The federal government has secured a $500 million loan from the World Bank to address the identified gaps in Nigeria’s Electricity Distribution Companies (DisCos).
The funding supports the Nigerian Distribution Sector Recovery Programme aimed at improving the financial and technical performance of the DisCos, the Bureau of Public Enterprises (NPE) said in a statement.
The DISREP is designed to enhance the financial and technical operations of the DisCos through capital investment and the financing of key components of their Performance Improvement Plans (PIPs), which have been approved by the Nigerian Electricity Regulatory Commission (NERC).
Key areas of improvement include bulk procurement of customer/retail meters and meter data management systems; implementation of a Data Aggregation Platform (DAP); and strengthening governance and transparency within the DisCos.
“The Purpose is to finance the procurement of meters, a data aggregation platform, and technical assistance,” BPE said in a statement on Thursday.
The DISREP loan, particularly the Investment Project Financing (IPF) component, is expected to significantly benefit the Nigerian Electricity Supply Industry (NESI) by closing the metering gap, reducing Aggregate technical, Collection, and Commercial (ATC&C) losses, improving remittances and liquidity for the DisCos and enhancing the reliability of power supply BPE said the $500 million DISREP loan from the World bank offers concessional financing with more favourable terms than commercial bank loans. This will enable the
DisCos to invest in critical distribution infrastructure, improve ATC&C losses, increase power supply reliability and achieve financial sustainability in the power sector among others.
“Significant progress has been made in the preparation of the DISREP Program, with several key milestones achieved, and approval by the Federal Executive Council (FEC) on August 3, 2022. execution of the Financing Agreement by the Federal Ministry of Finance, Budget and National Planning, and the World Bank, adoption of the Program Operations Manual (POM) by BPE and TCN, obtained Legal Opinion from the Attorney-General of the Federation, Execution of the Subsidiary Loan Agreement, effective declaration of the DISREP Program on January 31, 2023, inauguration of the DISREP Technical Committee on May 6, 2024, inclusion in the federal government borrowing Plan, approved by the Senate Committee on May 16, 2024.
“To ensure repayment assurance, the Bureau of Public Enterprises sought and obtained approval from the Nigerian Electricity Regulatory Commission (NERC)
and the National Council on Privatisation (NCP) for a structured repayment hierarchy.
“This structure prioritises payments as follows: statutory payments (taxes); repayment of CBN market loans; market obligations; repayment of DISREP loan; DisCos’ net revenue; and this structured repayment plan aims to mitigate risks associated with repayment uncertainty and defaults, with regulatory sanctions imposed for any defaults,” the bureau said.
Nigeria is set to lead other African nations towards harnessing gas and other cleaner and greener energies to drive their industrialisation journey.
Nigeria as well as other African countries are investing in gas infrastructure and promoting its utilisation, and by extension are addressing energy poverty and environmental challenges.
Nigeria:, boasting gas reserves of over 200 trillion cubic feet (TCF), recently announced plans to execute a gas strategy that will trigger the nation’s industrialisation and economic growth. The Nigerian National Petroleum Company Limited (NNPCL)’s executive vice president for Upstream, Oritsemeyiwa Eyesan, shared the organisation’s plans to deepen domestic gas utilisation for power generation in a bid to support the manufacturing sector.
To transform the energy sector in West Africa, leveraging natural gas to drive economic growth and development is key and Gas for industrialisation contributes to increasing energy transition progress across the region, says Eyesan.
From revitalising key industries to fostering innovation, the strategic focus on gas underscores a commitment to propel West Africa towards a future built on energy security and economic resilience.
Through the Decade of Gas Initiative by the Nigerian government, industry leaders have continually conveyed a collaborative approach aimed at unlocking the country’s energy resources.
To drive progress in Sub-Saharan Africa’s energy market, energy stakeholders, government officials, regulators, and key industry players are convening at NOG Energy Week 2024 to deliberate on policies aimed at meeting West Africa’s energy demand.
The event, themed ‘Showcasing Opportunities. Driving Investment. Meeting Energy Demand,’ is scheduled to take place from 30 June – 4 July at the International Conference Centre (ICC), Abuja.
Speaking on what stakeholders should expect at NOG Energy Week 2024, the country director – Nigeria & Portfolio Director – Africa for dmg events, Wemimo Oyelana, said: “Our commitment for almost 25 years has been to provide a platform where industry leaders can have frank conversations that proffer solutions to the different challenges the industry is facing. NOG Energy Week has contributed significantly to key policy development & implementation over the years.
“We look forward to having industry stakeholders discuss pertinent issues including; Attracting International and Regional Funding Into Nigeria’s Energy Sector, Optimising the Significance of Natural Gas as the Fuel Of Choice, and Driving Industrialisation as a Catalyst for Economic Growth.”
The minister of Energy for Ghana, Dr. Matthew Opoku Prempeh, who recently confirmed his participation in the NOG Energy Week, amplified the need for competitive financing to propel natural gas projects.
A non-profit insurance organisation, Transparent Protection Ltd/GTE, has said the management of the National Insurance Commission (NAICOM) should consider urgent reforms including staff rationalisation, relocating its supervisory operations to Lagos where the operators are concentrated, and building a strong IT capacity to enable it to carry out supervisory duties effectively.
TPL said the call was necessitated by the fact that the commission was running at a rather languid pace due to a lack of funds and manpower to discharge its duties. “Although NAICOM like several other federal government’s institutions in Nigeria has always been relatively inefficient, at the moment, the inefficiency at NAICOM has become a matter of serious concern to stakeholders, and this must quickly be addressed to save the industry from imminent collapse,” lead director at the Transparent Protection Ltd/GTE, Dr. Sam Chukwuka Onyeka said at a press conference in Abuja at the weekend.
He blamed much of the problem on the recent implementation of 50 percent revenue deduction policy of the federal government which he said has further stifled the commission and its ability to effectively oversite the industry, a situation he said portends danger to the survival of the insurance industry in Nigeria.
“Without effective regulation, the industry in Nigeria will soon collapse. Even with close monitoring of the activities of the insurance institutions, as it used to be, it was difficult to guarantee 50 per cent efficiency in market discipline. It follows logically, therefore, that in the absence of effective regulation, as is currently the case, it must be taken for granted that in less than no time, the insurance industry in Nigeria will finally collapse,” he stated. In December 2023, the federal government implemented 50 per cent compulsory deduction from the revenues of some federal government revenue-generating agencies.
Dr Onyeka said there is a need to have a risk-based supervision by the NAICOM to save the industry from imminent collapse and the only way NAICOM can do that is to rationalise operations and leverage on technology to drive its processes,” he explained.
He further urged the insurance regulator to make its complaint bureau a department headed by a director to speedily address the mirage of complaints by Nigerians and boost efficiency
Onyeka alleged that the insurance industry in Nigeria is at the verge of collapse with funding being the most critical challenge at the moment.
In the immediate, TPL recommended that the federal government should consider removing NAICOM from the application of the 50 per cent statutory revenue deduction.
“In the long run, the federal government may think of increasing the percentage of the insurance supervisory levy, but apart from requiring amendment of the existing law, this may amount to indirect taxation on policyholders which may further drive the masses into poverty,” Dr Onyeka stated, adding that “This is the time to save the insurance industry in Nigeria from imminent collapse. All hands must be on deck.”
The foreign exchange (FX) market opened on Monday, with the naira exchanging with the dollar at 1,430 on the parallel market, popularly called black market.
This represents 5.49 per cent depreciation against the dollar, when compared with the level of N1,350 per dollar closed on Friday at the black market.
Traders attributed the naira weakness to increased demand for the greenback by end users who want to travel for business, tourism, health or education.
At the Nigerian Autonomous Foreign Exchange Market (NAFEM), the local currency closed flat on Friday at N1,400.40 per dollar, losing slightly by 0.16 per cent compared with N1,402.67 closed on Thursday.
The intraday high closed at N1,435 on Friday, stronger than N1,445 closed the previous day. The intraday low depreciated to N1,300.40 on Friday as against N1,299.42 on Thursday.
The volume of dollars supplied by willing buyers and willing sellers declined by 13.29 percent to $201.88 million on Friday from $232.84 million recorded on Thursday. The Naira closed flat at N1,380 against the dollar on the parallel market.
Looking ahead, “we expect the Naira to be exchanged within the current band, barring any shocks,” analysts at Afrinvest Securities Limited, said.
The acting director-general of Securities and Exchange Commission (SEC), Dr. Emomotimi Agama explained that delisting the naira from peer-to-peer (P2P) platforms will tackle the manipulation of the local currency’s value in the foreign exchange market.
Agama stated this during a virtual meeting with the Blockchain Industry Coordinating Committee of Nigeria (BICCoN) the umbrella body of all major blockchain and cryptocurrency Associations in Nigeria held yesterday.
This decision aims to tackle the manipulation of the value of the naira using cryptocurrency exchanges.
The country’s regulatory authorities have been investigating and scrutinising cryptocurrency exchanges in recent months.
On March 8, the biggest cryptocurrency exchange, Binance, stopped its naira services.
The SEC boss stated that the commission will not hesitate to utilise all the powers within its mandate to handle issues that are negative and pose a threat to national interest, saying that the Commission has come as a partner to seek collaboration in making sure that the capital market community is one that is respected globally for decency and fair play.
The SEC boss said the recent concerns regarding crypto P2P traders and their perceived impact on the exchange rate of the naira has underscored the need for collective action and dialogue within the financial market ecosystem.
He said, “there are basic practices as enshrined in the Investments and Securities Act 2007 and we expect that everyone will abide by those rules. Some may say there are no rules to play by, but do not forget that we have the Investments and Securities Act 2007 that some actions by participants today may be violating, hence the law is the law irrespective of the technology used.
“However, for the specific Digital Asset regulatory regime that many have been calling for, we want to assure you that we are working tirelessly to establish an accommodating regulatory guideline for digital assets. The SEC as your regulator is desirous to work with you by providing a level of assurance that is needed by all that are operating within the rules of the market.”
The DG stated that the proposed regulatory guidelines which is currently being fine-tuned with suggestions by various stakeholders, will encompass various activities within the cryptocurrency ecosystem ranging from Wallet providers, digital asset custodians and fund managers, Cryptocurrency Crowdfunding, Initial Coin Offerings (ICOs), Security Token Offerings (STOs), Initial Exchange Offerings (IEOs), Cryptocurrency Exchange platform providers, Virtual Asset brokerage services, others, ensuring that every Nigerian playing within the industry with the potential to contribute to economic progress is included, supported and properly regulated.
Agama stated that one of the things that needs to be done is delisting the naira from P2P space in order to avoid the level of manipulation that is currently happening enjoining participants in the crypto space to be patriotic enough to name and shame those that are involved in disrupting the markets negatively.
“With our deep understanding of this industry and the cryptocurrency sub-sector, we recognize the importance of collaboration and cooperation in addressing the challenges we face; hence your insights and suggestions are invaluable as we seek to navigate these complexities together. We need your support as much as you need ours.
“On that note, I want to emphasise that we are working on different fronts to sustain decent practices within our market, however, we are here to meet ourselves to know those playing within the sector decently and are open to hearing your suggestions on how we can effectively manage all obscure cryptocurrency trading activities within our jurisdiction p2p inclusive irrespective of the challenge we all know that p2p trading posses,” he said, adding that players in the industry must explore innovative solutions to the problem and strike the right balance between encouraging innovation and safeguarding national economic interests. “This we will do in a friendly and firm manner, to enable us to achieve the desired result.”
Agama stated that one of the things that need to be done is delisting the naira from P2P space to avoid the level of manipulation that is currently happening enjoining participants in the crypto space to be patriotic enough to name and shame those that are involved in disrupting the markets negatively.
“I want to seek your cooperation in dealing with this as we roll out in the coming days the regulations that would take control of these areas. We want to ensure that this management will ensure that people or institutions that require registration with the SEC are quickly licensed. We assure you that we will give guidance when necessary and do well to streamline the processes to make it less difficult.
“We ask that those involved in sharp practices that undermine national interest should desist. It is in our interest as a people to protect what belongs to us. We encourage you to reach out to us by naming and shaming the bad actors. Together, I am confident that we can weed out bad actors and harness the immense potential of this progressive technology for the benefit of all Nigerians in tandem with this government’s renewed hope agenda,” he added.
In his remarks, chairman of the Fintech Association of Nigeria Dr. Babatunde Oghenobruche Obrimah commended the Director General for his bold steps and the relationship with the ecosystem and pledged their commitment to work with the DG and granted him all the support that will help him succeed in sanitising the virtual ecosystem.
On their part, BICCoN requested the setting up of a working group to tackle the various challenges facing the crypto space in a bid to move the market forward.
In his remarks, the chairman of the Fintech Association of Nigeria, Dr. Babatunde Obrimah commended “the DG for his bold steps and the relationship with the ecosystem and pledged their commitment to work with the DG and grant him all the support that will help him succeed in sanitising the virtual ecosystem.”
On their part, BICCoN requested the setting up of a working group to tackle the various challenges facing the crypto space and in a bid to move the market forward.
Nearly two weeks after telecommunications operators issued a statement seeking the approval of the federal government to increase tariffs on their services, the federal government has yet to make any official statement on the matter.
The telcos, under the aegis of the Association of Licensed Telecom Companies of Nigeria and the Association of Telecom Companies of Nigeria, issued a joint statement asking the government through the Nigerian Communications Commission (NCC) to expedite the approval.
The two bodies, in their statement, based the proposed increase on the increasing difficulty in doing business following the forex crisis and the losses incurred by the telcos. The statement said, “Despite the adverse economic headwinds, the telecommunications industry remains the only industry yet to review its general service pricing framework upward in the last 11 years, primarily due to regulatory constraints.
“For a fully liberalised and deregulated sector, the current price control mechanism, which is not aligned with economic realities, threatens the industry’s sustainability and can erode investors’ confidence.” However, since this request was made the government has not responded, which might be an indication that it may not approve the tariff hike because of the hardship it will impose on Nigerians already facing enormous hardship.
Efforts to reach the minister of Communications, Innovation and Digital Economy, Bosun Tijjani, did not yield fruit as he could not be reached for comments.
A source within the NCC told our correspondent that the government might not grant the price hike request out of concern for Nigerian consumers. He added that the approval will not be given until the government had done cost-based studies to ascertain the impact on telcos based on micro and macro variables.
Telecommunications operators in the country, including MTN Nigeria and Globacom, had asked for the approval due to foreign exchange losses and rising energy costs which forced some of the operators to post losses last year.
The telcos appear to be taking a cue to raise tariffs from MultiChoice, a South African pay television company, which raised its tariff. Several companies including electricity firms (DisCos) and brewing companies have also raised their prices in recent times.
The telecom associations urged the government to facilitate a constructive dialogue with industry stakeholders to address pricing challenges and establish a framework that balances consumers’ affordability with operators’ financial viability.
The telecom industry appears to be among a few sectors that have yet to review their prices despite the rising inflation in the country amid other economic challenges. They blamed this on the regulatory restraints that had been preventing them from pricing appropriately. The associations have reportedly made similar proposals in the past but former minister of communications and digital economy, Prof. Isa Pantami, refused to allow the tariff hike. The chairman, Association of Licensed Telecom Operators of Nigeria, Gbenga Adebayo, was quoted as saying that cost reflective tariff was non-negotiable.
“We have seen the impact of price control in other segments of the economy, like power. If providers cannot operate sustainable business models, then they’ll stop investing. When that happens, the existing infrastructure starts to crumble.
“For power, a consumer can choose to take ownership of the solution by buying a generator, or a solar panel. For fuel, the government can step in as a provider of the last resort and manage a subsidy regime that mitigates the impact on the population. Those options are not available in the telecoms sector. There is no self-help solution,” he explained.
Due to the difficult operating environment, investment in the sector has reportedly dwindled to $134m in 2023 from $456.8m in the previous year, a decline of $322m, according to the National Bureau of Statistics. This represents a decrease of approximately 70.5 per cent.
The federal government as part of repositioning the Nigerian capital market, announced a new board for the Securities & Exchange Commission (SEC) that include market technocrats, professionals, and stockbrokers who have, over the years, contributed to the capital market growth in the country.
The list include: chairman, Mr. Mairiga Katuka; new director-general,, SEC, Mr. Emomotimi Agama who replaced Mr. Lamido Yuguda; Frana Chukwuogor, executive commissioner (Legal and Enforcement); and Mr. Bola Ajomale, executive commissioner (Operations).
Others are: Mrs. Samiya Usman, executive commissioner (Corporate Services); Mr. Lekan Belo, non-executive commissioner and Mr. Kasimu Garba Kurfi, non-executive commissioner.
Task Before The New Board The new board of SEC is coming in a year the Central Bank of Nigeria (CBN) announced a new capital base for banks operating in the country. On March 28, 2024, a momentous event unfolded in the banking sector when the apex banking regulating body issued a directive to financially reshape the domestic money banks (DMBs) theatre of competition.
In a direct memo, the regulator revised the capitalization requirements, setting new benchmarks for banks with international operations (N500 billion), national licenses (N200 billion), and regional licenses (N50 billion).
This directive, a crucial step towards a stronger banking sector, initiated a time-sensitive two-year journey that will start on April 01, 2024, and end on March 31, 2026. SEC in 2004, played a critical role in the banking sector recapitalisation reform as the key element of the reform was a prescribed minimum capital base of N25 billion for each bank.
For effective regulation of the market, the new board at SEC is expected to apply various modern-day regulatory/supervisory tools, monitoring/inspection, investigation, enforcement and enforcing rule making for effective exercise.
Also, under Yuguda, the SEC successfully launched a new e-Dividend Mandate Management System (eDMMS), making it easier for investors to mandate their accounts for electronic dividends. The link to the portal can be found on the SEC’s website. Despite many efforts, the unclaimed dividend has failed to drop, creating room for mixed sentiments.
The current board at SEC will need to effectively update market stakeholders on the state of unclaimed dividends in the capital market, and how the government is utilizing it to grow the economy. Other key issues are: investors’ education, passage of the Investments and Securities Bill 2024 and the implementation of the Revised Capital Market Master Plan (RCMMP) remains ongoing, Identity Management, establishing a regulatory framework for the digital asset space, commodities trading ecosystem, among other task confronting the capital market.
Stakeholders’ Optimism The capital market stakeholders commended President Bola Tinubu for the appointment of Dr Emomotimi Agama as the director-general designate for the Securities and Exchange Commission. President Capital Market Academics of Nigeria, Prof. Uche Uwaleke said, Agama had been in the commission for over 20 years, urging him to continue from where the present SEC DG stopped. He said that implementation of the Nigerian capital market Masterplan must be paramount in his agenda.
The managing director of Arthur Steven Asset Management Limited, Mr. Olatunde Amolegbe said that the appointment was well thought through and appropriate for the enhanced growth and development of the capital market.
“Most of them are well grounded capital market professionals with decades of experience under their belt both locally and internationally. Agama has been a regular in the Nigerian capital market for an upward of 25 years or maybe more as far as I know,” he said.
On agenda for the new team, Amolegbe enjoined the new team to continue with the implementation of the capital market masterplan. He also urged them to develop the nation’s commodities exchanges to fill the gap of trading in locally sourced soft commodities such as Oil & Gas and Agricultural products.
Amolegbe added that the new team should ensure that the regulatory-induced banking recapitalisation is conducted in an efficient and orderly manner, saying that the medium-term goal will be to position the capital market to facilitate the $1 trillion economy goal of the federal government will be key.
The former secretary general of Independent Shareholders Association of Nigeria(ISAN), Adebayo Adeleke lamented that a lot of issues and complaints that need urgent regulatory attention are being delayed unnecessarily, urging the new board to focus more on investor protection to boost confidence in the market.
Adeleke urged the SEC to urgently appoint investors/shareholders’ representatives on the Capital Market Committee (CMC), adding that it is incomprehensible for Capital market decisions to be made in the absence of investors who are the owners of the capital.
Agama Right For SEC DG? Before the appointment, Agama served as managing director at the Nigerian Capital Market Institute (NCMI) a subsidiary of the Securities and Exchange Commission. Agama brings a wealth of knowledge and expertise to the SEC, having served in various capacities including head of Registration Exchanges and Market Infrastructure, and head of Public Offerings where he oversaw fundraising activities for numerous companies. He has also served as the special assistant to the commission’s executive commissioner operations for eight years. During this time, Agama advised on issues relating to securities and investment services, fixed income securities, collective investment services, financial standards and corporate governance. Emomotimi Agama is a ranking member of the Rules Committee and a member of the SEC committee on the adoption of IFRS in Nigeria and the SEC arrow head for the introduction of Derivatives trading in the Nigerian Capital Market. Agama is a Chartered Management Accountant, Economist, Investment Analyst, A Chartered Stock Broker and a Risk Manager. Prior to joining the SEC was at various times with the University of Benin and Office of the Accountant General of the Federation. Agama is a Fellow of the IFC-Milken Institute Capital Markets Program. He is a graduate of Rivers State University where he got his first degree. He also obtained a doctorate degree in Economics from Nile University.
Equities Performance Following Agama Resumption Following the resumption of Agama as the DG of SEC on May 2, 2024, the Nigerian equities market last week returned back to positive position after six consecutive weeks of bear dominance on the local bourse. Accordingly, the All-Share Index advanced by 1.46 per cent week-on-week (W-o-W) to close at 99,587.25 points. Also, investors gained N812 billion W-o-W to close at N56.323 trillion.
Special assistant to the president on youth initiatives, Titilope Gbadamosi, has called for the adoption of technology especially, the Artificial Intelligence (AI) for empowerment of youths and deepening of democracy in the country.
Gbadamosi made the call at the 2024 close-out ceremony of the Accelerating Youth Participation in Governance (AYPG2024) Fellowship organised by PROMAD in Abuja with the theme: “Rethinking Youth Participation in Governance in the Era of Artificial Intelligence.”
He urged the successful fellows to downscale the knowledge gained and to take up the front seats on matters of leadership, political participation and governance of their country.
She noted that President Bola Tinubu is committed to youth empowerment in the realms of politics and economic advancement, hence he has appointed many young persons in his cabinet and other positions. While encouraging youths in the country to square up with their peers abroad, Gbadamosi said; „The driving force behind the youths abroad is same for the youths in the country; regardless of locations we have a common tie that binds us by heart.
Those who are abroad and those who are in Nigeria, we all want a better Nigeria and we are all working towards that. Especially the young people who are very active in governance, just as those who are here are passionate about Nigeria. Those who are abroad are equally passionate about Nigeria, because there is no place like home.“
On his part, the executive director of PROMAD, Daisi Omokungbe, said the AYPG2024 aimed at improving youths‘ understanding of the use of Artificial Intelligence and its impacts in leadership, political participation and governance.
Omokungbe said Al is very important for the youths who are agents and enablers of new technology and that was why PROMAD took this year‘s fellowship from that aspect. He said, „What we have done today is that we have brought 18 young leaders from the six area councils of the Federal Capital Territory and we have trained them on participation in governance.
The training and the insight of the keynote speaker and the panelist today has also shown how we can harness technology in terms of data, analysing fake news and for better informed decision making.“
Also, the executive director of Yiaga Africa, Samson Itodo said Artificial Intelligence can accelerate decision making that can equally advance development, spur economic growth as well as improve critical sectors of the economy and democracy.
If you are working on elections, you can use AI to clean up your voter‘s register especially if your voter register contains death and fake unqualified persons in the voter register. You can use AI to even determine and locate your polling unit. AI can also be used to counter disinformation and misinformation which is posing a huge threat in our economy and also in our democratic life,“ he said.
In her remarks, the representative of Nigeria Youth Future Fund (NYFF), Maimuna Sani, urged the participants to apply the knowledge gained from the fellowship, to hold and engage their elected policy makers and representatives to ensure that they are included in government plans, policies and programmes.
She said the AYPG2024 fellowship emphasised their commitment to strengthen youth participation in governance, to activate, amplify and mainstream youths’ voices into policy conversations.
Danish shipping company, APM Terminals, Nigeria, yesterday, said it has a plan to invest $500million into the nation’s economy through the maritime sector in the coming years. Recall that there has been controversy after the special adviser to the president on media and publicity, Ajuri Ngalale, said Nigeria secured a $600 million investment to expand existing port infrastructure to accommodate more container shipping services in Nigerian ports.
There are reports that A.P Moller-Maersk, denied the investment commitment with the federal government.
However, in a statement titled, ‘Our Vision For Nigerian Ports and Growth’, by the chief executive officer, APM Terminals, Keith Svendsen, and a copy made available to LEADERSHIP, said they have developed plans to undertake necessary terminal upgrade investments in Apapa to give access to vessels with deep draft and requiring large ship-to-shore cranes.
According to him, the company had the investment discussion with President Bola Tinubu in February and in April, saying they have intensified talks with the administration and port authority to make the plans concrete.
“At APM Terminals, we believe strongly in the future prospects for the Nigerian economy, and the long-term opportunities that the current economic reforms and invitation for international investments will generate. At Onne, we are concluding a USD115 million upgrade project to ensure the terminal has sufficient capacity and capabilities to service the south/eastern Nigeria market and the growth expected in coming years, while the Apapa port continues to offer a unique access to Nigerian importers and exporters to international markets through not just road, but also rail and waterways, by means of barges,” the CEO stated.
He continued, “Having been present there for close to two decades, we believe that Lagos, as the main port, needs further investments to cater for increasing trade volumes and to be able to attract large container vessels. While greenfield terminals like Lekki and later on Badagry will support economic growth in the long run, the more urgent requirement is in our view to upgrade the existing port infrastructure to ensure road, rail and barge networks can connect directly to mainline shipping.
“We have developed plans to undertake the necessary terminal upgrade investments in Apapa to give access to vessels with deep draft and requiring large ship-to-shore cranes. We seek to do this under a long-term agreement with the government to support our ambition to continuously improve the import and especially export opportunities for the country, creating jobs and diversifying opportunities locally.
“As we are still not at the finish line, we have intensified talks with the administration and port authority to make these plans concrete and I’m pleased with the significant progress made towards implementation. That is why I earlier this year publicly told about the proposal to invest more than USD 500 million that we have discussed with the President Tinubu both in February, and which we further elaborated in late April. It should go hand-in-hand with a long-term partnership.
“For us in APM Terminals, it is important that we not only operate highly efficient terminals, but also that we play a role contributing to the development of the local communities and bring in opportunities for growth and new prospects for Nigerians,” he revealed.
Svendsen, stated further that the terminal believed in a long term opportunities and investment in the nation’s economy, saying Nigeria is a key market in Africa to the company.
“To APM Terminals, Nigeria is a key market in Africa and we are proud of the central role we play enabling containerized trade between the country and the rest of the world. A.P. Moller-Maersk has been present in Nigeria for more than 35 years and our vessels have been serving the country essentially since Independence.
Today, our two container terminals in Lagos and Onne handle about half of the containers going in and out of Nigeria, and our vessels transport close to a third. APM Terminals have been operating in Nigeria since 2006 and have invested more than $600 million during this period in equipment, including trucks and container cranes as well as in advanced operational controls, digital interfaces, and extensive training of employees to provide customers with a fully modern and safe experience.
“We employ about 2,500 people directly (99 per cent Nigerians) and indirectly create employment for about 65,000 according to a recent socio-economic study.”
The chief executive officer of Centre for the Promotion of Private Enterprise (CPPE), Dr Muda Yusuf has said the frequent changes in the customs duty exchange rate have become a huge burden on the business community.
He stated this in a release sent to LEADERSHIP, saying “this has led to high volatility in cargo clearing costs, worsening inflationary pressures and aggravating investment risk , especially in the real sector of the economy.
“These frequent changes are profoundly detrimental to production, planning and other real sector activities in the Nigerian economy.”
He noted that “in the first quarter of this year, there were changes in the customs duty exchange rate twenty-eight times. In April , the frequency of changes would be close to ten times or even more. As at May 1, 2024, the rate has jumped to N1373.65 per dollar ($). It was less than N1200 per $ few days before.
“It is extremely difficult for investors to plan under these unstable circumstances. The situation has introduced an unprecedented level of uncertainty and unpredictability to the international trade dynamics. Investment risk has become elevated, planning has become difficult, risk management has become challenging and investors’ confidence is being weakened.”
He pointed out that it is double whammy for investors to grapple with volatility in the foreign exchange market and contend, concurrently, with high level of unpredictability in the international trade ecosystem, saying “this is not consistent with our growth aspirations at this time.”
CPPE appealed to the Central Bank of Nigeria (CBN) to adopt a framework to minimize volatility in the customs duty exchange rate in line with the commitment of the present administration to bolster investors’ confidence and drive economic growth.
According to Yusuf, such framework should adopt a quarterly customs duty exchange rate, after due consultation with the fiscal authorities. We propose a commencement rate of N1000 per $ customs duty exchange rate.
“Consultation with the fiscal authorities is imperative because of the trade policy implications of such decisions. It is also consistent with the commitment of the present administration to effective coordination between fiscal and monetary authorities.”
