GO of the “politically beloved petroleum sector”. Sir, the SOLUTION is FULL DEREGULATION. Just. Do. It!” she said.
However, opponents of full deregulation have argued that it would lead to price increase as government would no longer be able to fix the selling price of the product. In a full deregulated situation, marketers, governments and businesses could bring in petrol at their own cost and sell at any price they deem fit.
While urging the president to ensure good governance, the Bring Back Our Girls leader said ensuring full deregulation would bring about productive incentive to the nation’s oil and gas sector.
“P @MBuhari, unleashes the Productive Incentive that FULL DEREGULATION would bring to the Oil & Gas Sector of our economy immediately and severe the umbilical cord that has tied up the sector in the knots of Politics. Free that sector NOW. End the poor governance & suffering,” she added.
Ms. Ezekwesili added that “no matter the depth of complexity of any Problem in a country, there are options of Solutions that can be mobilized to resolve them. Problems persist these days not for want of ideas to solve them but only because someone is FAILING to make a TOUGH CALL on the RIGHT SOLUTION.
THE BLAME GAME
According to Ndu Ugbamadu, General Manager Public Affairs, Nigerian National Petroleum Corporation (NNPC), the NNPC Group Managing Director, Dr Maikanti Baru, had, during a meeting with the heads of Nigerian Association of Road Transport Owners (NARTO) and Petrol Tanker Drivers (PTD), last Thursday; blamed diversion of the products for the scarcity.
He had disclosed that a nation that consumed 35 million litres suddenly increased consumption to 85 million litres due diversion to neighbouring countries.
He added that the scarcity was artificial as the corporation “as at today (Thursday last week) has adequate products and a 25-day sufficiency’’.
But the Depot and Petroleum Products Marketers Association (DAPPMA) in its reaction to the claims by NNPC said that the corporation lied to Nigerians on the on-going nationwide shortage of petrol.
DAPPMA stated this in a statement issued on Monday, signed by its Executive Secretary, Mr. Olufemi Adewole, the Association rejected accusations of product hoarding levelled against DAPPMA members.
While DAPPMA explained that it can neither confirm nor dispute NNPC’s claim of having sufficient product stock, the association said it can confirm that the products are not in the tanks of its members.
According to DAPPMA, there are always hitches in product distribution any time the NNPC assumes the role of sole importer of products. DAPPMA added that 80 per cent of the country’s functional product receptive facilities are owned by its members and such do not currently holds products.
“The NNPC imports and distributes products through DAPPMA, Major Oil Marketers Association of Nigeria (MOMAN) and Independent Petroleum Marketers Association of Nigeria (IPMAN). Our members pay NNPC/PPMC (Petroleum Products Marketing Corporation) in advance for petroleum products and fully paid up PMS orders that have neither been programmed nor loaded are in excess of 500,000 metric tonnes (about 800,000 litres) as at today and enough to meet the nation’s needs at a daily estimated consumption of 35,000 litres.
“Our members’ depots are presently empty. However, if the NNPC/PPMC provides us with PMS, we are ready to do 24 hours loading/truck out to alleviate the suffering of Nigerians until the fuel queues are eliminated,” said DAPPMA. The association maintained that the NNPC has been the sole importer of the product since October for various reasons.
Among these, DAPPMA said, is the fact that the country currently runs a fixed price regime without any recourse to subsidy claims. It noted, however, that the international price of crude oil is beyond its control. DAPPMA stated that the current price of PMS is about N170 per litre, with the NNPC, importer of last resort, absorbing the attendant subsidy on behalf of the federal government.
“We understand that NNPC meets this demand largely through its DSDP platform framework. However, due to price challenges on the DSDP platform, some participants in the scheme failed to meet their supply quota of refined petroleum products, especially PMS, to NNPC. This is the main reason for this scarcity,” explained DAPPMA.
It added that the current exchange rate of naira to the dollar is N306 for PMS importation, stating that banks also charge interest at a rate above 25 per cent.
The statement came in the wake of allegations that the current crisis was instigated by the marketers. Some Nigerians including government officials accused marketers of taking advantage of controlling the bulk of the fuel distribution facilities and outlets to divert and hoard products supplied by NNPC.
But, in its reaction on Wednesday, the NNPC in a statement accused DAPPMA of insincerity, describing as “very unfortunate” the association’s claim that the crisis was as a result of its members being denied products.
“NNPC wishes to affirm that it has supplied appreciable volume to DAPPMA, Major Marketers Association of Nigeria (MOMAN) and Independent Petroleum Marketers of Nigeria (IPMAN) to rid the challenges currently being experienced in the supply and distribution of petroleum products in the country,” the NNPC said in a statement by its spokesperson, Ndu Ughamadu.
“NNPC regrets that DAPPMA, which members had taken receipts of products from Petroleum Products Marketing Company (PPMC), a subsidiary of NNPC, and owe the company to the tune of N26.7 billion as at December 21, 2017, has the audacity to indict NNPC unjustifiably,” Ughamadu said.
Ughamadu said DAPPMA’s claim that the current fuel scarcity was due to the inability of the DSDP partners of NNPC to deliver was “unfounded and self-indicting.” He said many DAPPMA members also patronise the same DSDP partners.
The NNPC said it became the sole importer and supplier of petrol to the Nigerian market because DAPPMA members were unable to meet expectations. This is despite the concession by government giving DAPPMA access to foreign exchange to import petrol at an official rate of N305 to the dollar, the spokesperson said.
On what the corporation was doing to resolve the crisis, the NNPC said in addition to the increase in the supply of petrol since the beginning of this month (December 2017), it has also programmed to supply over 1.2 billion litres of the white products in January next year.
“This will translate to about 40 million litres of PMS supply per day, against about 700 trucks (about 27million – 30million) litres per day that Nigerians ordinarily consumes,” Mr. Ughamadu said.
Despite the current challenges, he reassured Nigerians that there was no plan to increase pump price of petrol above N145 per litre.
“The NNPC will continue to maintain ex–depot price of N133.28 per litre, which guarantees the pump price not exceeding the N145 per litre capped by the government.
“All stakeholders are implored to support the efforts of government to bring a speedy end to the current fuel distribution challenges being experienced in parts of the country as this is not the time to play the blame game,” he said.
However, Sunday Telegraph reports that as at Friday, NNPC and DPPMA continued to trade tackles over accusations of indebtedness and cause of the scarcity.
The NNPC claimed the marketers owed over N26.7 billion for product supplied. But DAPPMA shot back last Thursday night, saying none of its members is indebted to the corporation.
“DAPPMA is not aware of any indebtedness to PPMC (Pipelines and Products Marketing Company)/NNPC by our members,” the group said in a statement sent to Sunday Telegraph Thursday night. “The PPMC/NNPC does not transact business with marketers on credit.
“It is indisputable that DAPPMA members have paid for petrol supply (with bank funds) for over one month, the value of which is in excess of N90 billion, yet PPMC/NNPC had no cargo to allocate to them,” Adewole insists. “As such how can we be held responsible for hoarding?”
“We again reject any attempt to blame marketers for the shortfall in supply as it is not our making since NNPC has been the sole importer since October 2017.
The organisation said marketers had always sacrificed to keep the country running, despite over N600 billion debt owed its members, and over N800 billion owed marketers as a whole.
CONTROVERSY TRAILS Return Oil SUBSIDY
But in another twist, the Ekiti State Governor, Ayodele Fayose, faulted Vice President Yemi Osinbajo, over his claim that the NNPC is the one bearing the cost of fuel subsidy and not the Federal Government.
What is the difference between NNPC and the Federal Government? Who is NNPC and who is Federal Government? Is NNPC now an autonomous agency of the Federal Government?” were Fayose’s posers in a statement signed by his media aide, Lere Olayinka on Wednesday.
The vice president had told journalists in Lagos on Monday that NNPC and not the Federal Government was paying the N26 subsidy per litre of petrol.
This followed the confirmation by the GMD of NNPC, Maikanti Baru, that the landing cost of petrol was now N171 as against the official pump price of N145 per litre, and that the federal government was paying N26 as subsidy on every litre of petrol imported to retain the pump price of N145.
Fayose said: “Fact is, NNPC does not have the right to spend money it generates from the sales of crude oil. It does not have the right to swap crude oil for subsidy”.
“Where is NNPC getting the money with which it is subsidising petrol with N26 per litre? Is NNPC spending money from the sales of crude oil that should be paid into the federation account to pay subsidy?”
“If subsidy is being paid by the NNPC as claimed by Vice President Osinbajo, where is the money coming from? Is it from sales of crude oil? Does it now mean that the NNPC is spending part of the proceeds of the sale of crude oil outside allocation to the federal government by the Federation Account Allocation Committee (FAAC)?
“We were all in this country in 2012 when chieftains of the APC, including President Buhari led protests across the country against removal of fuel subsidy.
“Before he became President, Buhari maintained that fuel subsidy never existed and when he became President, he said he did not know what fuel subsidy meant.
“We were also in Nigeria in May 2016; when the Federal Government announced the removal of subsidy on petrol and went on to increase the pump price of petrol to N145 per litre.
“The same APC people, who protested against removal of subsidy and increment of petrol price to N140 in 2012, defended the removal in 2016 and increment of pump price to N145.
“In 2017 budget of the Federal Government, provision was not made for the payment of fuel subsidy, so also that of 2018. So where is the N26 they are subsidizing one litre of petrol with coming from? Is the Buhari-led government spending fund not appropriated by the National Assembly?”
But the NNPC GMD, Maikanti Baru, said on Friday that President Muhammadu Buhari authorised the Corporation to subsidise petrol for Nigerians.
Baru, who said this during a brief interview with State House correspondents at the Presidential Villa shortly after he performed Friday Islamic prayers; was reacting to the confusion thrown up by his revelations that government is paying N26 subsidy on a liter of petrol .
“Do you want me to remove subsidy?” he said in response to questions demanding clarifications on the subsidy.
“What I am saying is that the landing cost as should be sold in the pump without under-recovery should be N171.40.
“However Mr. President has directed that we should maintain all the parameters to ensure that it is sold at N145 per litre. And that is why we are selling at depot at N133.28.8,” he explained.
CALL ON BUHARI TO RESIGN
However, the on-going fuel scarcity all over the country has sparked criticisms from Nigerians all over the nation. This is as Nigerians on social media have blasted President Muhammadu Buhari for being incompetent and inattentive to the plight of Nigerians. They called for his resignation. Some Nigerians urged Buhari, who is Minister of Petroleum, to take responsibility and stop blaming others by finding a quick solution to the fuel crisis, adding that there should be no scarcity after removal of subsidy. Here are some comments: @aligthebaptist “Buhari is the most incompetent President we have ever elected in the history of Nigeria. You can’t hide incompetence; just drive around the country and you’ll see the level of hopelessness this govt has brought upon the already impoverished citizens#fuelscarcity @joeydozie “At N145 per litre, this Moronic @APCNigeria led government can’t ensure that there’s no #fuelscarcity.
A rudderless, directionless joke of a government. @tenovertrn “Does Buhari still remember that he’s the petroleum minister?#fuelscarcity @matthewottah “This is the 3rd fuel scarcity under Buhari in 2 1/2 years. First one was in Sept-December 2015. For three months Nigeria suffered but PMB didn’t blink. Second one was in April/May 2016 which he cunningly increased fuel from N87 – N145 and now December 2017. Buhari and #fuelscarcity @timi “I don’t even know who to blame for this #FuelScarcity Pengassan Strike,Greedy Oil Marketers, Daura farmer?But I choose to blame buhari since we blamed Jonathan for everything @michaelkerry@mbuhari himself is the minister of petroleum. It wouldn’t be partisanship to blame #fuelscarcity on him. Or is @GEJonathan …..
He should take responsibility for the first time @igweleoWhen we have finally adjusted to the $145 per litre, now #fuelscarcityhas engulfed us. What an incompetent govt! Nigerians are sorry GEJ. @itsyomie Nigeria is so fucked Up, Christmas should be d talk of the country instead it’s petrol..
Stupid government#yomie #fuelscarcity #Christmas @misterlarrie The Government/ President’s silence is the most annoying thing about this#fuelscarcity. Thank you for teaching us a political lesson, Muhammadu Buhari, we won’t make the same mistake again. Incompetent President! @badrappar #fuelscarcity I think buhari’s ear have started paining him again.
Didn’t say anything on #endsarsand still haven’t said anything on the#fuelscarcity @fk147I like how we keep shifting D Goal Post During Gej Tenure.When there is#fuelscarcity we held him responsible that he is the President& in Charge @iykimo It’s been bleak Christmas every year since Buhari took over in May 2015.Nigerians slept in fuel stations across the country yesterday.Sai Buhari Sai suffering #FuelScarcity @timiakegbejo No statement on#EndSARSNo statement on #fuelscarcityNo Presidential media chat… Impeach yourself you fraud @MBuhari @Mahrthins “People who voted for Muhammadu Buhari shouldn’t be allowed to make life decisions. #fuelscarcity.
Port industry worse under Buhari administration –Amiwero
Lucky Amiwero is the President of the Council of Managing Directors of Nigerian Licensed Customs Agents and Managing Director of Eyis Resources Limited. In this interview with PAUL OGBUOKIRI, he says that the hype on ease of doing business in Nigeria is a ruse in the port sector. He posits that Nigeria’s ports, though large, are far from being modern and are the most expensive in the world with no access roads and riddled with decaying infrastructure
What is your assessment of the port sector of Nigerian ‘s transport system under the Muhammadu Buhari government?
Well, this is the worse we’ve ever had in the port industry. Our access roads are bad, our procedures are archaic and most of the agencies of government are not performing their core functions like the Nigerian Maritime Administration and Safety Agency (NIMASA) and Nigerian Ports Authority (NPA).
Nigerian Shippers Council (NSC) appears a bit better because of the court cases but in almost every other area of our port operation, it’s like we have gone backwards by more than 500 per cent from our former position.
NPA for instance is not established for revenue collection as its core functions. There are three components of its core responsibility: One is the port operation that was taken over by Terminal Operators. Another of its core function is commercial regulation, which is now being handled by the Nigerian Shippers Council. The last is marine operation, which is farming out to different private operators.
Our ports have been left unregulated and becoming one of the most expensive in the world that you pay as much as N20,000 per day for a container that is left lying in the port because you cannot access the facility on time with your truck due to bad roads.
Do an analysis of the cost of doing business in Nigerian ports and you will agree that it is the most expensive in the world. Trucks will spend two to three weeks to access the ports and spend about four days to exit the port after collecting your consignment. This doesn’t happen anywhere in the world.
When you exit the ports with your consignment, you begin a battle of worries over likelihood of containers falling off or accident. People are dying on the Lagos ports roads. Have you not seen or heard of containers falling off on people?
Aside the accidents, the stress level of the port user has increased under this regime and this is terrible.
Fixing the ports access roads is part of NPA’s core functions under section 32 of its enabling law. NPA should take all the blames for not fixing the roads. It is their primary function to make them accessible.
NPA and the minister should take the blame. We have five ports clustered around here and they account for about 80 per cent of the cargoes that come into Nigeria. The stakes are high for us as a country if we develop our transport infrastructure for ease of vehicular movements to and from the ports.
Over 70 per cent of our revenue from the maritime sector is derived from Lagos, but we are not giving it commensurate attention. We are not predictable, we are not consistent and we are not transparent. These are the tools for trade facilitation and if they are not there, nobody can come into your country to invest.
There is this Presidential Council on Ease of Doing Business. Has it impacted on the maritime industry?
That council knows nothing about the ports. Most of them in that council have not seen a port in their lives. You don’t just go and bring people from your church and put them in a council that should oversee sensitive economic issues.
You need experts who have been in the port system. The woman that is the head of Ease of Doing Business has never come to the port before. She knows nothing about the operations here. She doesn’t understand the system and procedures. On ease of doing business on trading across borders, Nigeria is the worst.
Trading across borders is an important component of what we are talking about.
The Minister of Transport just goes about talking about rail; he has not made any impact here. The man knows nothing about this sector and is unwilling to learn. Most of the international conventions Nigeria is a signatory to are domiciled in the Ministry of Transport.
Amaechi knows nothing about the FAAL Convention that was used in facilitating trade in our ports between 2006 and 2008 and in 1999 when we have most of the laws that was used to reorganise the ports and make several maritime related laws.
Our port looks disorganised; SON, NAFDAC and other agencies of government are all operating unregulated. No coordinating agency, no lead agency. In fact nothing is working.
Look at Benin Republic, they asked Antwerp Ports to handle their port for them that mean most of Nigeria bound cargo will be going there. We will now be moving our smaller ships to their port to pick our cargoes to our archaic ports.
Benin Republic doesn’t have cargo. They rely on our cargo. For them to ask an advance port operator to manage their ports, they will give Nigeria very serious competition using our own cargoes.
Too many agencies want to play regulatory roles in our port. In Ghana the government awarded a contract of $4.5 billion for the expansion of Tema Port. Our transit trade has been taken over by Ghana.
Cargoes that should move from here to Niger, Chad and other countries are now moving from Ghana even though Ghana is longer, it is being patronised because their processes are better and easier.
Ghana has a more efficient system. The have an electronic tracking system tracking containers on transit, you don’t need Federal Operations to escort containers with guns. This is a small country that developed their system and we have so much to learn from them.
They are taking over our cargo and developing their system deploying technology to surpass Nigeria. Smaller countries are developing their ports to take Nigerian cargoes.
What is the implication of losing our cargoes to the ports of these neighbouring countries?
Soon bigger vessels with 20,000 TEUs capacity won’t be coming to Nigeria, they will be taking Nigerian cargoes to those ports. Within the West and Central African regions we need at least two transshipment centers. Some ports in the region are acting as centers already. Coted’ Ivoire, Ghana, Benin Republic and Togo are already operating as transshipment centers.
There is going to be a siphoning of most of our cargoes through their operations. The employment advantage will be in their favour. Where a ship berths, some jobs are created. The entire freight component, benefits of shipping companies, customs agents, terminals and others goes to the country where the ship berths
Most of our policy makers are ignorant about these things and the country is paying dearly for it. As a country, we seem not to have learnt anything from our mistakes. We keep going round the same circle of complaints because everyone in government or position is concerned about self enrichment.
Benin, Togo, Ghana and Coted’Ivoire have higher draft. This is not all about politics or getting favourable stories out in the media, it’s more about what your country put in place for economic growth and business development. Most of the ships coming here are smaller ships that have berthed in other countries and gotten the cargo transshipped. We have lost the economic advantage of having the mother ship calling in our port first hand.
For Ghana to have invested $4.5 billion in port development with careful project implementation agenda, they mean business. Nigeria has never done that. We either deploy funds that are not used well or we devise slogans to create impression that things are working.
Nigeria is not investing in the right directions. Our port concession has remained faulty from the foundation. No one has been able to look into what infrastructure the Concessionaires have built or real value they have added to what they met on the ground.
Ghana has dropped terminal handling and terminal delivery charges, our transport minister here is doing nothing. We have the market, we have the ports, we consume higher cargoes but we don’t have the infrastructure in place to accommodate large ships.
We have lost over two million jobs through a failing port system; Chad, Mali and Burkina faso are no more looking up to Nigeria for their cargoes because they are getting the service more efficiently from somewhere else.
We are in a very fierce economic battle with our neighbours in terms of ports development and maritime activities.
What are your views about emerging ports being planned by some state governments? Edo is talking about Gelegele Port, Akaw Ibom is talking about Ibaka Deep Seaport while Cross Rivers talks about Bakassi Deep Seaport and many more?
All these ports cannot work. I call them ‘political ports.’ Some people just want to pour money into them, abandon them and go away. Nigeria doesn’t need multiple transshipment centers now.
One of the core components of transshipment port is destination of cargoes. Do you have enough cargoes in Ondo, Edo Bayelsa, Akwa Ibom and Cross Rivers that all of them are talking about having deep seaports?
Ships you see coming to Lagos is because Lagos has potentials to consume cargoes, it has factories that need raw materials and many more including it’s population. Ships will not just move to any place just because you are constructing an emerging port there. Those things may just end up as abandoned projects.We have largely idle ports in Sapele, Onitsha, Burutu, Calabar, Warri. Ask yourself, how many ships are going there? Now some governors want to spend scarce resources to build more ports. Weeds and rats have overtaken some of these ports and you want to sink money into building new ones. It doesn’t make sense.
Lagos has what it takes to attract cargoes. Most of these states owing workers should not go into constructing political ports because they will amount to waste.
For instance, you cannot divert Lagos cargo to Calabar because you may not have the infrastructure to move it from Calabar to other parts of the country. These governors should look for something better to do with their funds and time. They should not go into expensive port construction projects that may end up being abandoned midway or being idle after completion.
Kaduna Dry Port, do you see the milestone as a major step forward in port infrastructural development?
The project remains an uncompleted one. They should finish it. As things stand, there is no law establishing the Kaduna Dry Port. So you need the National Assembly to do that with proper legal framework.
If the president or minister designates that facility as a Dry Port, what are they relying on to do so, is it NPA Act or Shippers Council law?
Our port related laws talks about navigation. It is centered on the marine sector. No provision has been made for Dry Ports in our laws. Part of our problem is that we don’t follow due process. That Kaduna facility can only be operated as a Customs Port or Bonded Terminal.
Stakeholders: Auto policy, not executive order will boost industry
President Muhammadu Buhari penultimate week signed an Executive Order aimed at boosting domestic production of goods and creating jobs in science, technology and engineering in the country, but PAUL OGBUOKIRI reports that auto manufacturers will not be able to take advantage of the ‘legislation’ unless the Federal Government summons the courage to implement its auto policy
President Buhari, has frequently spoken about ending Nigeria’s dependence on oil exports while also creating jobs by boosting local food production.
Months after he came to power in May 2015, the Central Bank of Nigeria (CBN) restricted access to foreign currency to import certain goods in a bid to stimulate local manufacturing.
To further give a stronger effect to promote production and consumption of made-in-Nigeria goods, the president recently signed the Executive Order to boost domestic production of goods and service.
“I have repeatedly emphasised my vision for a Nigeria that produces what it consumes. To attain that vision, it is vital that local companies get preference in planning, designing and executing Sci, Tech & Eng. projects,” Buhari said on his official Twitter feed two weeks ago.
But speaking on the order, auto manufacturers in Nigeria under the aegis of Nigerian Automotive Manufacturers Association (NAMA) who were encouraged to invest in the sector by the country’s auto policy of 2013, are saying their investments are suffering, even as the second hand auto market is being tacitly promoted and allowed to flourish by the Federal Government.
“The Federal Government seems to be more focused on short term goal of earning more revenue from Customs Duty paid by second hand vehicle importers, than the implications of its action on industrialisation, economic activities, employment and vision 20:20:20”.
In a statement issued recently in Lagos, NAMA, which is an association of all vehicle companies, like the older PAN Nigeria Limited and ANAMMCO, as well new comers like Innoson in Nnewi, Coscharis Ford etc; argued that the negative impact of the policy shift on the economy will outweigh the short term benefits.
The statement said: “The Federal Government seems to be more focused on short term goal of earning more revenue than the implications of its action on industrialisation, economic activities, employment and vision 20:20:20”. It, therefore, called for stricter control of the inflow of the vehicles.
According to them, the age limit of 10 to 15 years would only add to the common scenario where our highways and roads are littered with broken down motor vehicles with their attendant impact on human lives and the environment.
The association called for a full implement of the 70 per cent tariff on imported second hand vehicles
“Compared with all other developing countries with vehicle assembly plants, our import duty on fully built up vehicles is the lowest. These countries charge import duties of between 30 per cent – 100 per cent and even impose other charges”.
The Nigerian auto industry imported and sold just between 8,000 and 10,000 new vehicles in 2017, a figure that is lower than the 15,000 projected for last year and is over 80 per cent fall from the 2014 to 2015 figures.
The Managing Director, Toyota Nigeria Limited, Mr. Kunle Ade-Ojo, gave this figure at the company’s forecast for the Nigerian automobile industry in 2017 at Toyota’s quarterly briefing in Lagos.
He said that the data showed that “imports dropped by about 90 per cent between 2016 and 2017 first quarter. In terms of retail sales, we are estimating, based on the information we have, that the auto market did about 2,000 vehicles compared to about 5,000 vehicles that were sold in first quarter of 2015, bringing it to a drop of over 50 per cent when you look in terms of retail sales.”
Meanwhile, Ndy Ekere a former Dean, Faculty of Science and Engineering, and a Professor of Manufacturing at the University of Wolverhampton, United Kingdom has said successive governments in the country have recognised the strategic importance of the Nigerian auto industry and its great potential in terms of job creation, contributions to foreign exchange earnings/savings, technology acquisition and skills development. For these reasons, the auto industry was seen as a key strategic driver for industrialisation, and an important component of the Nigeria Industrial Revolution Plan (NIRP) which was launched in 2014.
According to him, the National Automotive Industry Development Plan (NAIDP) which was subsequently launched in 2014 is aimed at attracting Direct Foreign Investment (DFI), reviving the comatose plants, attracting new automotive assembly and manufacturing plants, and encouraging the transfer of modern and advanced manufacturing technologies required for the production of affordable vehicles in the country. “Another strategic objective of NAIDP is to curtail Nigeria’s dependence on imports by meeting demand with domestic production and in the longer term to make Nigeria a regional automotive hub.”
He further said that the auto industry is widely recognised as the greatest engine of economic growth in the world and has been famously called “the industry of industries” by Peter Drucker.
In spite of the challenging global economic recession, it remains a key sector of the economy of every major country in the world today, and is vast, accounting for more than one in ten jobs in industrialized countries. He said: “It is for these reasons that most developing countries look to their local automotive sector to serve as the catalyst for economic growth and for technological development by capitalising on the many linkages that the auto industry has to other sectors of their economy.” Nigeria cannot realize its economic potentials without a viable the automotive industry which drives its content locally.”
To this end, the Minister of Transportation, Rotimi Amaechi has expressed concern over the continuing neglect of the country’s automotive policy by Nigerians, saying the preference for used cars popularly known as Tokunbo is killing the economy.
Amaechi, who spoke at a two-day workshop for chief executives of mass transit organisations on the topic: “A National Agenda for Sustainable Mass Transit Operation and Development, said that the potential in the nation’s automotive policy has been largely undermined by tastes for foreign used cars, a development he said accounted for most of the road accidents across the country. He explained that the Federal Government had deliberately crafted the Nigerian automotive policy to facilitate procurement of brand new made in Nigeria cars by Nigerians, instead of depending on importation of used cars at the detriment of development of the nation’s automobile industry.
The minister said the policy was also designed to create jobs through local manufacture of cars in the country, while lamenting the amount of foreign exchange that is pumped yearly into importation of used cars, a situation he said has kept the economy down.
“As you are aware, the key objective of the Nigerian automotive policy is to make new cars more affordable for Nigerians, while at the same time discouraging importation of used cars called Tokunbo.
The Federal Government believes that the policy will create significant employment as well as improve quality of manufacturing. However, till date, no major investor has taken full advantage of the automotive policy, apart from Innoson Vehicle Manufacturing Company,” he said.
FG sets new target for completion of Tin Can Trailer Park
The Federal Government has expressed it desire to ensure that the Tin Can Trailer and Truck Park at Apapa is completed this year, saying the cost has been raised to N9.55 billion, from the initial N8.66 billion budgeted for the project.
The Minister of Power, Works and Housing, Babatunde Fashola disclosed this while briefing newsmen in Abuja. Fashola said the truck park was part of the measures by the Federal Government to address the issue gridlock on Apapa Port access roads. He said: “The Ministry of Power, Works and Housing presented only one memo – a memorandum seeking the augmentation of the price due to the need for increased scope of work especially shoreline protection of the Tin Can Trailer and Truck Park, which is almost finished.
“It is an ongoing project. We sought council’s approval to augment the price from N8.66 billion to N9.553 billion which was an augmentation of N892.177. 289million. We expect that truck pack will now be completed this year and it will be one of the many multi-prong efforts being pursued to give relief to the Apapa area, to facilitate vehicular truck and trailer movement and also maritime and import and export business and general economic activity for Apapa in particular, Lagos at large and the country as a whole. The memorandum was approved.”
He disclosed that a design on a portion of the Apapa Creek Road and Coconut bridge has been handed over to the Dangote Group.
He further explained that what his Ministry intends to do would be to go for procurement process and FEC approval so that the project would take-off.
Fashola said, “I think road development is clearly the mandate of the Ministry of Power, Works and Housing, especially the work sector by legislation. There is multi-agencies’ collaboration. The Nigerian Port Authority, the Apapa Port, Tin Can Island that are critical to the economy are affected. So, there is multi-agencies’ interaction and that is what we have been having really and truly.
“You will recall that I briefed you about a four-kilometre stretch between the bridge from the Apapa Police when you are coming from Ijora, just to the junction of Point Road right through to Wharf Road, to the entrance of the Apapa Port. That is the stretch that the Dangote Group, the Flour Mills, and the NPA agreed to do as Corporate Social Responsibility as soon as possible. That is going on. It is a problem because after the works started, we found that the gas lines that supported most of the industries there and keep them in operation were within the right of way.
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