NASS Begins A Process To Make Growth Enhancement Scheme (Ges), A Law
Banks alone can’t fund power sector – FBN
Nigerian banks would need the support of institutional and foreign investors to fund the huge resources needed to drive various ongoing infrastructure projects, especially the over $8bn required to meet the deficit in the power sector for the next 10 years.
The Director and Head, Project and Structured Finance, FBN Capital Limited, Mr. Patrick Mgbenwelu, has said.
He spoke at the first FBN Capital Project and Infrastructure Finance Conference in Lagos, noting that between $8bn and$12bn would be needed yearly for the next 10 years to finance the nation’s power projects.
The amount, he said, was needed to bridge the large deficit in the power demand and supply of the nation, which the banks alone would not be able to fund.
“This funding cannot come from the banks alone; there is the need for institutional investors and foreign investment to bridge the funding gap,” he noted.
Mgbenwelu said the Greenfield Independent Power Projects would emerge to bridge the energy gap, while government’s Public Private Partnership commitment would take care of various infrastructure projects such as rail lines, roads, bridges and airports.
Participants at the event were unanimous in their position that although Nigeria’s vast natural resources and growing power and infrastructure demands had garnered substantial interest from lenders and developers from across the globe, there were challenges in ensuring the country’s huge potential was realised.
The FBN boss said the multi-billion dollar government projects would require private sector involvement, hence the need for creating Special Purpose Vehicles as obligator financial vehicles.
Highlighting the importance of infrastructure finance, he said investors could choose to approach finance institutions and seek funds either as a corporate entity or directly through the projects.
According to him, project finance as an option for accessing funds is an avenue for managing risks, instead of bearing them directly as a corporate organisation.
He said, “Additional expansion funding can be raised with ease, subject to the project achieving steady state post completion. Project financing vehicles can be credit enhanced via a rating which can exceed that of the actual sponsors.”
He added it also ensured and forced extreme financial and project management discipline.
Another edge this option has over corporate financing is that once the project completion is achieved, it can be used as a template for rolling out other projects, according to him.
Mgbenwelu explained that funding under such an option was primarily based on future cash-flow generating capacity of the project.
Hence, in the absence of tangible assets, projects could still get funding, as opposed to corporate finance funding whose funding was generally asset-backed, he added.
Agriculture Is Big Business, Not Social Service – Aina
Chief Olu Aina is the chairman of the recently constituted board of the Governing Council of the National Root Crops Research Institute (NRCRI), Umudike, Abia State. In this interview with Suleiman Abdullahi, he speaks on the board’s vision and mission towards attaining the nation’s quest to achieve agricultural transformation.
What do you attribute your recent appointment as board chairman of NRCRI to?
First of all, I will attribute my appointment to the will of God because it is God that gives position . Secondly, I will like to give credit to Mr President , Dr Goodluck Ebele Jonathan GCFR who has reposed this great confidence in my ability , virtues and experience acquired in the private sector over the past 35 Years. I think these are the things that contributed to my being appointed as the Chairman of the National Root Crops Research Institute, Umudike.
Now that the governing council has been inaugurated, what will be its immediate focus?
As you know, the governing council will not be involved in the day-to-day running of the Institute. We are appointed by the President and charged to provide visionary and strategic leadership as well as set out the economic, financial, operational and administrative programmes and targets in line with the overall objectives and directives as set out by the Honourable Minister of Agriculture and Rural Development on behalf of Mr President. Be that as it may, our immediate focus will be to ensure the success of the transformation agenda of the President viz a viz the Agricultural Transformation Agenda (ATA) being piloted by the Minister of Agriculture and Rural Development, Dr. Akinwumi Adesina. You will agree with me that a nation that cannot feed itself is a nation that cannot stand on her own. Nigeria does not have any reason whatsoever to import food. This nation is blessed with abundant land, good weather and good people but we are where we are as a result of our loss of values in years past and this has made us to become a net importer of virtually every food item that is even causing more health hazard to our citizens. So basically the focus of the Board, which God has given me the privilege and grace to lead is to ensure that the Institute fulfills its mandate by helping to ensure that Nigeria becomes a country that will feed her citizen and also export to other nations thereby creating wealth and eradicating poverty. We will support all the research efforts that are geared towards making our nation self sufficient in food production in our particular area of mandate of root crops and tubers, vis-avis cassava, yam, potato, cocoa yam, and ginger. My board will strive to ensure originality in research initiative and take a lead in the nation’s research agenda geared towards development.
One major problem that has faced research institutes in the country has been funding. How do you hope to tackle this?
Funding is a major problem of every research institute in the country and even the nation at large. Even though funds might be inadequate, we need to focus on how to sensibly, honestly and judiciously appropriate and utilize even the little funds that we have. If the little funds we have are not judiciously utilized, no matter the amount of money we have, we can’t get the desired results. Nigeria enjoyed oil boom in the 1970s; we didn’t make any useful use of this resource, all our infrastructure have broken down, the institutions have collapsed, because the funds are not appropriately utilized. I believe that funding is a problem but it is not our major problem. The problem is our orientation towards public institutions and the way we see public resources as an opportunity to share the national cake. The moment we remove that idea from our heads, we will find out that the issue of funding will be a thing of the past. Besides relying on the federal purse, we will also aggressively court and leverage on foreign donor agencies assistance and ensure that we stay on the cutting edge of relevant research work. How ever I will strongly recommend that all our research institutes be properly funded to enable them carry out their statutory duties since every nation’s development depends on research.
How do you see agriculture generally and what has your Institute done so far?
Looking at it as a sector of the economy, agriculture is very important and critical to the corporate existence of any nation. Agriculture is big business and not a social service as we have always taken it to be. This is why you find out that other countries invest in agriculture as pure business. For instance, you have an American family man who drives to his farm in an air-conditioned car, he does his work , he lives in a good house and when those goods are harvested he exports, if it is not business why does he have to export them. So agriculture should be seen as business. The moment we see agriculture as business, our orientation will change and it will no longer be a sector where money is being shared. Look at the issue of fertilizer procurement and distribution in the past; thanks to the present administration who has been able to break the racketeering in the sector and has made this critical input available and easy for big and small farmers to access. Over 10 million small scale farmers are now enjoying subsidy by reason of the inputs voucher system deployed in the countrywide FMARD driven Growth Enhancement Scheme (GES). I am happy to inform you that the Institute which I now chair is making substantial contribution to national food security and sufficiency through research and extension activities on root and tuber crops , to the extent that Nigeria is now ranked first in the world in the production of cassava, yam, and coco yam . The institute has developed and released to farmers about 43 varieties of cassava including five Vitamin A-rich varieties. We have also developed and released to farmer 21 new hybrids yams and also increased the production of Irish potatoes to about 1,000,000 metric tones in 2013 from less than half of that in 1975.
We have also developed and increased the cultivation of ginger in Nigeria and in particular in Kaduna State. In all these areas, we are determined to improve and double our efforts in particular on cassava because cassava is of great economic and social value. There is nothing in cassava that is useless as everything in the crop has value. There is no human that has no use of cassava or its bye-products on a daily basis. We use it in the pharmaceuticals, food industry, as table food, animal feeds and even in the production of bio fuels. Generally, agriculture is a major and effective vehicle that can create sustainable wealth, create employment, improve rural social infrastructures, reduced and eradicate poverty and improve life expectancy
The major problem with cultivation of cassava as experience has shown is the market. How will you address this?
Former President Olusegun Obasanjo had a very lofty idea about agriculture in general. If you remember, he is one of the retired presidents that went into big time farming. However, the implementation of the policy may have been faulty but the general idea cannot be faulted. Agricultural production is a value chain, it doesn’t end in cultivation alone, it starts from land clearing, provision of improved seedlings, pesticides, cultivation, storage, processing and marketing. Unlike before when all attention was given to primary production and other levels of the value chain neglected, the present administration through the Transformation Agenda has now taken a holistic approach to the development of the crop value chain capturing production, storage, processing and markets. The present administration is tackling agriculture head-on and I can assure you that in the next few years, agriculture will be the lucrative and domineering business sector to beat in Nigeria. I am also aware that this government has gone into private partnership with big users of cassava chippings and cassava flour, so there is guarantee market for cassava presently.
Apart from cassava and other root crops, is the Institute developing other areas in the agric sector?
You will recall that I had mentioned earlier all that the institute has done and is still doing in the area of research into roots and tuber crops. However the institute also carry out and provide technical and vocational trainings to farmers , students and agro-based industries. The Institute has a College of Agriculture in Isiagu in Eboyin State in additions to other five outstations located in Plateau, Benue, Anambra , Kaduna and the FCT.
We have very dedicated and experienced people who are managing the Institute. The institute in conjunction with other research institute have conducted research into post harvest technology , which has enable processing of root and tuber into value added products.
What is your plan for the welfare of staff in the Institute?
We have just been inaugurated, I don’t think there is any staff welfare challenge for now but that does not mean that there is no room for improvement in welfare. I am sure if there are grey areas, we will look at them and address them within the limited available resources and within the boundary of the law guiding the employment and benefits of public servants.
How will the Institute key into the transformation agenda of the federal government?
We have keyed into it already by working in tandem with other agencies. The Institute has researched not only into seedlings but even the processing of agricultural product. We are doing these in conjunction with other agencies. We have so many implements that have been researched and produced for farmers that will grate cassava, that will dry them, that will make them into pellets and will make them into cassava chippings. These implements are already in the market. The Institute’s commitment to the ATA is not in doubt by any means.
There is this call for the privatization of research institutes; do you support it?
I know that in developed nations the private sector plays very key role in research and development. It is important that government continues to play supportive, moderating and regulatory role in agriculture. I will rather suggest a transition into Public Private Partnerships (PPP) in research and development whereby government and the private sector who are the ultimate users of research outcomes synergize in the funding as well as directing the focus of research activities in the sector. I think that is where we should be looking at but for now, let government play its role, let the research institutes play their roles, the private sector too and let all stakeholders help the agricultural sector to stabilize first.
As we approach 2015, what is your advice to politicians?
My advice is that everybody should think first about Nigeria; we should see ourselves first as Nigerians. I am afraid the way politicians are going, we might shoot ourselves in the leg. We should come back to our senses and think of the best for our nation not what will be best for our tribe or our religion .
The debate is whether President Goodluck Jonathan should contest or not.
President Jonathan is a citizen of this great country; he has every right to contest election within the dictates of the Constitution just like any other person. The Constitution is the supreme document that binds us together in this country and not any claimed ‘gentlemen agreement’. We have a document that guarantees the fundamental human right of every citizen in this country and I think we should stand by it. I do not think this debate is necessary. Anybody who wants to contest is free to come out and test his or her popularity. Let the people decide who governs them. President Jonathan has the right to contest and should be left alone too.
Industrialists Insist on Economic Diversification
The Lagos Chambers of Commerce and Industry (LCCI), has once more warned against the danger of having the oil sector as the country’s economic mainstay. Thus, the Chamber stressed the need for the diversification of the economy.
The President, LCCI, Mr. Goodie Ibru, stated this in an address presented at the organisation’s Independence anniversary lecture held in Lagos.
He noted that the economy had undergone major transformation over the decades, citing the remarkable developments in the telecommunications, entertainment, services, financial and retail sectors.
“However, the economy is still too dependent on oil and gas; weak in domestic production and local addition. The diversification of the economy has become imperative and compelling. Disproportionate reliance on natural resources exposes the economy to tremendous risk of shocks and vulnerability,” Ibru warned.
The LCCI boss pointed out that studies had shown that countries that failed to diversify their economies and depended almost entirely on natural resources recorded less development and growth and were characterised by high incidence of poverty.
“This presents a paradox of poverty in the midst of plenty and underscores the complacency which natural resources endowments often breed in many developing countries,” he added.
Furthermore, Ibru argued that the heavy reliance on crude oil, a non-renewable resource and failure to diversify the economy, had turned out to be the country’s undoing.
He listed some of the challenges that had emerged as a result of the overdependence on crude oil to include regular conflict within the society; Dutch disease, revenue volatility and corruption.
Ibru explained: “Dutch disease is a situation where revenues from natural resources exports ultimately results in the neglect and damage of the productive sector of the economy. The manufacturing sector for instance currently accounts for less than five per cent of the country’s Gross Domestic Product (GDP).
“Public sector revenue is characterised by large volatility as a result of fluctuations in commodity prices. Again, our current experience underscores this position.”
Speaking on corruption, he said: “Natural resource economies are generally more corrupt because the political actors are often preoccupied with revenue sharing than wealth creation.
“I have reviewed the implementation of undue dependence on natural resources to underscore the need for economic diversification, development of our human capital and promotion of the culture of enterprise. This is the way to ensure an economic progress that is inclusive, equitable and sustainable,” he added.
State Of Emergency: NEMA Distributes Relief Materials In Adamawa, Borno, Yobe
The National Emergency Management Agency (NEMA) said it distributed relief materials in parts of Borno, Adamawa and Yobe to cushion the effect of the State of Emergency imposed on the states.
The North-East Coordinator of the agency, Alhaji Mohammed Kanar, said this in an interview with the News Agency of Nigeria (NAN) in Yola on Monday.
Kanar said the measure was in compliance with President Goodluck Jonathan’s directive to provide succour for people in the states affected by the state of emergency proclamation.
“As you know the president has directed that measures should be taken to cushion the effect of the state of emergency.
“Even before the president’s directive, the Director-General of the agency, Mohammed Sani Sidi, has directed us to act.
“So, we organised direct distribution of relief materials to victims and those in places affected by insurgency activities,’’ Kanar said.
The coordinator said that in Borno, relief materials were distributed in places like Maiduguri, Marte, Baga, Gwoza and Bama.
He said the distribution of the relief materials in Damboa would be done at a later date.
“In Yobe, we gave relief materials in places like Gashua, Damaturu and Potiskum, while in Adamawa, we presented relief in Yola, Mubi and some other places,’’ he said.
On the issue of flood, the coordinator said all necessary arrangements had been put in place to tackle the threat in the sub-region.
“We have identified safer grounds and camps for communities under threat. In Adamawa, for instance, we have 10 sites in Yola alone.’’
He said for now, the flooding had started on the Komadugu-Yobe River.
Kanar said the flooding was already affecting farmlands in Jakusko and Mobbar Local Government Areas of Yobe and Borno, respectively. (NAN)