NIGERIA - Globus Vision

Transcription

TUESDAY 4 DECEMBER, 2012
NIGERIA
See this report at
Part 2
worldfolio.co.uk
A special supplement by GLOBUS VISION
The emerging voice
of Africa
Encouraged by successful reforms, investors are aiding Nigeria along its path of economic development and diversification
As Africa’s most populous country and with
a host of natural resources at hand, Nigeria
has steadily built on its position as a standard bearer for the continent as a whole.
Under President Goodluck Jonathan and
his People’s Democratic Party (PDP), this
country of 170 million has forged for itself
a key role on the international stage as it looks
to build on its reputation around the world.
With steady GDP growth averaging at
around 7 per cent over recent years, along
with the recent implementation of a more prudent fiscal plan and a steady relationship
with both Western powers and countries such
as Russia and China, Nigeria remains one of
Africa’s most prominent players. And although the global economic climate has affected the country, income from relatively
steady oil prices have helped Nigeria to continue to develop and improve.
Over 80 per cent of the government’s revenue is derived from oil-related products and
services, while 95 per cent of its foreign exchange earnings also comes from this sector. Inevitably, the global slowdown has
hit the country’s oil-related income over
recent years. However crude oil output has
remained steady recently at around 2.4 million barrels per day.
The country is keen to attract foreign investment and President Jonathan has repeatedly stressed his desire to create
attractive economic conditions to achieve
this. Nigeria’s economy has also been boosted by new avenues for expansion, including the telecommunication, banking,
construction and manufacturing industries.
These areas are all expected to deliver opportunities for growth, with the country’s
banking and telecommunications sectors
seen to offer particular potential.
Nigerian financial organisations are already broadening their scope to new territories. Seven lenders have moved in to
Ghana, while the requirements of the oil industry are likely to provide further opportunities. The telecommunications industry
has also seen recent investment, with South
African firm MTN spending $3.1 billion
on upgrading its mobile network in the
country, an example of the direct investment
being made to build and improve upon Nigeria’s infrastructure.
On a visit to Berlin in April,
President Goodluck Jonathan
firmly reassured German
businesspeople that Nigeria
is safe for investment
With non-oil sector growth expected to
help drive economic expansion, the government has also focused its attention on policy reform plans, including an increase in
capital project budgets across a number of
sectors. And while many of the hopes around
these sectors have failed to live up to expectations in previous years – largely due
to ongoing problems around infrastructure
and administration – President Jonathan’s
pro-active approach to reforming public
sector and dealing with corruption is beginning to be seen to have a positive impact.
The country’s leader has already asked
Nigeria’s anti-corruption agency to look
into claims that illegal fuel subsidy payments
are being made, estimated at $6.8bn, while
he is also hoping to drive home reforms in
the domestic electricity supply market – a
key requirement for future growth – by involving private companies to develop the
country’s network.
Importantly, the President has also been
refocusing attempts to deal with the ongoing problems with Islamic fanatics Boko
Haram in the north of the country.
This area has suffered from high unemployment and underdevelopment, leading to
President Jonathan appointing new staff
and adopting a new stance towards reforming the area to reduce social tensions and
improve the local economy. These tactics
are seen as a positive step in moving towards
a more stable political set-up, and helping
to ensure the country’s progressive economic stance remains in place.
A new minimum wage is also being introduced to help the lowest paid sectors of
Nigeria’s workforce. Although this – along
with funds put into failing banks – has
caused inflation concerns, with the figure
expected to remain stubbornly high at
around 9.6-12.7 per cent over the next three
years, the government intends to try to control this through a close focus on monetary
and fiscal policy.
These actions have brought extended international attention to President Jonathan,
who will remain in power until 2015 after
he won the national elections on 16 April
2011, which were widely commended for
their transparency and fairness.
Following that victory, German Chancellor Angela Merkel visited Abuja in
2011 to congratulate Mr Jonathan (becoming the first head of state of a major world
power to visit the country since President
Jonathan’s re-election), and Nigeria’s
leader returned the visit, travelling to
Berlin in April 2012.
The two countries are currently set to inaugurate a bi-national commission which
will strengthen economic, security and
diplomatic ties. There are also hopes that
German companies can increase their investments and involvement in Nigeria’s
liquified natural gas industry, among others. The African country has the world’s
eight-largest reserves, with much of the resource relatively underdeveloped due to a
focus on crude oil production, leaving the
nation keen to involve foreign partners to
develop the industry.
With such relationships abroad, and with
a cohesive and forward-thinking plan of action for the country itself, Nigeria is continuing to attract investment and interest
from companies and leaders based around
the world. Add plans to build and improve
all areas of the country’s economic, political and social spheres, and Nigeria is wellplaced to continue enjoying its prominent
position as Africa’s leading nation.
GLOBUS VISION Albert Buildings, 49 Queen Victoria Street, London EC4N 4SA
Tel: +44 (0) 20 7409 2354 - [email protected], www.globusvision.com
Globus Vision would like to extend a special thank-you to
Mustafa Chike-Obi, Kayode Lambo and C Don Adinuba
PROJECT TEAM:
Irama Vega,Juan Carlos Jover,Nadine Padron,Manuel Ferrero,Fabricio Domingues,
Niall O Maonaigh, Sara Valle, Fernando Mora and Agata Samborska
An independent supplement distributed with the FT Deutschland by Globus Vision who take sole responsibility for its content
2
NIGERIA
Nigeria’s mobilised finance sector is
making massive progress
The nation’s banks
are functioning again
thanks to a highly
comprehensive rescue
package from the
Asset Management
Corporation of
Nigeria (AMCON)
AMCON
completes
deal with
largest
debtor
The Asset Management Corporation
of Nigeria (AMCON) has gone a long
way towards stimulating new growth
in Nigeria’s financial system since it
was established in 2010. Set up by the
Central Bank of Nigeria (CBN) and
the Ministry of Finance, the corporation’s role is to positively assist the
economy by complementing the recapitalisation of affected Nigerian
banks; provide opportunities for banks
to sell off non-performing loans; free
up valuable resources and enable banks
focus on their core activities; and basically, get banks lending again.
Tasked with cleaning up the banks’
balance sheets following a multibilliondollar rescue of eight failing institutions, AMCON absorbed their
non-performing loans, exchanging them
for government-backed bonds. By buying up the bad loans that were crippling
the banks, the corporation has enabled
them to continue doing business and
making new loans to facilitate the running of the economy.
Lamido Sanusi, Governor of the CBN,
has praised AMCON for what it has
achieved so far in its campaign to reduce non-performing loans.
“With AMCON buying up the banks’
toxic assets, the remaining bank debt will
only be between 300 billion and 400 billion naira [$1.89bn-$2.52bn]; this will
reduce the credit crunch in the system
and allow banks to resume their lending roles to the economy,” he says.
Nigeria’s Asset
Management Corporation is shaking
up the financial
sector with its
NPL-restructuring
programme
Thanks to AMCON’s intervention, the Nigerian financial sector is back in business
“We have acquired
approximately
N3.14 trillion-worth
of loans, of which
we have recovered
N600 billion so far.”
Mustafa Chike-Obi,
Managing Director and
CEO of AMCON
“We are very satisfied with progress
so far,” comments AMCON’s CEO
and Managing Director, Mustafa
Chike-Obi. “We have set an ambitious
target for this year in terms of debt
recovery. We have acquired approximately N3.14 trillion-worth of loans
of which we have recovered N600 billion so far.”
Jibril Aku, Managing Director of
Ecobank Nigeria, has also praised the
CBN and the creation of AMCON,
highlighting that the latter “helps resolve the portfolio challenges of the
banks so that they can resume their
business and lend to the sector.”
Alex Otti, Managing Director of
Diamond Bank PLC, further testifies
to AMCON’s success. He says: “The
banking industry cannot be forgotten in this ambitious growth that the
government has set for itself, and AMCON and the CBN have played a key
role in repositioning the industry.”
Nigeria’s banks are queuing up to
praise AMCON for its assistance. The
Managing Director of Afrinvest West
Africa Limited, Ike Chioke, adds:
“AMCON puts banks back on the path
of liquidity to enable them commence
lending.”
“The strong banks probably dipped
in terms of profitability but absolutely
nothing happened to their capital base,”
states Olusegun Agbaje, Managing Director, Guaranty Trust Bank. “The setting up of AMCON has obviously
helped because that allows the banks
to sell off some of their assets.”
Despite AMCON not being equipped
with regulatory powers, the institution has
contributed significantly to improving
AMCON took
banks off life
support
“AMCON’s intervention
saved 90 per cent
of the jobs in the
banking sector.”
“By injecting liquidity
into the banks we
have helped the
banking system so
they can make loans
in the real economy.”
The Asset Management Corporation of Nigeria
(AMCON) frees banks from toxic assets to
boost credit flow into the economy
The global economic crash of 2008 had
a devastating effect on the Nigerian banking industry, leaving it in a critical condition. It became heavily burdened by a
number of problems. The banks were left
with a crippling amount of non-performing loans (NPLs), with the NPL ratio in
a number of banks as high as 60 per cent.
The tumultuous state of the banks
meant that they were reluctant to lend.
As the credit line dried up, Nigeria’s real economy began to suffer greatly. The
stock market declined up to 60 per cent
from its pre-crash highs of early 2008.
The Central Bank of Nigeria (CBN)
had identified that eight of the country’s
banks were in a grave financial condition, and subsequently injected N620
billion ($3.9 billion) in an attempt to
keep them afloat. Confidence in the sector was at an all-time low. These events
marked the all out failure of top-level
management at the banks, leaving the
CBN no choice but to hire interim managers to run them. Due to the loss of
confidence and the global economic
downturn, the foreign credit line was
withdrawn from a number of the country’s banks.
The need for urgent resolution was
clear, leading to President Goodluck
Jonathan, with the assistance of the CBN
and the Ministry of Finance, to establish the Assets Management Corporation of Nigeria (AMCON). The
organisation was the mechanism they envisioned that would take the country’s
banking sector off life support.
Under the successful leadership of
Mustafa Chike-Obi, Managing Director and CEO of AMCON, it has so far
proved to be the principal revitalising
force of the Nigerian banks, and ultimately the country’s economy.
“AMCON has become the best thing
that has happened to Nigeria’s financial economy,” wrote Odilim Enwegbara, an international financial analyst
from Nigeria.
“AMCON’s intervention saved 90
per cent of the jobs in the banking sector,” Mr Chike-Obi states earnestly.
President Jonathan has listed AMCON
amongst his proudest achievements.
However at the beginning, the role
of AMCON was unclear to some in
Nigeria. Mr Chike-Obi recalls: “People thought we came to take over the
banks, not knowing that we intervened
to prevent Nigerian banks from col-
relationships between the private and
the public sectors, and has introduced
more transparency and good governance to the Nigerian financial sector.
“I think the Central Bank does this with
its reform agenda and standards,” says
Mr Chike-Obi. “We have helped free
banks from being undercapitalised –
by injecting liquidity into the banks we
have helped the banking system.
“ANCOM is well-governed and
transparent and it can set an example
to other institutions, not just banks, as
to how a government agency can be run
in a transparent way and with integrity,” he adds.
With the Nigerian banking sector
now back on track there are real growth
opportunities for the sector. AMCON
will continue to strive towards creating
a stable financial sector.
Mustafa Chike-Obi,
Managing Director and
CEO of AMCON
lapsing and helping depositors from
losing their money.” At the time, the
general perception was that depositors’
funds in a number of banks were at risk.
The proof of AMCON’s successful intervention is certainly on paper. By acquiring the Nigerian banks’ NPLS, it
has managed to take 80 per cent of NPLs
out of the system.
“What our banks went through was the
same thing that other banks all over the
world have gone through; it is part of a
cycle. Through more stringent regulatory measures, we are trying to make sure
that the banks’ NPLs do not exceed 5
per cent,” Mr Chike-Obi said in an interview in November 2011. Now most
of the banks are under 5 per cent ratio.
The total assets of banks grew significantly, by 35 per cent between 2009
and 2011.
In a progress report released by President Jonathan’s administration, it states:
“Several banks fell short of the CBN
capital adequacy ratio pre-AMCON.
Following AMCON’s intervention, all
the banks in Nigeria now have positive
capital adequacy ratio…[the] injection
of funds by AMCON into the banks have
improved their liquidity thereby enabling
them to concentrate on their core business of lending.”
Between 2009 and 2011, liquidity
growth was 60 per cent and the banks’
deposit base grew by 26 per cent during
the same period.
Now, confidence in the system has
been restored, and AMCON’s CEO assures that the Nigerian banking sector is
very sound, and adds: “By injecting liquidity into the banks we have helped the
banking system so they can make loans
in the real economy.”
Considering the success story that
AMCON has been, and the praise being heaped upon it, it is ironic that Mr
Chike-Obi’s outright objective is to see
its dissolution. The hope is that one day
there will no longer be a need for it. “I
just want to make sure that it achieves
what it is designed to do and becomes
a smaller part of the Nigerian economy.
I would love to be redundant as quickly as possible,” he says.
The Asset Management Corporation of Nigeria (AMCON) has concluded a deal with its largest
debtor, Zenon Petroleum, to settle a N140 billion ($880 million)
loan. The news has received mixed
reactions from the financial sector because it comes after the publication of a blacklist of AMCON
debtors created by the Central
Bank of Nigeria (CBN). Those
listed are prohibited from receiving further loans from Nigeria’s
banking sector until they settle
with AMCON. Zenon Petroleum
was on the blacklist.
Mustafa Chike-Obi, CEO and
Managing Director of AMCON, explained in a CNBC Africa interview
why Zenon had not been subject to
the rules of others on the blacklist.
He said: “Zenon’s settlement was initiated before the blacklist was created – we have been valuing Zenon’s
assets for six months; this has been
a long process.”
The restructuring of non-performing loans (NPLs) is helping to ensure a more secure financial future
for Nigeria. Those who borrowed
from the banking system and are
not able to repay will not be in a position to receive credit again five or
six years down the line. AMCON
is ensuring that only borrowers with
the ability to repay loans are granted credit in future.
Sale of bridge banks on hold
AMCON has revealed that it is
holding onto its three bridge banks
until it can divest of them while
making a return on its investment.
AMCON stated in November this
year that they were not yet ready to
sell. One option is to list the banks’
shares on the stock exchange. Mr
Chike-Obi predicted that the Nigerian Stock Exchange will reach
40,000 basis points by the end of
2013, and so there will be a possibility of offloading the banks to investors in 2014.
AMCON bought the defunct
Spring Bank Plc, Bank PHB Plc and
Afribank Plc last year after they
failed to meet a deadline to recapitalise – and in doing so injected
N679 billion to raise their capital adequacy ratio to 15 per cent. They
were then renamed Enterprise Bank,
Keystone Bank and Mainstreet
Bank, respectively.
The value of the nationalised
banks is being determined before
AMCON takes any decision on the
best way to privatise them. RenCap
and Citibank have been appointed
to value the three bridge banks and
advise on how maximise their value before disposing of them.
Banks and private equity investors expressed interest in acquiring the nationalised lenders,
but have been slow in moving forward with acquisitions.
NIGERIA
3
4
NIGERIA
“We are determined... to reform
the oil and gas
industry to root
out inefficiency
and corruption.”
Diezani K AlisonMadueke, Minister of
Petroleum Resources
“Much of the
gas discovered in
this country was
found by looking
for oil.”
Chief Tunde J Afolabi,
Founding Managing
Director of Amni
“The growth of
the oil industry
has been quite
phenomenal
over the past
couple of years.”
“There are quite
a lot of new
opportunities
for German
investors in oil
and gas.”
Dahiru Mohammed,
CEO of DAMAGIX
Layi Fatona,
Managing Director
of NDEP
Local businesses take a more active
role in the exploitation of oil and gas
The Nigerian government is committed to a
real social and economic development
through better use of its resources
Since its entry into the Organisation of
Petroleum Exporting Countries (OPEC)
in 1971, Nigeria has emerged as the largest oil producer in Africa. The oil sector
has been the main cause for growth in
the Nigerian economy in recent decades, and still accounts for over 95 per
cent of exports and 40 per cent of state
revenues, according to IMF data.
The seemingly inexhaustible source of
oil in Nigeria was discovered by the British in the middle of the last century in
the Niger Delta. Soon black gold miners
and oil companies came to the region to
exploit Nigeria’s reserves. That translated into benefits for the Nigerian government and work for local communities, but
also tensions and conflicts.
The country has proven oil reserves, expected to reach 40 billion barrels in the
coming years, but it will have to provide
the conditions for new companies to come to participate. In 2011 only three wells
were drilled, compared to 20 during 2005.
Fire, sabotage, mismanagement and
lack of understanding have hindered
the normal operations of the oil companies, who sometimes work at 40 per
cent capacity.
Companies working in the swamps of
the Niger Delta have, in recent years,
increased their production rates steadily; however, they are still far from their
maximum potential. Last year, oil production stood just over 2.5 million barrels per day, significantly lower than
the estimated capacity of 3 million barrels per day.
Something similar happens with Nigeria’s gas reserves, the largest in Africa, which still have not been taken full
advantage of, due to lack of infrastructure. Since there is no channelled area, ma-
ny companies prefer to burn the gas associated with oil extraction rather than
process it.
Currently 75 per cent of the gas emanating from the extraction wells is burned off, with a consequently high
environmental cost. In order to stop
the flaring of gas and at the same time,
tap the unexplored potential of this
energy source, the Nigerian government is making great efforts to promote the construction of pipelines and
encourage the production and use of natural gas in the region.
The measures, which include a series
of tax incentives and regulated facilities
in the state program Petroleum Industry
Bill (PIB), chase streamline oil and gas
exports while providing electricity to the
needy local market.
With this new regulatory framework,
the Nigerian authorities seek to attract investments worth $108 billion between
2012 and 2025. Nevertheless, it is not only the oil and gas sector that stands to benefit; it is expected that proceeds from the
plan will also reach the Nigerian people.
The government is keen to invite local
companies to participate in the oil market. So far, only 5 per cent of the oil extraction is done by Nigerian companies.
Moreover, the federal government, in accordance with the OPEC, aims to supply
national industry with fuel from domestic production, thus cutting out in some
cases, the middle man.
Although Nigeria ranks among the top
ten countries in the world for oil reserves, most crude is exported. Therefore,
Nigeria must create a larger network of
refineries and modernise the existing ones.
The Nigerian National Petroleum Corporation (NNPC) has said that its three
The Armada Perkasa
FPSO, one of Amni’s
major crude oil production, storage and
export facilities
So far, the Nigerian Content
Act, which regulates the oil and
gas market and encourages the
participation of local players,
has attracted over $500 million
in investments for machinery
and equipment
refineries at Port Harcourt, Warri and Kaduna will reach 90 per cent capacity by
December 2013, so they are trying to attract investment to help them increase
their production.
Chinese companies are already taking
advantage of this opportunity, and so far
have started the construction of three new
greenfield refinery projects.
The government’s implementation of
the Nigerian Content Act, which has regulated the oil and gas market since 2009,
has attracted investment worth more than
$500 million for manufacturing machinery and equipment for the industry.
The Minister of Petroleum Resources,
With the proposed
Petroleum Industry
Bill, Nigeria’s government aims to attract
$108 billion in investments in the oil and
gas industry between
2012 and 2015
Nigeria must build
more refineries if it is
to add value to its
production of crude
oil and natural gas at
home for domestic
use
Diezani K Alison-Madueke in a recent
press conference in Yenegoa, the capital
of the region of Bayelsa, reiterated her support for this initiative that promotes public-private initiatives and partnerships
between local and foreign companies in
the hydrocarbon industry.
“Government is committed to this programme and would continue to encourage our partners in the private sector and
international community to support the
implementation, which is not an effort to
drive foreigners out of the industry but a
requirement to develop genuine partnerships between local and foreign companies,” she said.
Creating value in the indigenous
upstream oil and gas sector
Amni Petroleum has shown that an indigenous oil and gas company can survive and prosper
in Nigeria – no mean feat, given the intense competition in this highly lucrative sector
Since its incorporation in 1993, Amni International Petroleum Development Company Ltd has discovered
and developed vast gas reserves,
and has forged strategic partnerships with major players including
Abacan, Total and Afren. The company was originally granted two
five-year Oil Prospecting Licences
(OPLs) which it successfully developed, and has since gone from
strength to strength.
Exploration and drilling activities
began in early 1995, in partnership
with Liberty Technical Services, a
subsidiary company of Abacan Resource Corporation of Canada. Full
production started in December
1996, and during the first year of operation, a total of 6 million barrels
of oil was produced, most of it exported.
As a result of this successful work
programme, the OPLs were convert-
ed into long-term Oil Mining Leases (OMLs) in 1998 and 1999.
As part of an initiative to bring
more accountability to operations
in mid-1998, the partnership between Amni and Abacan was dissolved. Amni assumed sole
operatorship of the concession, but
the company faced enormous challenges, mostly financial, during this
period. However, these hardships
strengthened the company, giving
it the advantage of experience, and
Amni has lived up to the Latin motto “fortitudine vincimus” (through
endurance we conquer).
Today Amni has set new standards for itself, and is determined
more than ever to exceed them.
In 2005, Amni entered into agreements with Canada-based Total
through its subsidiary Total E&P
Nigeria Limited (formerly Elf Petroleum Nigeria Limited), under
which Total acquired a 40 per cent
interest in OMLs 112 and 117. Total relinquished its rights to the crude
oil from the current developed reservoirs in Ima Field effective from
April 2007.
Total subsequently relinquished
both its right to participate in and
any future right of re-entry into the
development of Okoro/ Setu Fields.
This allowed Amni, in March 2006,
to enter into agreements with Afren
Energy Resources, a wholly owned
subsidiary of Afren Plc, for the Okoro/Setu (exclusive area) fields development.
However, Amni still maintains
healthy deals with Total, with whom
they have an agreement for IMA
Gas, by which Amni develops the
gas reserves until production, with
Total then covering costs out of revenues from gas production.
The outlook for 2012 and 2013 is
good, with Amni aiming to have at
least eight producing wells under
full field development – and the
company is, as ever, looking for interesting partnerships. Founding
Managing Director, Chief Tunde J
Afolabi, a professional geologist
with over 30 years experience in the
oil and gas business, says:
“When Amni succeeds, its partners succeed, and vice versa. It is a
symbiotic relationship where one
does not look at the other as a junior or senior partner.
“The fact that we have operated
all over the world with a varied background and the fact that we speak
the language in terms of what it
takes to succeed in business, I think
is something that any company that
is in business and who would like
to partner would find comforting –
they would not be joining with a
novice, and they will succeed.”
5
NIGERIA
Government support for Nigerian companies
The Local Content Act supports growing participation of local companies in the oil sector
With an average oil production of 2.5 million barrels per day and proven reserves of 35
billion barrels, Nigeria is the largest oil producing country in Africa and the 11th largest
worldwide.
The African state is also the fifth largest
crude oil exporter to the US and oil revenues account for more than 90 per cent of its
receipts of foreign currencies. Nevertheless
the contribution of the oil sector to the gross
domestic product (GDP) is still relatively
modest. According to energy reports in 2008,
the oil sector only accounts for 38 per cent
of the national GDP. The reason is the lack
of domestic players in the oil industry because more than 80 per cent of goods and services necessary for oil production come from
abroad.
Furthermore, the Nigerian oil and gas sector
is dominated by multinationals, which handle their projects – on and offshore – with an
army of expatriates. The results are deficits
for the domestic workforce in terms of employment, education and the creation of capacity and usability, which have lead to weak
economic development. The Nigerian govern-
ment has implemented various policies to
support the domestic workforce and infrastructure and usability of a significant part of
economic derivatives from the oil and gas industry to combat these issues.
The Nigerian Content Division is a new department of the Nigerian National Petroleum
Cooperation, which serves as a watchdog for
the compliance with these new guidelines.
Despite some easing of this tense situation,
there was no significant improvement. In 2011
the government decided, under the leadership
of President Goodluck Jonathan, to increase
its efforts to support domestic industry and
passed the Local Content Act.
According to this new legislation local companies have preference for the supply of goods
and services to the oil and gas industry. Companies who want to acquire a licence for oil production in Nigeria have to present a Nigerian
Content Plan. The plan must state how the applicant is going to fulfil the requirements of the
Local Content Act, for example the first consideration of local goods, services and workforce. A licence can only be issued if the Nigerian
Content Monitoring Board, which was foun-
ded specifically for the purpose of monitoring
adherence to the Local Content Act, has approved the aforementioned plan.
The project operator is also obliged to perform research and development programmes
in connection to the projects to support education, research and development in Nigeria.
The Local Content Act marks a welcome progress and will support sustainable development
in Nigeria. The long-term goal of these measures is to elevate Nigeria into the league of
countries with successful Local Content Acts
such as Norway, Brazil and Angola.
NDEP sets an example
of self-sustainability
DAMAGIX, a reference in
local development
Niger Delta Exploration and Production has established itself as a
successful domestic company in Nigeria’s oil sector
The DAMAGIX Group, leading pipe supplier to the Nigerian oil industry,
is campaigning for the support of local businesses
Niger Delta Exploration and Production (NDEP) is a small but successful
company. The enterprise is completely in the hands of Nigerian businessmen and is one of the trailblazers
of Nigeria’s oil industry, which carries hope for the future of the country. Nigeria’s gas and oil production
increased from 28 billion barrels in
1999 to 37 billion barrels in 2011 and
the government has set itself some
ambitious goals in this sector. The
African state is one of the
leading oil producers in the
world and has enormous reserves at its disposal.
Despite these advances, the
Nigerian oil industry is still
dominated by multinational
corporations with 93 per cent
of the daily production still
being carried out by these
companies. Dr Layi Fatona,
Managing Director of NDEP,
is determined to change this
situation: “We need small to
mid-size Nigerian independent players like NDEP. I
think it is a responsibility we
owe to this country. And we
want to do our best.”
The MD of NDEP is optimistic about the future: “I think
the Nigerian independents are
coming up and it is only a matter of time until other domestic companies will
copy our business model.”
One of these players is NDEP, which
has achieved outstanding success with
its young workforce in the last couple
of years. It is the first company in Nigeria to successfully implement a FarmOut Agreement and was able to secure
in 2010 a remarkable increase of 24 per
cent in the level of investment, and 29
per cent in the shareholder’s fund. Although Dr Fatona admits that increasing
production and alleviating oil prices
have contributed to this achievement,
there is little doubt that NDEP has taken charge of its own destiny.
Nigeria is Africa’s largest oil producer and 90 per cent of the country’s
revenues stem from the oil and gas
sector. The growth figures of this industry are phenomenal and the financial opportunities are also enormous
due to low production costs.
Dahiru Mohammed, Managing Director of the DAMAGIX Group, the
leading indigenous pipe supplier to
the Nigerian oil and gas industry, looks
optimistically to the future of local
businesses: “The next five years are
going to be superb for the local industry. There are many companies like
DAMAGIX that have the focus and
the determination to go forward. With
the opportunities now available and
with the Local Content Law in place,
I do not see a limit. Nigerian compa-
“We are very aware and calculating
in our handling of finances, and I believe this is evident when we look at
our cost of investment. We built a 100million-standard-cubic-feet-per-day
gas processing plant for less than $100
million. So, I think it is project delivery and the costs of doing our investment that stand out amongst our
achievements,” he says.
The MD goes on to explain the recipe for success of his company: “We
NDEP built and operates a
mini refinery, the first of its
kind in Nigeria
are very much hands-on. We have a
multi-tasking workforce, and I think
to a large extent our performance will
continue at this rate.”
More proof of the remarkable capability of NDEP and its operating company Niger Delta Petroleum Resources
Ltd (NDPR) is the fact that the firm
recently acquired a licence to operate a mini-refinery. This decision was
initially based purely on self-sustenance because two years ago diesel was
selling at a high price and the compa-
ny was relying on diesel for operating
its machinery. “This was beginning to
adversely affect our business, so we
decided to build ourselves something
that would make us self-sustaining.
We ended up building a very small mini-refinery, which we have operated
for over three months now. It is a very
significant step for our oil industry.”
NDEP is, on average, selling more
than 1 million litres of diesel a month
and produces 1,000 barrels daily, of
which it only uses a quarter for its own demands.
Dr Fatona sees opportunities for cooperation
with German businesses.
“There is still an inadequacy of fabrication yards
in Nigeria with all of the
state of the art tools. One
of the major limitations is
finding adequacy of tooling for the Nigerian
establishment.
“We invest a lot of money — and when I say
‘we’ I am talking about
little companies — in finding the correct power
tools for working. We
spend a lot of money buying equipment. Therefore, we need a lot of ability
to keep that equipment going for as
long as they are designed. Partnerships with German engineering firms
to keep that equipment going is an opportunity that I see right in front of
us, as having big potential.”
The MD is convinced of the enormous potential for partnerships with
German engineering companies. NDEP
has already gained experience with
German enterprises due to its collaboration with KCA Deutag and is very
enthusiastic about that. Dr Fatona adds:
“I believe that one of the best drilling
contractors we have ever had is a German company, KCA Deutag. Nigeria
could do with ten more of these.”
nies are doing very well.”The CEO of
DAMAGIX is also the founding father of the ‘Local Content’ campaign
for the adoption of the Local Content
Act, which raises the minimum of Nigerian participation in the upstream
and downstream oil and gas industries, as well as all support services.
The CEO remembers how before the
Local Content Act was passed, no Nigerian companies were handling projects worth over $2 million – nowadays
local companies handle projects worth
up to $400 million. Increasing local
involvement in the Nigerian economy
is one of the first and most important
steps towards making Nigeria selfsufficient in the coming years, says Mr
Mohammed, and the Act sends a message of confidence to investors.
An independent supplement distributed with the Financial Times Deutschland by Globus Vision who take sole responsibility for its content
DAMAGIX is well on its way to
becoming a major player in the African oil and gas market and the company is planning to build a pipe mill
and a threading plant, for which much
of the funding has come from overseas investors. “We have all the finance we need and about 70 per cent
of the equipment is already here in
the country. It took us about two years to get to this level, but we have
overcome the challenges now,” remarks Mr Mohammed.
Established in 1993, DAMAGIX
Group’s various companies provide line pipes and bends, casings pipes and
tubulars, stainless steel pipes, pilling
sheets and pipes, and pipe line construction services to the Nigerian oil
and gas industry.
6
NIGERIA
Revolutionary PIB bill to become
a reality soon
The Petroleum Industry Bill, set to pass shortly, is a highly anticipated reform to the oil and gas industry
After a long period of stagnancy, the
exciting Petroleum Industry Bill
(PIB) is likely to be passed in Nigeria by the National Assembly and
subsequently converted into law after its recent approval by the country’s Federal Executive Council.
PIB, one of the most anticipated
pieces of legislation in the oil and gas
sector, will call for the restructuring
of the industry itself while also making it more transparent. It is also expected to promote investment
opportunities and employment within the African nation.
PIB, one of the most anticipated
pieces of legislation in the oil and gas
sector, will call for the restructuring
of the industry itself while also making it more transparent. It is also expected to promote investment
opportunities and employment within the African nation. The PIB may
also provide a boost for indigenisation of the oil industry and efforts to
tap unexploited potential in gas.
Tough measures to spur local ownership have been in play since the
1990s, as currently only 5 per cent
of production comes from independent Nigerian firms. This, combined
with an expansion in the use of Nigeria’s gas for domestic electricity generation could bring substantial
benefits to Nigerian citizens.
“The PIB is a law for the overall
benefit of all Nigerians to allow investors to come into the country and
invest,” says Rotimi Amaechi, Governor of Rivers State and a staunch
supporter of the bill. “If we don’t
“I believe the government has the best intentions with it, so
something has to be
done.The PIB will be a
turnaround for our
goals.”
Adams C. Okoene, Managing
Director of Midwestern Oil &
Gas Company Plc
The Nigerian National Petroleum Corporation is set to be divided into various entities by the PIB
enact a law that would attract investors, then we can’t make
progress.”
For Dr Layi Fatona, Managing Director of Niger Delta Exploration
and Production (NDEP), the bill is
long overdue. “We are all hungry for
it,” he says. “The industry deserves
it. The Nigerian Petroleum act is old
and it deserves to be revised, and in
particular it is gong to be revised.”
Nevertheless, there has been some
opposition from the international oil
companies (IOCs) already operating
in the country such as ExxonMobil,
that believe the legislation would put
too much power in the hands of the
federal government. These multinational companies think that there is
a disconnect between the private sector operators in the oil and gas industry and the plans by the federal
government to use the Petroleum Industry Bill (PIB). According to them,
there is need to fine-tune the bill currently before the legislature.
Nigerian officials counter that PIB
is as fair for Nigerian people as it is
for the IOCs and the government.
Amaechi also expresses confidence
that this bill will indeed lay the necessary groundwork for attracting international investors to the
developing industry. Investments are
currently at somewhat of a standstill
as business entities wait anxiously to
see the definitive clauses of the PIB,
expected to benefit both Nigerians
and create a favourable environment
for foreign investors.
NDEP’s Dr Fatona states that the
PIB will in fact be a product of the
input from all interested parties.
“Everybody needs to come and an environment has to be created where
there is very genuine and very deep
conversation. And it’s not going to
be between government and the IOCs.
It’s going to be between government,
IOCs, civil liberty organisations and
regulatory agencies. Everybody is a
stakeholder in the Nigerian petroleum industry. The state of Nigeria
needs a PIB,” he reiterates.
For Adams C. Okoene, Managing
Director of Midwestern Oil & Gas
Company Plc, the PIB represents
new and better opportunities for
Nigeria’s energy sector. “I believe
the government has the best intentions with it, so something has to be
done. The PIB will be a turnaround
for our goals,” he says.
Besides this restructuring of the
industry, one of the most noteworthy components of the proposed bill
is the division of the Nigerian National Petroleum Corporation
(NNPC) into various entities. This
will create a new national oil company, assembled as an independent
and registered organisation, which
will take over the responsibilities related to the infrastructure of the gas
and oil industry.
One of the other organisations created by the bill is a national frontier
exploration service, to be focused on
actively driving data acquisition, an
essential component to the continual advancement of the oil and gas industry within Nigeria. President
Goodluck Jonathan has expressed
his confidence that PIB will bring
much needed professionalism and
transformation to the sector.
7
NIGERIA
Seas to diversify economy
The maritime sector has become one of the priorities of President Goodluck Jonathan’s
government in its race towards economic diversification
In early November, the partial privatisation of the Nigerian Navy-owned shipyards in Lagos was introduced. The move
comes from the commitment of President Goodluck Jonathan to fully develop the country’s maritime industry, which
is deeply attached to the oil and gas sector, making them two of the country’s most
prominent sectors. “The maritime industry has helped to enhance Nigeria’s position as a regional leader in several areas
because it is a major engine of national
growth,” says the President.
Indeed, according to Ify Anazonwu-Akerele, Director General of the Nigerian
Chamber of Shipping (NCS), 95 per cent
of activities in Nigeria involve the maritime sector. She says, “The maritime industry is only just waking up to the fact
that it is a tangible part of national development and crucial to economic growth.”
Admiral Mohammed, military ship-
yard Superintendent in Lagos, ratified the
privatisation agreement at the opening
ceremony of the Oyot oil platform, which
was built by the Nigerian National Petroleum Corporation (NNPC) and the Mobil Producing Nigeria (MPN).
He particularly stressed that the construction of the platform is the clear consequence of the synergy that exists
between the dockyard, so far having been
exclusively for military use, and the maritime industry. At the same time, he recalled the engineering company Dorman
Long, which had asked the Nigerian Navy
if the company could lease a space in the
yard. That began the process of partial privatisation that had been suggested by
President Jonathan.
Meanwhile, Rear Admiral Ameen Ikioda, who represented the Chief of Naval
Staff at the opening event, said the military shipyards were in charge of all of the
process and construction logistics, as well
as the commissioning of the rig. This has
been a landmark in Nigeria, not only for
the navy, but for the entire maritime industry; not excluding fishing.
That synergy alluded to by the heads
of the Nigerian Navy may well give an
idea of what was said by the Executive
Vice-President of Dorman Long Engineering Limited, Henry Chukwuma Okolo,
who, in addition, welcomed the results obtained by the partial privatisation of the
military shipyards.
He urged the federal government to
extend the boundaries of the local content policy to also cover strategic sectors
such as energy and telecommunications
infrastructure, since the policy pursued by
President Jonathan has allowed Nigerian
companies to participate much more actively than before in the sectors of gas and
oil, two of the great natural resources of
Safe traffic in the ports
The Nigerian Ports Authority is working to upgrade port infrastructure, expand facilities and improve security
The total number of ocean going vessels
completed and the total gross tonnage of
these vessels both increased from 2010 to
2011, by 7.35 per cent and 13.08 per cent,
respectively, according to data from the
Nigerian Ports Authority (NPA). Over the
same period, the number of coastal vessels that called at Nigerian ports rose by
10.69 per cent, while their gross tonnage
surged by an impressive 24.2 per cent. All
in all, 2011 was a good year for traffic at
Nigerian ports; however, the statistics are
also making the need for the ports’ upgrades
and extensions more evident than ever.
The NPA’s former Managing Director,
Omar Suleiman, said that the NPA is committed to enlarging the ports’ installations,
as they are key to Nigeria’s economic
growth. “As you know, in terms of shipping or the maritime industry, whoever controls the sea controls the economy of that
particular area. So, one of the most important key economic drivers for any country is the sea, which translates into ports.
Over 90 per cent of the cargo is carried
by sea. It goes without saying that once
you have a good maritime industry, which
is what NPA is trying to achieve now,
you will be able to employ a great deal of
people, increase commerce and business.
And in fact, contribute to a high national
GDP,” he explained.
Consequently, the NPA would like to
transform Nigeria into a regional shipping hub. “One of the key targets is to make
Nigeria the maritime hub of Western and
Central Africa. The analysis is simple;
our neighboring countries are the Guinean
Republic, Togo, Ghana, Cameroon and
Senegal. If you add the total population
of these countries, it does not add up to
half of Nigeria’s population. So, there is
great potential,” said Mr Suleiman.
First, however, he urged that Nigeria
needs the scale and the kind of facilties
and state-of-the-art infrastructure that will
Omar Suleiman,
former Managing Director of
Nigerian Ports Authority
attract the shipping world. “We need ports
that can accommodate vessels up to 15 meters; carrying over 10,000 TEUs (Twenty-Foot Equivalent Units); we need to
develop and deepen our ports in order to
gain the economy of scale that is required.
This would attract ships to sail directly from
China or America to our port, as opposed
to today,” said the former Managing Director.
This is not to say that the NPA has been
idle over the years. Indeed, they have
dredged channels up to 13 metres, thereby raising the cargoes vessels could carry into the ports from 1,000 TEUs to 4,500
TEUs.
Mr Suleiman said that work isn’t limited to just the ports, either. The NPA is
“also working with the current government
on the railway works. By the time NPA
gets the railway works from the ports, it’ll
be easier for the vessel owners with car-
go from the Niger Republic or Chad, which
are inland countries, to leave it in Nigeria, instead of leaving 90 per cent in Nigeria and going to another port to drop off
the balance,” he explained.
The NPA is currently looking at four
ports, two of which are already under development: Lekki Port and Akwa Ibom.
Mr Suleiman said that work on a third port,
Badagry Port, is about to commence. “The
first vessels to come to Nigeria during the
slave trade were anchored in Badagry,
and this was not by mistake. The reason
was that along this channel, Badagry has
one of the deepest points, and its current
is also friendly.
The fourth port, at Olokola, is designated to be used mainly for oil and gas.
Mr Suleiman is confident that Nigeria will soon enough become the country that will capture the majority of traffic
headed to Africa, and become a distributor. “Over 60 per cent of the cargo will
be consumed by Nigerians. We will distribute the remaining 40 per cent, which
is easier than berthing in Angola and distributing 60 per cent to Nigeria. It entails double handling, double shipping
which increases the shipping costs of the
cargo,” he claimed, adding that what
had hindered this transformation before
was not just poor infrastructure, but security as well, which has driven up costs
such as vessel insurance, for example.
“Security is a challenge but we partner with our sister NIMASA (Nigeria
Maritime Administration and Safety
Agency) as well as the Navy, and many
things have been done in this regard. In
the recent past the piracy issue has seriously gone down. Earlier we would report 5 or 6 piracy incidents in our security
meetings; but recently they are only 1
or 2; and an entire month can go by
without an incident,” Mr Suleiman concluded.
Nigeria. With the advance of the shipping
industry, expectations will be greatly improved as far as exports are concerned.
According to Ms Anazonwu-Akerele,
the Nigerian Local Content Act gives indigenous operators “first choice refusal”
by “compelling the big oil companies to
engage the services of Nigerians.” The
Nigerian Chamber of Shipping “facilitates partnerships between foreigners
and credible Nigerians. To ensure we
have credible practitioners, the Chamber runs training courses, relevant publications, interactive sessions, all geared
towards raising the level of awareness
and establishing best practices,” she adds.
President Jonathan has recently insisted on the need to encourage local investment in all sectors of the country, and
commended the Nigerian Army and his
Chief of Staff, Vice-Admiral Ola Saad
Ibrahim, for their efforts to protect the
sea lanes and waterways of the nation,
which will benefit the oil and gas industry, as well as the import and export
process.
Transport Minister Senator Idris Umar
highlights the potential of the maritime
industry, saying: “It is important to note
that the maritime sector of Nigeria, with
over 84,000 square nautical miles, is
central to the nation’s economy as a veritable medium of transportation, global
commerce, resource exploitation and
recreation.”
The push to enhance the sector opens
the way for a variety of potential partnerships. For example, the Nigerian Port
Authority (NPA) intends to use the Port
of Hamburg as a role model of port development and sees German companies
as points of reference in construction
and engineering. The NPA has also identified German excellence in technology
as an area where the two countries could
partner and gain mutual benefit.
Revenues from the shipping industry are second only to oil and gas
8
NIGERIA
A push for safety at sea and
German expertise
NIMASA is committed to the enthronement of best practices in the provision of maritime services
Ziakede Patrick
Akpobolokemi, General
Director and CEO of NIMASA
“There is no shipping environment in
the world that is more attractive than
Nigeria,” claims Ziakede Patrick
Akpobolokemi, General Director and
CEO of the Nigerian Maritime Administration & Safety Agency
(NIMASA).
“In the maritime sector, we have
not even scratched the surface in terms
of potential. We need countries like
Germany to come in and partner with
our government and institutions like
NIMASA.”
Indeed, anyone interested transforming Nigeria into a prominent
maritime nation should put their faith
in NIMASA, an entity formed in 2006
with the mandate to achieve safe, secure shipping, cleaner oceans and enhanced maritime capacity. The
agency’s overall goal is to prioritise
Nigeria’s place at the top of the mar-
itime agenda, and its forward-thinking nature certainly helps give
NIMASA the edge.
This is typified by the Nigerian Seafarers Development Programme
(NSDP) that it launched in 2008 to encourage young Nigerians to embark on
maritime careers. In 2012, the number
of beneficiaries on the NSDP has significantly increased and Mr Akpobolokemi says that the whole area of manpower
development has been one of the most
important areas of the agency’s transformation during his tenure. He also invites
the private sector to take on a greater role
in stepping up the sector, which in turn
will lead to greater well-being for the local communities.
“We would like to see the private sector participate in the building of shipyards and training of seafarers. These
are short-term objectives in which we
are engaging the National Assembly
to make the appropriate approvals.
We’re discussing how to partner with
different stakeholders, so the shipping
industry must be open for transformation and employment generation, and
peace in the sub-region,” says Mr
Akpobolokemi.
Nigeria’s potential in shipping is so
great that he forecasts that Nigeria will
become a shipping hub in Africa in the
near future. And what the CEO envisions for the coming five years is a
“radically transformed shipping sector that is going to generate thousands
of jobs, open up the industry and build
indigenous capacity.”
His invitation to the German business community to lend expertise is
largely based on the fact that the current number of shipyards doesn’t even
account for 5 per cent of the demand.
Nigeria’s maritime capacity is on the rise
“NIMASA can provide a practical enabling environment for business to
come,” he urges, adding, “The market
is really here, from electronic systems
to shipbuilding, there are many untapped opportunities.”
This openness and zeal for shipping
has only come about during the current administration. Mr Akpobolokemi remembers how little priority was
given to the industry and even the na-
tional shipping line was liquidated.
“But we’re finally getting back on
track,” he remarks. “This government
is hugely passionate about the shipping
industry and is regularly in contact
with us about different opportunities,
which was not the case in the past. The
government is integrating the shipping
industry’s opportunities into its transformation agenda, believing that the industry should be opened up.”
IMAPSOL focuses on human
capital development
Local shippers seek
international alliances
For one of Nigeria’s leading shipping services companies, training is key,
as are the expansion of port facilities and improved access to funding
Isaac Jolapamo, President of ISAN, highlights the need for more
technical assistance and financing from abroad
Integrated Marine and Petroleum Services (IMAPSOL), a 100 per cent
Nigerian company with a global presence, is key to developing human
capital in Nigeria. “We send our employees to conduct training programmes in business and marketing
to become the best-certified inspectors in industry development,” says
Stanley Okafor, CEO of IMAPSOL.
This commitment to its employees is
one of the leitmotifs of the company in all areas of its portfolio.
The company, which began operations in 2005, initially focused its
activities on the inspection of cargo,
and then expanded its transportation
services. “We provide comprehensive
reports from the initial stage of the
cargo to the point of discharge in order to reduce the cost and analysing
the quality of the vessel, abiding with
international standards and all requirements set by the Nigerian institutions like NIMASA,” explains Mr
Okafor.
Having worked with international
oil companies, such as Total, IMAPSOL has a proven track record that
allows it to pick and choose its partners with care. He explains: “After
checking the financial capability and
track record we seek in a partner that
they are reliable and have integrity.
Integrity and transparency is crucial
for us.”
For the IMAPSOL CEO, the Nigerian maritime industry is booming and
plays a key role in the country’s economy, yet faces major challenges, such
The Indigenous Shipowner’s Association of Nigeria (ISAN) wants its
country to be in receipt of the knowhow of western powers in order to become a major regional hub of the port
industry.
“If we could have joint ventures for
shipyard construction and shipbuilding
yards, and joint ownerships rather than
what we have now, it would be good,”
says Isaac Jolapamo, President of ISAN.
Thus the leader of this important
local association wishes to invite foreign investors to enter the Nigerian
shipping market. ISAN, which is responsible for promoting and regulating the business of property and
shipping arrangements as well as creating employment opportunities for
Nigerian sailors, is aware of the potential of the country, but also the
shortcomings that still show the sector in the Nigerian market.
With a coastline of 850km, the maritime industry in Nigeria is an absolute
priority in governmental strategy.
Its privileged geographical position
means Nigeria has high potential in
this sector. It can serve as a hub for
central and eastern Africa, allowing
big companies to tie up and enjoy the
harbour area, and to offer the possibility of local vessels distributing
around the area.
However, Nigeria remains a country heavily dependent on imports and
therefore requires experience, cooperation and technical assistance in the
maritime industry.
“Shipping is standing on the tripod,”
IMAPSOL specialises in cargo inspection and transport
as the expansion of its ports. “We
want big types of vessels coming to
our ports that can carry big loads.
There is a restriction of big cargo
vessels to Nigeria because of the lack
of deep-sea ports, and therefore, I
believe that this is one of the main
areas that need to be addressed,” he
comments, adding that local shipping companies also require improved access to funding – as well
as lower interest rates – in order to
upgrade their fleets.
“We need the Government to assist us if we want a new vessel and
help notable shipping companies like
ourselves negotiate loans with banks
or create a fund for shipping so that
we can benefit from it and have our
own indigenous vessels. They should
promote shipping companies acquiring new vessels instead of using vessels that are 40 years old and are not
safe,” he remarks.
Yet another improvement Mr
Okafor proposes is a reduction of
bureaucracy. “Another important
thing to do is to join the different
agencies that are in the ports together in order to stimulate more cargos
coming in and remove the red tape
that the different agencies who operate in the ports facilities create,
since they all have similar duties.
This would make life easier for the
stakeholders of the industry.”
ISAN promotes and regulates ship ownership and management
says Mr Jolapamo. “You must have a
job to do, which we have here. You must
have funds and you must have the
know-how. We are not well off in two
areas, namely foreign finance and technical support. We do not have enough
schools that train manpower and we do
not have ships. Those are the areas
where we believe there is room for collaboration, cooperation and assistance
from the western world.”
One of the regulations of the Nigerian maritime industry is The Cabotage Act, which was designed to
protect shareholders and local
builders. This law creates a situation
ideal for the development of partnerships with international companies,
with vast experience and resources.
“We know the high standards of their
equipment in general. So the area of
assistance is enormous,” says Mr Jolapamo, who lists the possibilities in
gas projects, construction of oil tankers,
ship management, amongst others.
With increasing involvement of local ship owners in Nigeria should come
an ever-improving business climate.
Therefore, Mr Jolapamo invites German investors to participate in the industry’s projects. “Our country has a
lot of potential. We would ask the Germans to come and support. We know
of their technological advancements,
and we can tap into it for the benefit of
both countries.”
9
NIGERIA
Power sector reform: a paradigm shift
Nigeria is establishing a more efficient energy network through the construction of 11 new power plants
For Nigeria to achieve its goal of becoming one of the world’s top 20
economies in the year 2020 one of the
most crucial requirements is an adequate, affordable and efficient supply of electricity – something it
conspicuously lacks at present.
Energy generation has failed to
keep pace with the energy needs of
the country, with the power sector
producing less than 5,000MW of electricity against an estimated need of
about 30,000MW.
Given major reserves of oil and
gas, abundant sunlight and significant
hydropower potential, Nigeria is well
provided with the natural resources
it needs to fuel its economy and the
homes of its citizens.
Yet Nigeria only generates a tenth
of the amount of electricity produced
by South Africa for a population three
times the size, and almost 70 per cent
of the population do not have access
to the national power grid.
Underinvestment and failure over
the years to formulate a consistent
energy policy has left the power
sector in a state of near collapse.
All too often, power cuts leave
Nigerian businesses in the dark, resulting in lost production, damaged
equipment, and the need for expensive stand-by power.
President Goodluck Jonathan has
put reform of the sector high on the
Federal Government’s agenda, and
initiated a multibillion-dollar plan to
develop electricity infrastructure.
Jonathan himself chairs the Presidential Action Committee on Power
(PACP), and has launched a roadmap
for the reform of the power sector
targeting 40,000MW of electricity
generation capacity by 2020.
So far some $8 billion has been
spent on the National Integrated Pow-
Nigeria is working to improve citizens’ access to the national power grid
er Project (NIPP), originally conceived under the former President
Olusegun Obasanjo in 2004.
Eleven new power plants are being built that will add 5,500MW to
the national grid. Around 4,000 kilometres of transmission lines are being constructed with associated
substations. Existing substations and
transmission lines are being expanded, and hundreds of substations built
in cities across the nation.
Privatisation of the power sector,
which will enable much needed investment, is at an advanced stage,
with the government selling off staterun generation and distribution firms,
and transmission concessions (CHK)
to private companies.
As things stand, the only way Nigeria can add additional capacity to the
national grid is by utilising flared
natural gas. Providing the new power plants with the gas to fuel them is
a major challenge, although gas
pipelines are included in the NIPP and
progress is being made.
However, the Nigerian government also recognises that the country could also be making use of
another major resource as fuel for
its power plants – coal. More than
90 per cent of Nigeria’s power is
generated using oil and gas, less than
10 per cent by using hydropower,
and none at all from coal.
The government wants to diversify power generation, and coal provides an opportunity. Nigeria has vast
unutilised coal deposits spread across
15 states. The government is seeking
to revitalise the coal mining industry by encouraging private companies to develop these resources and
construct coal-fired generating plants.
“Power from coal-fired plants will
start coming in three years’ time, and
power from hydro in five to six years’
time. This is how we intend to expand,” says Barth Nnaji, who recently stood down as Minister of Power.
In July, Chinese firm Sepco III
and its technical partner, Pacific
Holding, announced plans to construct a 1,200MW coal power plant
in Benue State, at an estimated cost
of $4 billion.
Nigerian Electricity Regulatory
Commission (NERC) recently authorised state and local governments,
as well as communities in the country, to generate and distribute their
own electricity.
Rivers State government has announced a $190 million investment
plan to generate and distribute electricity.
Meanwhile, Bauchi state government is turning to solar power, constructing a 30MW solar plant in
collaboration with a German company, Siemens Nigeria Limited Project. The project, which will make
Bauchi one of the first states in the
country to be self-sufficient in electricity supply, is believed to be the
first of its kind in the West-Africa
region, and is one of the first fruits
of an energy partnership between
Germany and Nigeria.
Nuclear power is another option.
The national nuclear power programme is said to have reached an
Renewable energies as the new
fuel for Nigeria’s growth
Around 60 per cent of Nigerians are
not connected to the electrical grid,
while the rest have a rather unreliable supply. Could renewable energies be the solution to this dilemma?
A 2011 report by the World Trade Organisation, called Trade Policy Review, points out that electricity
generation dropped from 4,200 MW
in 2003 to just 1,954MW in 2008,
then bounced back to 2,900MW the
following year. “This implies that
electricity generated fell by over 100
per cent within six years,” the report
explains.
Decades of inadequate policies,
from an energy point of view, are responsible for this poor situation, although has become apparent that
currently, Nigeria is simply not capable of guaranteeing the power it
needs for its 170 million inhabitants.
According to the Trade Policy Review: “The electricity sub-sector is
very critical to the socio-economy
development because of its strong
linkages to all the sectors of the economy. Despite the importance of the
energy sector, particularly the electricity sub-sector to the development
of a nation, the performance of the
sector in Nigeria has been below expectation.”
The report goes on to say: “The oil
and gas sector has been performing
below the average growth rate for
the economy as a whole.”
Continued on page 10
advanced stage, with nuclear power
plants planned for locations in Lagos, Ondo, Cross River and
Adamawa states.
Nigeria and Russia have begun implementation of a nuclear power generation agreement, signed in 2009,
“At our current
rate of power
development,
through the full
implementation of
the roadmap,
we plan to meet
these targets by
the year 2020.”
Goodluck Johnathan,
President of Nigeria
to facilitate cooperation on the development of nuclear energy.
President Jonathan says Nigeria is
fully committed to achieving UN
sustainable energy targets by 2020.
Launching an initiative in Abuja recently, he said there were “limitless
opportunities” in renewable energy.
According to the President, “Bearing
this in mind, we have set national
goals and developed a power sector
roadmap that will fast track our realisation of the UN targets. At our current rate of power development,
through the full implementation of the
roadmap, we plan to meet these targets by the year 2020.”
10
NIGERIA
Egbin Power Station:
New reforms in the
committed to energy and electricity sector
the future
Nigeria needs foreign capital to further power growth
The power plant offers people of the country a way out of the crisis
Nigeria, December 14 2011: The
biggest and oldest power station of
Nigeria, Egbin Power Station, is at a
standstill, even though the country
lacks 1,080 additional megawatts in
electricity, a high official of the Holding Company of Nigeria (PHCN) points
out. The hydro-components of the power station that produces electricity on
the basis of water power have been
failing because of an inadequate maintenance and the plant has therefore
been switched off.
Nigeria, December 19 2011: Mike
Uzoigwe, General Manager of Egbin
Power Station in Ikorodu (Lagos State)
states that the plant is working again
at full capacity. Both succinct notifications describe five days of great stress
for the general manager. He is responsible for about a quarter of the power
that is generated in Nigeria at the Egbin Power Station. The standstill pointed out the importance of electricity
generation for Lagos’ 10 million citizens. A relapse into the times where the
national electricity provider known as
the National Electric Power Authority
(NEPA) was mocked by the people as
“Never Expect Power Anytime” is unlikely nowadays.
“The power sector is vital,” says Mr
Uzoigwe. “Once we get this right, everything else will fall into place.”
What he dubs “everything else” is an
ambitious programme called Vision
20:2020, which foresees the consolidation of Nigeria as one of the 20 biggest
economies in the world by 2020. This
means a race for the country to move
from its current position, 30th, (according to its GDP) into the top 20. Further-
Mike Uzoigwe, General
Manager of Egbin Power
Station
more, a 50-year oil boom has not managed to free half of the Nigerian people from poverty. For the oil specialist
Mr Uzoigwe, this path of development
is partly a question of technology: “We
need people that have the knowledge,”
he says. “They have to be up-to-date with
international energy issues and at the
same time be able to adapt to the most
diverse conditions.”
Until the arrival of the present government, Nigeria never had a sustainable strategy for its development.
Whatever the energy sector developed, it failed when it came down to
putting it into practice. For the energy sector this meant that the tenfold
increase in power generation to about
40,000MW was only possible if the
state – which at that point was almost
the sole owner of the power production – opened up to private investors.
The liberalisation of the economy is
moving forward slowly, though an attempt to reduce administrative structures
has been made. In the case of Egbin an
ambitious renovation programme has
been undertaken, Mr Uzoigwe explains.
“We have reached our limits and then
all of a sudden everything started to
move forward”.
There are still people that fear the
privatisation, he adds, “because they
don’t understand. We have to explain
it to them.”
Once the energy supply has been
stabilised, small businesses would be
able to produce all kinds of products
that at present are being imported and,
instead, export them. “With stable electricity, we would encourage smallscale entrepreneurs to invest in different
industries and sell them to the local market. We wouldn’t have to import as
many products,” explains Egbin’s General Manager.
In regard to religiously motivated
violence in a country with around
170 million inhabitants and more than
500 different languages, he says: “The
pockets of unrest will eventually die
down. There will be a shift of perception. People will realise the benefits of
doing things the right way, and be keen
to be one of the best. Those involved
in minor uprisings will soon realise
that there is life for them out there.”
Though risks always lurk everywhere,
“we have a market here,” says Mr
Uzoigwe. “What we need is financing,
to get it going. Once it is liberalised, the
investors will come as well. And then
there will be no more barriers. The sky
is the limit,” he concludes.
Nigeria is one of the African countries with excellent growth prospects.
Foreign trade plays an important role in the Nigerian economy. Although
oil and gas still predominate the export structure, according to the World
Trade Organisation (WTO), for further growth the Nigerian economy
needs energy.
The federal government has therefore made significant investments in
the sector since 2010 in collaboration
with the local governments of Nigerian states in order to improve their capacities and to meet the demand for
electricity. In this regard companies like Port Harcourt Electricity Distribution Company (PHDC) play an
important role in Nigeria’s life by serving Nigeria’s industrial South South.
The law that enabled the reform of
the electricity sector consolidated a
regulatory body for this sector: the
National Electricity Regulatory Commission (NERC).
NERC was officially inaugurated
on October 31 2005 and has started
creating the needed structures. Its
main duties include the concession
of licenses and the application of an
economic regulation as well as the
search for technologies. The government proposes a tax exemption period of 10 to 15 years for huge
companies who want to invest in the
country’s electricity sector.
“Distribution companies are strategic to the success of the industry and
power sector reform,” notes PHDC
President Rotimi Onanuga. “Nigeria
is a very great and unique country,
and no other country in the world has
tried what we are doing now. Other
countries have put reforms in place,
but we have leverage, institutional
guarantees, and confidence from in-
Rotimi Onanuga, President of Port Harcourt Electricity
Distribution Company
ternational organisations, so I think
everything is in place.”
In order to raise efficiency in customer services, PHDC has adopted
new technologies.
“We now have what is called an
E-Bill.
From
our
website
www.phed.com.ng, you can log-on
and make your payment. We are making life easier for our customers by
giving them multiple vending options.
Before now, you had to go to a cash
office, and wait in a queue in order to
make your payments. But now we are
trying to make it more friendly and
easy for them. Now you have more
options to do it through the web or at
point of sale,” says Mr Onanuga.
PHDC’s president thinks that the
power sector is going to be the catalyst for development in Nigeria. “Power
is the life force of economic develop-
ment,” assures Mr Onanuga. “What
we are doing now, and the level of
confidence and interest shown, if we
are able to get it right, the next two years will be amazing.”
Companies in the Nigerian electricity sector know that Nigeria has a
great need for foreign capital for its development, especially on a technological basis.
“Germany is a good power to align
with. Germany has the investors and
the industrial base vital to a country
in its infancy state like Nigeria. They
should take advantage of the benefits
afforded to the first entrants and pioneers that enter an emerging market
such as Nigeria. They can come in
now, and be the first entrants,” says
Mr Onanuga. “There is great potential in our population, and now is the
time to come.”
Renewable energies as the new fuel
for Nigeria’s growth
Continued from page 9
The Nigerian government is on a mission to produce 7 per cent of its energy from renewable
sources by the year 2025
Growth of the non-oil sector reached an average of 8.9 per cent between 2005 and 2009, yet energy
production was not able to keep up
with the rising demand that inevitably accompanies economic growth.
For this very reason, there are many proponents – both within Nigeria and globally – of harnessing
alternative energy sources to help
boost production, which in turn could
encourage industrial development
and attract new investment.
Nigeria has what many experts
consider an excessive dependence
on gas-fired power plants, as the
country is rich in this resource. Despite its abundance, however, natural gas has not been able to
contribute to a steady supply of
electricity. In 2011, according to
the federal government, Nigeria became the country in the world with
the biggest gap between energy supply and demand.
Nigeria has plenty of renewable
natural resources for producing energy (solar, biomass, wind, etc.) but
their use has been marginalised. Advocates of alternative energies claim
that now, more than ever, is the time
to consider their exploitation. Indeed,
Nigeria’s energy supply must grow
by at least 8 per cent annually.
A report from the European Commission’s Joint Research Centre
(JRC) on the use of alternative energies in Africa, released earlier this
year, remarks that solar energy production in Africa would be, without
a doubt, higher than in Central
Europe if Africa had at its disposal
the means. The same size field of
photovoltaic panels in Africa would
produce twice the amount of energy
than in Europe.
In Equatorial Africa, the solution
could come at the hands of small hydroelectric plants, says the JRC. They
would have immense potential,
owing to an extensive network of rivers that run year round and to the
fact that the majority of homes are
located along these rivers, rather than
being situated near previously installed electric networks.
In terms of wind energy, its advantage lies in the feasibility of installing generators near those
communities that are far away from
the general electrical grid.
There is still much work to do and
Nigeria faces an enormous task if it
is to reach its targets by 2025.
Nigeria, a ‘key
country’ to ABB
The technologymultinational,ABB,
once again gets
involved in the
energy sector after
a 10-year absence
For 10 years the energy multinational company Asea Brown Boveri
(ABB) hasn’t shown any interest in
Nigeria’s power sector. The Swedish-Swiss company is no longer focused on oil and natural gas in the
West African country. However, Nigeria wants to turn its electricity
sector upside down and ABB wants
to be a key player in that transformation process. According to Adedayo Olowoniyi, General Manager
of ABB Nigeria, the company has
identified Nigeria as a “key country
for growth.”
An important reason for this optimism is the government’s intention
to create a legal framework. The oil
sector, which makes up around 90 per
cent of Nigeria’s exports, will be reorganised under the Petroleum Industry Bill (PIB). There has been a lot
of controversy over the last eight years about the legal framework for
the oil sector. “People have had
enough time to make any necessary
adjustments,” says Mr Olowoniyi.
The most important aspects are
more efficient promotion through liberalisation and access for new investors, better access for the
population and better environmental protection.
If the international players found
a more solid legal framework, they
would have no problems adapting
11
NIGERIA
to more demanding environmental
rules, explains the Mr Olowoniyi.
For example flaring off gas is prohibited in many technologically-advanced countries. “Oil and gas is the
most significant sector in Nigeria,”
Mr Olowoniyi points out. “If you have not developed the value chain,
you will not get the benefit.” That
means the raw materials should be
processed in Nigeria and not abroad. Although the country has been
experiencing an oil boom for almost 50 years, about half of the Nigerian population lives below the
poverty line.
“We export crude oil, and import
back the finished product. At the
end of the day, the finished product
is where you find the main value added,” states the ABB Nigeria General Manager. The new legal
framework will give Nigeria the
chance to slowly work its way up
in order to develop its value chain.
That is what he expects from the new
rules. The first steps towards the
privatisation of the energy sector
are important as this is going to enable direct investment from abroad
in order to overcome the current
bottlenecks.
ABB is preparing itself for the moment when it can increase its capacities. At present, a few dozen
newly-hired employees are being
trained in competence centres in
Egypt, Italy, Germany and Sweden.
There is also a lot of work to do with
its less-qualified workers. “We have equipment that should last 25 years, but after two years it looks as if
it had been used for decades,” says
Mr Olowoniyi, who assures that with
the private sector’s entry, “the training will be there, the operators will
be knowledgeable, they will understand their products and equipment.”
Energy suppliers are catalysts
for Nigeria’s development
Oil exporters in Nigeria find an energy problem in the former state-run electricity-based economy
For years, the emerging Nigeria has
been undergoing a series of reforms,
according to the OECD. The growth
rate is at a robust 7 per cent, impelled
by non-oil-based sectors such as
telecommunications, construction industry, wholesale and retail, hospitality, industry and agriculture.
Since oil was discovered in Nigeria
in 1958, it has made up 90 per cent of
the country’s income from exports, resulting in immense environmental
damage in the Niger Delta region. The
World Bank pointed out that one of the
main hindrances to sustainable development in the country was the lack of
energy infrastructure. Therefore the
sixth most important oil exporter in the
world lagged behind its African neighbours in terms of energy supply. Put
into figures, it takes an average of 260
days for a power connector to be installed, as stated in the Doing Business
Report for 2013. That is twice as long
as the average in South Africa and 2.6
times the average of the OECD.
The country intends to achieve an
average growth rate of at least 6.5 per
cent for the coming years. Energy production is supposed to grow 10 times
in the next five years to 40,000MW.
Bolaji Oyesiku, General Manager of
Ibadan Electricity Distribution Company is one of those committed to
achieve this ambitious goal.
“It means taking a huge step forward,” he says. But it will only be possible with the right infrastructure. “The
amount of energy that we are talking
about could be produced just in Lagos.”
His advice is to build up a liberalised
energy sector and seek help from
abroad, through partnerships with energy suppliers like Ibadan, which took
Ibadan Electricity Distribution Co currently produces 250MW
its name from the city of 5 million inhabitants in the southwest of the country. In the city of Ibadan there are food,
cigarette and printing companies. At the
moment the main energy suppliers are
not able to produce electricity at full
capacity due to technical reasons.
That leads to power cuts that drive
up prices and create shortages. Ibadan,
for example, is one of the biggest energy suppliers in the country. At present it produces an average of 250MW,
though its technology enables the company to produce three times as much.
“40,000MW instead
of 4,000MW – it
means that we have
to take a huge step
forward but it will be
possible with the
right infrastructure.”
Bolaji Oyesiku,
General Manager of Ibadan
Electricity Distribution Co
If it is reequipped, it can produce four
times as much or even more. But how
is that achievable? One thing is clear:
alternative energies would not be able
to provide, at this stage, the necessary
amount. At the moment the main bottleneck factor is the lack of employees with specialised skills. Furthermore
the technological impulse has to come
from abroad. Mr Oyesiku explains that
international partners that enter a privatised energy sector are welcome,
should they contribute with ideas and
technology and are therefore able to
drive the whole country forward.
In search of a simplified answer to
the problem, it is important to look at
unconventional solutions as well. For
example, as the banking system of
Nigeria weakens, some Ibadan customers have recently been able to pay
by using a scratch card system. The
cards work in a similar way to mobile
phone cards, where customers can pay
as they go. Those who have problems
paying the monthly electricity bill can
divide the amount. As a result the customer gets less stressed and paying
the bills becomes more affordable. The
company, on the other hand, increases its profits.
The pilot phase has already been a
success and the export of the idea into other regions of the country is likely. The Point of Sale (POS) system,
the energy card and payment through
the internet have become within reach
of the population.
“We are very surprised at the good
results,” Mr Oyesiku says. Having an
open mind to new ideas is what makes
a good manager. “Then it is only about
bringing them to the point. Investors
are invited to try that too.”
12
NIGERIA
Industrial sectors help diversify economy
It’s no secret that Nigeria’s wealth stems mainly from its vast oil and
gas resources, yet the country is making strides in other sectors as
well, including mining and manufacturing
Economic growth, which stood at
6.5 per cent during the third quarter
this year, was driven in large part by
oil but by also activity in the building and construction, cement, hotel and restaurant, and electricity
sectors, according to Nigeria’s National Bureau of Statistics.
Indeed, non-oil growth expanded
7.6 per cent in Q3 2012. In 2011,
however, the non-oil sector saw higher growth of 8.8 per cent; the drop
this year is due to the flooding and
insecurity in northern states which
hit the agricultural sector fairly hard.
Nevertheless, the fact that the nonoil growth outpaced overall economic growth is a positive sign that
Nigeria’s diversification efforts are
paying off.
Manufacturing is an important con-
tender in the diversification strategy, and although its contribution to
GDP stands at less than 5 per cent,
it is growing nearly 10 per cent per
year. And with such a wealth of natural resources, it stands to reason that
Nigeria could become a major industrialised nation, capable of serving its own domestic demand as
well as that of its neighbours.
According to a report by the World
Trade Organisation, the country must
update its equipment, lower the cost
of inputs and improve its transport
infrastructure, the energy and water
supply (the cost of energy alone can
chalk up nearly 70 per cent of a manufacturer’s expenditure) and access
to financing, if it is to fulfil its industrial potential.
The strongest subsectors in manu-
facturing are food and beverage,
which comprise 22 per cent of the
sector, cement, household chemicals
and textiles.
In the non-manufacturing sectors,
mining and construction are both areas that, after being long dormant, have revived and are enjoying strong
growth.
Until 1999, mining for minerals
had been all but forgotten, overshadowed by the discovery of petroleum. Thirteen years ago, the
government decided to give mining
new impetus by conceding generous
incentives in order to attract investors and exploration companies. The
effect was almost immediate: from
GDP contribution of just 0.5 per cent
before 1999, the sector grew more
than 7 per cent by 2010, according
Nigeria’s power
industry gets a boost
from various new
industrial parks
Dr Olusegun Aganga,
Minister of Trade and
Investment
to the WTO. A year later, it expanded by 11.48 per cent.
Nigeria’s most mined and marketed minerals today are coal, limestone,
columbite, marble and cassiterite.
As Africa’s second largest economy, it is rather surprising that the
construction sector is not larger than
it is. According to the WTO, its contribution to GDP is only around 2 per
cent (up from 1.69 per cent between
2005 and 2009), despite a housing
and infrastructure deficit. Yet although construction may be slow,
Nigeria’s cement industry is strong,
and local cement producers control
approximately 97 per cent of the domestic market.
Nonetheless, per capita consumption in Nigeria is just 106 kilogrammes (compare with Senegal, where
the per capita figure is 190 kilogrammes).
Nigeria’s industrial output is receiving a boost, thanks to the development of several new industrial parks.
In Lagos State, the Imota Agro-Industrial Park and the Ilara-Igbonla
Agro-Industrial Park are two projects that got under way this year, as
are three new enterprise zones which
will accommodate more than 500
micro and small enterprises. In Delta State, a 1,150-acre virgin plot of
land – which in this region translates into lush forest – has been designated for the construction of Warri
Industrial Park, which is set to be a
world-class business park.
These will complement the already existing aluminium smelters and
oil refineries in the south-east of the
country, a liquefied natural gas facility in Bonny, and south-central
Nigeria’s integrated steel complex.
Nigeria can’t get
enough of Beloxxi
Cream Crackers
Beloxxi’s cream crackers are made to
world-class standards, and the company has
set a standard for Nigerian businesses
looking to expand and develop
It is curious how something as small
as a cracker can rescue a country’s
manufacturing industry, fight unemployment and contribute to socioeconomic development. Yet such is the
case of Beloxxi, producer of one of Nigeria’s favourite healthy snack foods.
Obi Ezeude is the mastermind behind Beloxxi. He created Beloxxi &
Co Ltd in 1994 to import HWA TAI
Cream Crackers from Malaysia, and
in a short time his company had become the single largest importer of
cream crackers. Consequently, it became clear to Mr Ezeude that importing increasing quantities of crackers
to keep up with demand made less
sense than manufacturing a similar
product at home in Nigeria. Plus, a
local business would be a boon to
the local economy, which was in a
poor state.
“I was already thinking of how to
start producing crackers because I
knew I couldn’t do all that I wanted
to do by simply importing, since unemployment rates in Nigeria were
getting out of hand,” he recalls.
When the Nigerian government
banned cracker imports in 2003, Beloxxi’s CEO saw this is as a clear
sign that the time had come for him
to launch his own factory. Despite
the Malaysian company’s insistence on exporting their product into Nigeria illegally through Beloxxi, Mr
Ezeude was firm in his decision and
sought funding. Armed with a $2.2
million loan from the US EXIM
Bank, his company, now called Beloxxi Industries Ltd, commissioned
its maiden cracker factory in Ikeja,
Lagos State, which became operational in 2006.
Nigerians had become accustomed
to high-quality imported cream crackers, and they were in no way disappointed by Beloxxi’s new product.
Obi Ezeude,
President and CEO of
Beloxxi Industries Ltd
“We had vowed that we were not
going to give the Nigerian consumer anything inferior to the foreign
biscuits we marketed,” says Mr
Ezeude.
Beloxxi Cream Crackers’ bright
blue packages sport the Nigerian
flag, along with the phrase: “Proudly Nigerian” – over 80 per cent of
the raw materials used by the company are sourced locally.
Once Beloxxi’s crackers hit the
market in January 2007, they were an
instant success. By February, supply
fell behind demand, and by the end
of the year Mr Ezeude knew that a
larger factory would be necessary.
Thanks to funding from the Central
Bank of Nigeria, Skye Bank and the
Nigeria Export-Import Bank, he was
able to procure a 15-acre greenfield
site on the Agbara Industrial Estate
in Ogun State, and purchase €8 million worth of state-of-the-art equipment from Italy’s Imaforni Int’l SpA,
the world leader in cracker and biscuit manufacturing technology.
Today, Beloxxi is the largest cracker
manufacturer in sub-Saharan Africa.
“Here [in Agbara] we’ve been able to get two lines up and running
and now have the third being prepared for set-up, with a fourth on its
way,” says Mr Ezeude. “As of today,
we have a total valuation on the new
factory of over N9 billion ($56.6
million) and at full capacity we can
make over 1.6 million tons of crackers a year.”
His vision for the company is to
become Nigeria’s premiere cracker
exporter. As of today, Beloxxi exports only to Ghana and has to work
at full capacity to merely keep up
with domestic demand.
“Nowadays, our product is designed for both the local and international markets. Our ingredients come
from the best suppliers I can find.
For example, my glucose comes from
the USA, my butter from South Africa and the oil I use comes from Nigeria,” explains Mr Ezeude.
Not only is Beloxxi’s business a
healthy and highly successful one,
it is also making contributions to
Nigeria’s young population, who
make ideal temporary factory workers. The company, in fact, only hires people who have passed their
Senior School Certificate Exam and
who intend to continue studying. For
Mr Ezeude, factory work is not a
profession, but rather a steppingstone to make and save some money
to go back to school.
“We only employ young workers
who want to study,” says Mr Ezeude. “If you get into a school, college
or university and you work for us
then you still get your salary uninterrupted while you study.”
Beloxxi stands as an excellent
example of Nigeria’s pioneering spirit, and Mr Ezeude believes that with
assistance from foreign partners, his
nation’s industrialisation can really
take off and perhaps one day mirror
the explosion that has already happened in Brazil and China.
13
NIGERIA
Leading export-import
bank targets job creation
and continued growth
A new mindset to paying
taxes spurs huge revenue
boost for Lagos State
The Nigerian Export-Import Bank, NEXIM, is aiming to become
Africa’s most prominent export development bank by 2015
Changing the public’s approach to taxes is in the interest of everyone
When Robert Orya took over the
helm of NEXIM (the Nigerian Export-Import Bank) in 2009, the bank
was struggling under the weight of
a considerable non-performing loans
portfolio, and had strayed from its
original mandate to help support
Nigeria’s non-oil export economy.
This situation came to a head with
a crippling 2009 financial year loss
of N4.2 billion ($26.6 million) for
the bank.
After Mr Orya’s appointment, he
immediately went about streamlining NEXIM’s activities, refocusing
lending on non-oil sectors, implementing new risk management
frameworks and instilling corporate
governance structures throughout
the institution. By the end of 2010,
just a year later, NEXIM was showing profits of more than N216 million and was well on its way to
fulfilling a new mission: to become
the leading export-import bank in
Africa by 2015.
In 2011, NEXIM was able to support exporters only to the tune of
N10.14 billion and to grant riskbearing facilities of N3.34 billion,
while increasing efficiency in facility access. For 2012-2013, Mr Orya
is targeting loans of N50 billion. By
2015, he wants to raise this to N94
billion.
“We were able to turn the bank
around in 16 months. In the two and
a half years I have been here, we
have been able to support exporters
with over N26 billion and also provide mixed bearing facilities of $32
million [N5 billion], which translates into the creation of 14,000 jobs.
So our transformation is completely on track, primarily due to the professional staff we have managed to
bring in, who are highly motivated,
and we are hopeful of becoming the
leading export-import (EXIM) bank
in Africa by 2015,” says the managing director.
Mr Orya adds, “In carrying out
our strategy, we first identified sectors where we believed a lot of jobs
could be generated, as well as trade
exchange, and where we could provide returns to our shareholders (the
Robert Orya, Managing
Director of NEXIM Bank
“What we have done
over the years has had
phenomenal results;
we have opened up
sectors that had no
value-added exports.”
Robert Orya, Managing
Director of NEXIM Bank
Central Bank of Nigeria and the
Ministry of Finance.) This is key in
order to have their support to become the biggest EXIM bank in
Africa. So far, the journey has been
successful, and we have given the
government some proposals that
have been received favourably and
as soon as we get the green light, I
believe we will be able to achieve
great things.”
Through the bank’s Direct Lending Facility (DLF), NEXIM lends
money directly to Nigerian exporters
to help fund their purchases of cap-
ital goods, raw materials, packaging materials and spare parts.The
DLF can also provide financing for
infrastructure as well as the revitalisation and modernisation of exporters’ plants and machinery.
Now back in shape and functioning optimally, NEXIM is set to play
a critical role in the diversification
of Nigeria’s economy.
One of Mr Orya’s main objectives
within the bank’s drive for economic diversification is to deepen subregional trade. To this end, a priority
focus is NEXIM’s $61.5 million
Sealink initiative that targets the creation of a shipping line that will
boost trade within the Economic
Community of West African States
(ECOWAS).
“What we are trying to reverse in
Nigeria is our exporters looking to
the American and European markets
where we cannot necessarily produce competitively. We looked at
the position of Nigeria within
ECOWAS and realised that the combined population was 300 million
people, with Nigeria alone accounting for some 170 million. So why
would our exporters want to go and
compete in a market where they do
not have a competitive advantage
when we have a lot of potential in
this region?” says Mr Orya.
Sealink is expected to boost maritime trade within the economic
community by 300 per cent. The
new shipping company will connect
West and Central African ports with
a fleet of 3,000 to 5,000-tonne ships
that will greatly reduce goods shipment times, in addition to lowering
the cost of business for regional
companies.
“We cannot just hand out loans to
exporters when we know that trade
barriers exist. We need to address
those barriers first. Right now, there
is no efficient transport system to
move goods within the region. There
is no way to deepen trade without efficient cargo vessels. If we do not
step in to address these issues, our
exporters cannot get value for what
they are doing,” concludes the managing director.
History has changed. Lagos is no longer a paradise for tax fugitives. Gone are
the days when the state was completely dependent on raising capital from the
federal coffers. The Nigerian government
has succeeded in establishing a new way
of thinking and generated unprecedented tax receipts. Thanks to the former
executive governor of Lagos State (19992007) Asiwaju Bola Ahmed Tinubu,
since 1999 the state has started to manage its revenues. Reviews have studied the amount of domestic revenue
attainable and resulted in a raft of revised tax administration laws.
In 2005, a changed mindset with regards to the fiscal policy of Nigeria was
established. The figures from 1999
through to today emphasise this development. In 1999, Lagos State generated domestic revenues of N600 million
monthly (nearly $3.8 million); in 2005
the figures reached N3.4 billion monthly and last year it was more than N16.5
billion per month. This spectacular
growth has taken place with the same
legislation and tax customs of previous
years. Merely the political will and social awareness have changed.
The state government began to collect taxes via the Lagos Internal Revenue Service (LIRS) and started to train
qualified personnel in the public and
private sector. “Corporate organisations
knew about the tax laws but the tax administration process under the then Board of Internal Revenue did not really
focus on them. Or, it did not enforce the
payment of taxes,” says Babatunde Fowler, CEO of LIRS. The informal sector
Babatunde Fowler,
CEO of LIRS
further complicated matters because its
members did not know the system and
no records of their activities existed.
“But we now have relationships with all
these different sectors and we have tried
to educate them by, for example, explaining the laws and giving out a lot of
fliers,” says Mr Fowler.
Initially, information was spread and
afterwards access to tax policies was
created. LIRS initiated information flow
for business people and 34 mini stations were set up in Lagos to facilitate the
taxation process. “We go directly into
companies so they do not have to neglect their day-to-day business,” says
Success stories by NEXIM,
Nigeria’s key developer of its
non-oil sector
Since its inception in 1991, NEXIM Bank has provided N63
billion ($40 million) to over 400 projects in the country,
providing companies with affordable finance in order to boost
their export capacity.
Trained to find new potential in the Nigerian economy
and to seek unserved markets, NEXIM has developed new
export segments where previously none existed, such as in
the country’s film industry, Nollywood, as well as in min-
Nigeria’s film industry,nicknamed Nollywood,is second in size only to India’s
ing, agriculture and the hotel industry. Beloxxi, for example, has become Nigeria’s largest biscuit manufacturer with
the help of NEXIM’s guidance and funding.
“Our primary mandate is to regulate and develop nonoil commodities for export. What we have done over the
years has had phenomenal results; we have opened up sectors which had no value-added exports. In the agricultural sector, for instance, some of NEXIM’s greenfield projects
have become so big that they are now listed among the Central Bank’s top 100 exporters,” explains Managing Director Robert Orya.
“Also NEXIM started the country’s first cocoa processing plant, Multi-Trex Integrated Foods, which is today one
of the largest in Africa. The biggest rubber company in Africa,
Pamol Nigeria, is also one of NEXIM’s projects. It currently has an annual turnover exceeding $100 million. So NEXIM has been able to contribute significantly in agriculture.”
Targeting areas traditionally overlooked by commercial
banks in manufacturing, agriculture, solid minerals and
services, NEXIM is first in on the ground, working to increase the sector’s worth until traditional banks are interested in entering. “We go into sectors such as these to
re-package them and make them attractive for commercial
banks and any other private entity that is interested in operating there. A great deal of effort has gone into ensuring
that many companies could be financed by NEXIM, and
we hope to do a lot more in the future,” says Mr Orya.
Other NEXIM success stories include Cibi Nigeria, which
specialises in the polishing of granite and marble, and other manufacturing companies in cement and furniture. NEXIM companies generated foreign exchange earnings of over
$150 million in 2011.
Mr Fowler. “We found that the typical
trader does not want to leave their shop
in case they miss a big customer. So we
moved the stations close to them.” However, in order to enhance transparency, citizens cannot pay taxes in the new
agencies, but must do so by filling out
a simple form at a bank.
In the past couple of years financial
penalties have also been introduced and
consequently the process of tax payments has really started to take off.
LIRS goes beyond educating the public and easing access to tax payments.
The CEO says that their main goal has
been to let everyone who is not registered in the tax system know that they will
be caught. “We have started to persecute tax evaders,” says Mr Fowler. “The
penalties are steep and there are also prison sentences.” To guarantee success,
LIRS cooperates with various institutions, such as the traffic department. “Over
the past couple of years we have been
able to generate about N20 billion yearly from tax audits of organisations that
have not paid the correct amount of taxes,” the CEO adds.
Since the beginning, attempts have
been made to convince the population
that it is in their own best interest to pay
taxes. “A major reason why people would
not pay taxes is they were not sure what
it was being used for. We have made
people in Lagos understand that 65 per
cent of the revenue that is spent in Lagos comes from taxes,” says Mr Fowler, who adds that LIRS is proud to work
under the protection of the law to establish a better Lagos and Nigeria.
14
NIGERIA
Evergreen Apple Nigeria,
flying in style
Even though the aviation sector in Nigeria is going through difficult times, luxury fixed-base
operators like EAN are turning around the concept of air travel in Nigeria and beyond
EAN launched Nigeria’s first private fixed-base operator facility just two minutes from the Murtala Mohammed International Airport
Nigeria’s aviation industry has been
going through difficult times after
the tragic accident that took place
earlier this year. On 3 June 2012, a
Dana Air plane with 153 passengers
on board crashed in one of the most
populated neighbourhoods in Lagos,
with terrible consequences for human lives and infrastructure. And the
day before, a Nigerian plane had a failed landing in Accra, resulting in 10
passenger deaths. These catastrophes
opened a Pandora’s box for the Nigerian aviation industry, which was
harshly criticised for inadequate
safety standards.
Since then, Nigerian airlines have
made great efforts to adapt to international safety standards, limit delays and modernise their fleets. This
movement has been prompted both by
more stringent government regulations and by commercial considerations such as the need to revamp
business. Aviation Minister Princess
Stella Oduah-Ogiemwonyi asked that
all the airlines operating in Nigerian
airspace adhere to the safety measures set by the International Civil Aviation Organisation by December. Those
that do not comply will lose their license. Furthermore, the General Manager of the Civil Aviation Authority,
Dr Harold Demuren, has expressed a
commitment to modernising and personally supervising all the control
towers and radars in the airports.
The sector received a boost in Octo-
“We offer a premium
service to our clients;
when they arrive, there is
somebody there to
meet them and the
planes and crew are
ready. It is seamless,
there is no hassle.”
Segun Demuren, CEO of
Evergreen Apple Nigeria
ber, when Nigeria hosted the sixth
summit of the D-8 Working Group on
Civil Aviation (D-8 WGCA) in Abuja. The Developing-8 or D-8, an organisation comprising some of the
most populous developing countries
in the world – Bangladesh, Pakistan,
Nigeria, Iran, Indonesia, Malaysia,
Egypt and Turkey – is an important
player in the global aviation industry.
The annual meetings of civil aviation representatives in the eight member countries are meant to address the
most pertinent issues related to safety,
security, training, maintenance, airport infrastructure, and leasing, among
others, in order to develop a concrete D-8 cooperation programme in civil aviation.
Despite the recent developments,
there is one sub-sector in Nigerian
aviation which has not only remained unscathed, but has actually expanded: the luxury fixed-base
operators in Nigeria – a dream that
has become reality thanks to Segun
Demuren, CEO of Evergreen Apple
Nigeria (EAN).
Headquartered in Lagos, the company was launched in June 2011, offering the first private flights operated
by a fixed-base operator (FBO) in Nigeria. Its facilities, which include
VIP lounges, ground handling, exclusive hangars, offices and restaurants, and catering for private jets,
set a new standard at the Murtala Mohamed International Airport.
“We offer a premium service to our
clients; when they arrive, there is somebody there to meet them and the
planes and crew are ready. They can
have private meetings – it is seamless,
there is no hassle. Most of them are
usually working, even when they arrive at the facility. Some arrive with
aides. We want to create an environment where as they come in, they already feel comfortable,” explains
EAN’s Segun Demuren.
Moreover, through the exclusive
EAN Club Jet, the company offers
customised services to its clients and
rewards loyalty with points that can
be earned using its platinum and golden club cards. EAN has been so successful that it operated over 1,000
private flights in its first year and
currently accounts for half the traffic at Lagos airport. According to the
CEO, the recipe for success for success is that EAN strives to maintain
a fantastic rapport with clients and to
promote transparency in the management team.
In the near future, EAN is planning
on expanding to other major cities in
Nigeria. In the first stage, it will set
up offices in Abuja, the country’s administrative capital, and later in Port
Harcourt, the energy capital of the
Niger Delta. The expansion will most
likely prove lucrative, as the three
airports – Lagos, Abuja and Port Harcourt – account for 80 per cent of the
aviation business in Nigeria.
Nigeria’s filtration
and logistics
specialist
Advanced International Merchants has carved
out a special niche for itself in the local market
Nigerian-owned Advanced International Merchants Ltd (AIML) began in
1995 as a service provider in raw materials for the brewing industry. However, the company quickly realised it
could capitalise on its expertise in the
field of logistics, and expanded its operations to include the importation of
enzymes, filter aid and filter sheets.
Today, the company has cemented its
status as the first and foremost experienced filtration specialist company in
the country.
Seventeen years into operation,
AIML enjoys continuity and growth in
its business relations and CEO
Nwankwo Cyprian is proud of the
progress the company has made in so
little time.
“Our efficiency, consistency, and
ability to deliver on schedules endeared
us to our various customers,” he says.
“As a result, we are still working with
the same companies and clients today
after many years. We have never lost
a customer or partner. We work with
the biggest names in the industry, and
they know us very well.”
He adds, “Today we represent 13
companies worldwide, with a very cordial relationship existing between us:
Carlson Filtration Limited from the
UK, Kieselmann in Germany, Kerry
Bioscience in Ireland, Geneva-based
Foodin, World Minerals France, USbased Micronics, etc.”
Mr Cyprian says the company, which
Advanced International Merchants Ltd
is Nigeria’s most experienced
specialist filtration
company
is 100 per cent Nigerian and operates
at international standards, is open to new
partnerships. “We can provide an enabling environment and opportunity
for companies who want to come in,
and offer them the expertise and knowhow in the competencies we have here
in Nigeria.”
Potential partners can rest assured that
AIML places great importance on maintaining a high level performance among
its employees. The company invests in
periodic in-house and developmental
external training sessions, and seminars
within the industry, as well as in books,
journals and other literature that aid
learning. AIML also provides educational grants and loans for those who
seek further opportunities for personal development.
As for plans for the future, AIML intends to spread its operations beyond
Nigeria, Ghana and Cameroon and into all of West Africa and part of Central Africa within the next five or six
years. “We have already mapped out
the plans. I am partnering with my associate in Geneva to open an office in
Kenya very soon,” explains the CEO.
At home in Nigeria, the company recently acquired 100 acres of land where
it will concentrate its business. Also,
a CO2 plant is under construction for
the breweries and other food industries. “The newly acquired land will be
a one-stop shop for industrial products
and services,” says Mr Cyprian.
15
NIGERIA
Proudly responding to the needs of the nation
The conglomerate Flour Mills of Nigeria has
increased its capacity to promote agriculture
and development in Nigeria and to support
the government’s economic policy
Incorporated in 1960, a day before
the independence of Nigeria, Flour
Mills of Nigeria Plc has become one
of the largest and most successful industrial conglomerates in the country.
With one of the biggest flour milling
complexes in the world, the company is one of the main food producers
in Nigeria and the first flour manufacturer with a 45 per cent market
share.
As a modern African conglomerate,
the company has grown into a market leader with popular and highly
recognisable brands as well as an extensive distribution network.
Flour Mills has
become a clear
market leader with
an extensive
distribution
network and
brands that have
become household
names in Nigeria.
Investment has been
made in a variety of
projects such as
flour milling, cement,
port infrastructure,
power and other
strategically critical
sectors.
Established under a clear vision, to
serve the needs of the growing Nigerian population, the company has diversified from its core business to new
sectors of the economy. Its activities
currently span flour milling, pasta and
noodles manufacturing, agro-industrial farming, animal feed, edible oils
processing, fertiliser blending, cement
trade and manufacturing, bags and
packaging as well as port terminal operations and transport and logistics.
Flour Mills of Nigeria’s commitment
to developing its business interests reflects its support and confidence in
the growth prospects of the Nigerian
economy.
As part of its business model for
growth, Flour Mills has completed the
investment of N150 billion ($950 million) in order to execute its core strategy. According to Managing Director
Chief (Dr) Emmanuel A. Ukpabi, “The
investment has been made in a variety of projects such as flour milling,
cement, port infrastructure, power and
other strategically critical sectors.”
Dr Ukpabi reiterates the company’s intention to actively support the
government’s policy of backward integration and expand its thriving agroallied holdings, with growing
investments in edible oils and a focus on expanding its successful animal feed business.
In line with this, the company has
concluded agreements for the supply
of a new 500 metric tonnes per day
edible oil extraction and refining facility to be established. The new oil
complex, an investment of N7 billion, would bring additional capacity to the company’s existing edible oil
operations and provide much needed
raw materials for its animal feed
milling. This constituted phase two of
a three-stage investment programme
for the cultivation and extraction of
edible oil from soybean and palm.
The new plants to be commissioned
in this second stage will more than
double extraction capacity to 500 metric tonnes per day of soya and 300
tonnes per day of palm kernel. The
third stage will oversee the establishment of palm plantations to augment
local raw material supplies, and the
establishment of a 750 additional metric tonnes per day multi oil refinery
and margarine packaging plant.
These are just some of the company’s plans for growth and commitment. According to Dr Ukpabi, “Flour
Mills is fully committed to playing a
leading role in ensuring the successful implementation of the country’s
agriculture policy and development”
and has been doing so for the past
half a century.
Flour Mills of Nigeria produces pasta, agricultural vehicles, cooking oil and fodder
Flour Mills produces electricity, owns
a trucking company and a port
Nigeria’s agriculture giant has diversified to different company segments
Flour Mills of Nigeria Plc was built to produce
flour. After Nigeria declared its independence
in 1960 from Great Britain, Flour Mills increased its daily capacity in its Apapa plant in
Lagos tenfold to 6,000 cubic tons. Furthermore,
over the years, Flour Mills has created several
related business segments. Amongst them is its
“golden” trademark of pasta and noodles. Under the trade name Agro-Allied Flour Mills, it
also produces rice and cassava flours, sugar
(Golden Sugar), glucose and cooking oils. Since
1997, under the name Golden Fertilizer Flour
Mills, it has imported and distributed fertiliser
nationwide.
At its two locations in Kajobi and Sunti, Flour
Mills produces corn, soya, rice, cassava, sugar
cane and palms. The soya and corn fodder are
produced by Premier Feed Mills Company Ltd
and are distributed under the trademark Top
Feeds.
Flour Mills is also active in the transport and
infrastructure branches. Burnham Cement imports and distributes cement, which has been already used for the construction of many
buildings, bridges and streets in Nigeria. Flour
Mills owns a cement joint venture with the
Swiss company Holcim and the French firm Lafarge in Mfamosing, in the Cross Rivers State.
It also possesses a trucking company, which
currently has 500 trucks. Golden Transport
Company Ltd has ambitious plans to double its
fleet.
Flour Mills is also present in the shipping
sector. Since 2005 the company has had its own
dockside terminal, known as Apapa Bulk Terminal Ltd (ABTL), for which Flour Mills was
provided with share capital amounting to N1 billion ($635 million). The port is equipped with
several storehouses. As part of its expansion
plans, ABTL is studying to build train access
to the storehouses.
In November Flour Mills was authorised to
take over the majority of Nigerian Bag Manufacturing Company, a sack producer, also known
as Bagco. With its monthly capacity of 32 million sacks and bags, Bagco has become Nigeria’s biggest producer in this area.
Flour Mills has recently penetrated the electricity market. Its mills in Apapa Port have 11
gas-fired generators with a capacity of 30MW.
Flour Mills also has a 30MW diesel-run generator in Apapa just in case the gas generators fail
or have to be disconnected.
According to Flour Mills’ General Manager
Chief Emmanuel A Ukpabi, the company is already producing more electricity than it consumes. Flour Mills plans to introduce the excess
of power capacity into the regular Nigerian electricity supply system and to sell it to municipalities. According to the company’s website,
the different business branches are all “profitable
and give Flour Mills a competitive advantage
in mobility, efficiency and services.”
Doing business with
Flour Mills is ‘doing
the right thing!’
Globus Vision spoke
in Nigeria’s commercial and economic
capital, Lagos, with
Chief Emmanuel A
Ukpabi, Group
Managing Director of
Flour Mills of Nigeria
Plc, the country’s
largest flour producer
How important is the private sector
in helping to achieve the Vision 20:2020
milestone and how achievable is this
target?
It is a very ambitious plan, but I think
with determination, especially from the
government through the transformation
agenda, a lot can be achieved. The transformation agenda focuses on private sec-
tor initiatives, and that is what is happening really. I think the private sector
is key in this transformation and the realisation of the Vision 20:2020.
What steps should be taken in order
to strengthen cooperation between
the government and the private sector in key areas such as agriculture,
energy and infrastructure?
Flour Mills has always believed that
Nigeria is an agricultural country. Even
when many multinationals moved away
from agriculture, Flour Mills remained
in this sector. It is important for the government to engage the private sector. If
you do not engage properly with the
government, you cannot achieve anything. We’ve been doing so on key issues and we think that we should achieve
something for the country.
You plan to invest N150 billion ($950
million) in projects for your core business. What will Flour Mills’ investments mean for the company’s
business?
We need to invest. We are diversified
and we are the leaders when it comes
to flour milling. We started flour milling
50 years ago and there are 22 mills in
Nigeria today. It is important for us to
keep moving.
We want to do a Golden Penny basket where our food products can be found.
We will have rice, sugar and other products. We have a brand for semolina called
Semovita. In Nigeria, everyone calls this
product by the brand name; the brand has
become the generic. Many people do not
even know the name Flour Mills, but
they recognise our brand Golden Penny.
We are engaging in agro-related industries, we believe that with the population we have in Nigeria, around 170
million with a 3 per cent growth, no other industry can provide such employment
for this number of people. So you have
to turn to agriculture – it is the key to
feeding ourselves.
We can add cassava to our bread and
maybe make a Nigerian type of bread.
We can provide employment for young
people in farms by producing cassava,
but we want to be sure that the end product is commercially acceptable and that
ian requirements for fertiliser. Flour
Mills’ products can be found everywhere. Transport and logistics are important as we have to move our products,
but we also know that in order for us
to succeed, infrastructure has to be addressed. I am happy that the government
is focusing on this now, and money
may come from the fuel subsidy removal, and it will be used for infrastructure.
Energy and electricity are very important as far as we are concerned.
Everybody needs electricity, and you
cannot start small and medium-scale
businesses without it. But it is important that the government is also addressing these issues through
deregulation and the unbundling of the
Power Holding Company of Nigeria
(PHCN), which will lead to the private
sector coming in.
Chief Emmanuel A Ukpabi,
Group Managing Director of Flour Mills of Nigeria Plc
the consuming public will continue to
purchase it; we want quality.
What strategies will Flour Mills implement in order to support the government’s agricultural policy and
focus on agriculture? You are currently investing a lot in edible oils.
We’ve recently invested N7 billion.
We know that we also have to grow
palm trees. We are going to acquire
land in Edo State to develop a big palm
oil plantation.
We also went into pasta manufacturing many years back. That was my first
job here; I realised we could make a lot
of money in pasta and we moved to a
new site. Today I think we have the
biggest pasta plant in Africa with 500
tonnes per day, and we are going to
double that. Pasta has been very successful; we have also gone into related business such as noodle manufacturing. It
is coming along very well.
We have the fertiliser business and
we supply almost 40 per cent of Niger-
Do you have a special message for the
readers of the Financial Times
Deutschland?
We have a lot of opportunities in
Flour Mills. We started off with just one
company, and we have diversified into all sorts of things – cement, fertiliser, port operations, noodles, rice, sugar,
oils, etc.
We still need people to partner with
us; we need investors to come so we
can expand, for we always try to be the
largest in the areas we go into. In order to be the largest we need money and
a lot of funding.
Come and see what we are doing and
look at areas that interest you. If you do
business with Flour Mills, you can be
sure that you are doing the right thing!
16
NIGERIA

NIGERIA - Globus Vision

Transcription

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