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LCCI: How Nigeria can be Competitive in AfCFTA

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The Director-General of the Lagos Chamber of Commerce and Industry, Muda Yusuf, has said that for the country to be relevant in the African Continental Free Trade Agreement, it needs to be competitive.

He disclosed this in Lagos on Thursday.

While underscoring the importance of competitiveness in AfCFTA, Yusuf stressed that this is the very foundation of any conversation about trade because those engaging in it, whether within or outside the country, have no sentiment about it.

He argued that if what one is providing is not competitive in price, it is of no relevance because the consumer is not interested in whether it is made-in-Nigeria or not.

“What one is interested in, is how he or she can maximise what we call ‘utility’ in economics, how he can maximise or benefit from the little money he wants to spend. So, that is why the emphasis has to be on how we can make ourselves competitive,” he said.

The LCCI boss recalled that the manufacturing sector kicked against AfCFTA, hence Nigeria was one of the last to ratify the agreement. 

“They have looked at all the things around them and said as far as production is concerned, there is no way they can compete. And you can’t blame them because you are the investor, you have committed capital, you have imported machines, have a lot of assets, many of them immovable and you put all these investments in place based on specific competitiveness assumptions.”

Yusuf, however, added that the parameters for the competitiveness have begun to change.

His words, “You have looked at the market, you have done some competitive analysis and said yes, this investment will fly. Now the assumptions have changed, the competition parameter is now changing; you are now facing new competitors.

Meanwhile, the domestic environment has not changed, your tax environment has not changed, the port environment has not changed, the cost of funds, the regulations, the lending and all of that. The infrastructure issues are still there. So, it is a dangerous challenge.

“We have already ratified and so, hopefully and prayerfully, there will be no going back so that we don’t have the kind of thing we have in Brexit, after UK joined and said it is pulling out. I pray we are not going to get there because a whole lot of countries are much better prepared.

MUDA YUSUF, DG LCCI

“It was because of this preparedness issue in 2018, that the President set up a Readiness and Impact Assessment Committee when the manufacturers  complained to know what exactly was needed to ensure that we are better prepared; to ensure that our stakeholders and investors can be part of this system and also benefit from the continental market.”

Yusuf said although the committee had done its investigations and submitted its report, nothing had changed.

“The committee was set up to look at the readiness issues, the committee submitted its report on readiness issues around the ports, around the aviation, road, power and around all the problems that investors are facing. The report has been submitted, the situation has not changed, nothing is even happening, the situation is even getting worse,” he stressed.

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NIMS 2022: Kitack Lim, IMO Secretary-General, To Visit Nigeria

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Olushola Okunlade Writes

The Nigeria International Maritime Summit (NIMS) has now been confirmed to hold from 21 to 22 November 2022, with the Honourable Minister of Transportation, Mu’azu Jaji Sambo as the Chief Host, and the Secretary-General of the International Maritime Organisation, H.E. Kitack Lim, as the keynote speaker.

A joint statement signed by the Permanent Secretary of the Federal Ministry of Transport, Dr. Magdalene Ajani, and the Chairperson of the event’s Governing Board, Mfon Ekong Usoro, stated that the event will feature government-to-government, government-to-business, and business-to-business exchanges towards increasing investment and efficiency in the Nigerian maritime sector.

The visit by the H.E. Kitack Lim will be the first by an IMO Secretary-General to Nigeria in more than twenty years.

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In 2019, the Southern Swamp Associated Gas Solutions project was commissioned, and the SPDC JV is planning to reduce associated gas flaring further through its Forcados Yokri gas-gathering project, of which large parts are set to be completed in 2022. Despite such efforts to reduce continuous flaring, unfortunately flaring intensity (the amount of gas flared for every tonne of oil and gas produced) at both SPDC- and SNEPCo-operated facilities increased in 2021 owing to short-term operational issues. Flaring from SPDC-operated facilities increased by around 5% in 2021 compared with 2020. The increase was primarily because of the extended outage of the gas compression system in SPDC’s shallow-water operations. The system was restored and became operational from January 2022. Flaring at SNEPCo-operated facilities rose by around 160% in 2021 compared with 2020. This was mainly because of an increase in flaring on the Bonga floating production, storage and offloading (FPSO) vessel. Repairs to a flex-joint on the Bonga FPSO’s gas export riser in the second quarter took longer than expected, in part because of weather conditions. While repairs were under way, the FPSO continued to produce oil and therefore flaring was necessary for safety reasons. The repairs were safely concluded in July 2021. Although flaring intensity levels rose in 2021, SPDC and SNEPCo over the last 10 years have almost halved the combined amount of hydrocarbons they flare from 1.5 million tonnes in 2012 to 0.8 million tonnes in 2021. This reduction is the result of a strict flaring reduction management process and both SPDC and SNEPCo will continue to work in close collaboration with joint-venture partners and the government to make progress towards ending routine flaring of associated gas. NIGERIA LNG EXPANSION UNDERWAY Global demand for LNG continues to grow as the world increasingly seeks reliable supplies of lowercarbon energy. Shell’s investment in Nigeria’s gas infrastructure for export is expected to help 6 This is according to a data provided by global research and consultancy business Wood Mackenzie. the country benefit further from revenues. Shell Gas B.V. and its partners took a final investment decision in 2020 on a new LNG processing unit – known as Train 7 -- at NLNG. The expansion is expected to create around 12,000 jobs for Nigerians during construction and stimulate growth of the local oil and gas service sector, with 55% of engineering and procurement of goods and services being sourced in-country. Train 7 is expected to ensure Nigeria’s continued place as a global player in a lower-carbon energy source. Once operational, Train 7 will add around 8 million tonnes per annum of capacity to the Bonny Island LNG facility, taking the total production to around 30 million tonnes per annum. In 2021, NLNG began awarding procurement and construction contracts. Early works started at the site. The first phase of the worker village is expected to be ready for occupancy in 2022 and the new material offloading facility ready for use by the end of 2022. NLNG’s Train 7 is expected to come onstream in the middle of the 2020s. KEY LICENCE RENEWED FOR DEEP-WATER SNEPCo has interests in four deep-water blocks in the Gulf of Guinea, two of which it operates. Today, nearly one-third of Nigeria’s deep-water oil and gas production comes from the Bonga and the nonoperated Erha fields.6 Since production began in 2005, Bonga alone has produced more than 950 million barrels of oil with the 2021 average oil production per day at 105,000 barrels. The Bonga FPSO vessel has a total production capacity of 225,000 barrels of oil per day and 150 standard cubic feet of gas export per day. In 2021, the availability of the FPSO vessel increased to 80% from 70% in 2020. In addition to Bonga, SNEPCo’s exploration activities have led to several significant discoveries of oil and gas over the last two decades, including the Bolia and Doro fields (Shell interest 55%). Nigeria Briefing Notes Helping to power Nigeria’s economy 13 In the right investment climate, SNEPCo believes that there are opportunities to expand. In 2021 the OML 118 (Bonga) production sharing contract was renewed and the lease extended for 20 years. Bonga North and Bonga South West Aparo (BSWA) oil fields are two such potential opportunities. Bonga North is a proposed tie-back project to the existing Bonga FPSO with Phase 1 comprising 14 wells. BSWA is a development of a new FPSO with Phase 1 comprising 23 wells. SUPPORTING RENEWABLE ENERGY STARTUPS Millions of Nigerians are excluded from the country’s power grid and Shell Companies in Nigeria have established and provided substantial funding for a not-for-profit, impact-investing company called All On. Operating as an independent company, All On works to bring reliable electricity – often from renewable energy sources -- to off-grid urban and rural customers. This support aims to build a solid pipeline of viable businesses that can create the scale required to address Nigeria’s access to energy gap. In December 2019, SPDC and SNEPCo made a significant additional 10-year financing commitment of $160 million in All On, bringing the total commitment to $200 million. By the end of 2021, All On had provided investment capital to over 40 renewable energy start-ups in its portfolio – an increase of more than 30% from 2020. One such company is Infibranches Technologies Limited, to which All On has committed $2 million, which is expected to enable the indigenous technology company to expand sales of solar home systems via its more than 13,000 agent banking partners across Nigeria. With the support of the Rockefeller Foundation, the All On Hub was established in 2020 to provide nonfinancial support and build the capabilities of off-grid energy entrepreneurs. In 2021, the hub supported 81 ventures – nearly double the 41 supported in 2020. Also in 2021, All On, Odyssey Energy Solutions and the Global Energy Alliance for People and Planet launched a $10 million equipment financing facility as part of the DART pilot programme in Nigeria. 7 Hydraulic flying leads support the delivery of hydraulic fluid and/or chemicals between subsea equipment. 8 Subsea trees are an assembly of valves and other components used to monitor and control the production of a subsea well. DART will combine demand pooling, aggregated purchasing of solar equipment, and access to affordable finance to unlock economies of scale for solar companies, achieve cost savings for end-users, and accelerate the growth of the renewable energy sector in Nigeria and beyond. DEVELOPING LOCAL CONTENT AND SKILLS Shell Companies in Nigeria contribute to the growth of Nigerian businesses that can provide technical and support services to the industry. This includes the manufacture of tools and technical kits, the operation of helicopter flights in the Niger Delta, and strategic partnerships between foreign and local companies to stimulate technology transfer and capacity development. While there are government-required programmes in some areas, such as the Nigerian and Community Content Strategy embedded in the Assa North/Ohaji South gas development project, Shell Companies in Nigeria deliberately seek to contract local businesses wherever possible. In 2021, Shell Companies in Nigeria awarded $800 million worth of contracts to Nigerian-registered companies. Of these, 92% were companies with at least 51% Nigerian ownership. SNEPCo has awarded major engineering and construction contracts to companies that are indigenous, have local staff, or possess domestic capabilities in the country. At present, the manufacture and rebuild of hydraulic flying leads7 (HFLs) is being carried out in-country by wholly indigenous companies. Pressure Controls Systems Nigeria Limited, another Nigerian company, continues to refurbish old subsea trees.8 Sometimes, a lack of access to capital hinders Nigerian companies from competing for and executing contracts effectively. Shell Companies in Nigeria have provided access to nearly $1.6 billion in loans to 901 Nigerian vendors under the Shell Contractor Support Fund since 2012. These loans help improve their tendering opportunities.

“We are pleased to have this rare opportunity to host the world’s top global maritime diplomat in Nigeria and to showcase the significant milestones achieved by this administration in the maritime industry”, the statement reads. “The visit of the IMO Secretary-General reflects the importance attached to Nigeria’s role in the Gulf of Guinea and her recent strides in confronting the challenge of maritime security and cleaner oceans. It also opens opportunities for Nigeria in ongoing and emerging multilateral engagements”.

During his visit, the Secretary-General is expected to engage in high-level consultations with government and private sector stakeholders with a special focus on the theme of the NIMS summit, Igniting the Blue Economy.

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Nigeria’s First Deep Seaport, First Full Automated Port Set For Completion

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Nigeria's First Deep Seaport, First Full Automated Port Set For Completion

Olushola Okunlade Writes

Following the successful delivery of the first set of Super Post Panamax State-of-the-art Ship to Shore (STS) Cranes and ten (10) Rubber Tyred Gantries (RTGs) on the 1st of July, 2022 and the delivery of the second batch shipment critical to the commencement of operations comprising of two (2) STS Cranes with 115 packages of accessories and five (5) RTGs with 270 packages of accessories on 5th of August, 2022, the Lekki Deep Seaport is set to be completed on the schedule ahead commencement of operations before the end of the year 2022.

Speaking during his first official visit to the Lekki Deep Seaport on Saturday, 13th August 2022, the Honourable Minister of Transportation, Mr. Muazu Jaji Sambo, expressed delight at the pace and quality of work at the Port site. Sambo commended the Management of the Nigerian Ports Authority for the tremendous support provided to Lekki Port in meeting the project timelines.

Nigeria's First Deep Seaport, First Full Automated Port Set For Completion
Left-Right: Managing Director, Nigerian Ports Authority, Alhaji Mohammed Bello-Koko; the Managing Director/Chief Executive Officer, Lekki Port, Mr. Du Ruogang; the Honourable Minister of Transportation, Mallam Muazu Sambo and the Permanent Secretary, Federal Ministry of Transportation, Dr. Magdalene Ajani during the first official visit of the Honourable Minister to Lekki Deep Sea Port in Ibeju-Lekki, Lagos on Saturday.

Sambo tasked Nigerian Railway Corporation, NPA, and Lekki Port to take urgent steps toward ensuring the Deep Seaport is linked by rail.

In his remarks, Managing Director Nigerian Ports Authority (NPA) Mohammed Bello Koko said, “the very fact the letter of intent between Lekki Deep Seaport and its financial partners was signed in April 2019, and by 2022 we are close to operationalization; this project symbolizes the possibilities that tenacity of purpose can actualize”. He added that NPA remains unwavering in providing every support and facilitation necessary to ensure that the timelines for take-off are met.

The Managing Director of Lekki Deep Seaport, Mr. Du Ruogang, while making a presentation to the Minister and his entourage, disclosed that the construction works for phase 1 are nearing completion and are currently at about 96% complete. The Lekki Port team, together with the Lekki Freeport Terminal (LFT), are working hard to ensure that construction is completed in September 2022, and thereafter, port operations will start before the end of this year 2022.

He commended the Lagos State Government for their immense support, especially in resolving the road infrastructure situation, which is critical for the success of a port of this magnitude. He acknowledged that work has commenced on the road but urged the government to help expedite the construction works so the evacuation of cargo from the Port will be efficient.

Nigeria's First Deep Seaport, First Full Automated Port Set For Completion
Left-Right: Executive Secretary/Chief Executive Officer, Nigerian Shippers’ Council, Barrister Emmanuel Jime; the Director General, Nigerian Maritime Administration and Safety Agency, Dr. Bashir Jamoh; the Honourable Minister of Transportation, Mallam Muazu Sambo; the Managing Director/Chief Executive Officer, Lekki Port, Mr. Du Ruogang; the Permanent Secretary, Federal Ministry of Transportation, Dr. Magdalene Ajani and the Managing Director, Nigerian Ports Authority, Alhaji Mohammed Bello-Koko during the first official visit of the Honourable Minister to Lekki Deep Sea Port in Ibeju-Lekki, Lagos on Saturday.

Highlighting the game-changing features, Ruogang stated that the port, upon completion, will have three (3) container berths, three (3) liquid berths, and a storage yard with over 15,000 ground slots terminal designed to support a throughput of 2.7 million TEUs annually, a Dry Bulk Terminal with an available quay length of about 300m amongst other distinctive attributes.

It would be recalled that the Nigerian Ports Authority (NPA) had in the first week of August secured through the Federal Ministry of Transportation an expedited presidential approval for the gazette of Lekki Deep Seaport as a Customs Port and an Approved Wharf in line with the requirements of the law. This development is another important step forward for the start of operations at the Port.

The Lekki Deep Seaport places Nigeria on the global list of nations with Deep Seaports and positions the country to maximize the comparative advantages that its maritime endowments and littoral assets confer.

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NIMASA: Board Appoints 3 New Directors, Promotes 469 Others

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… Jamoh emphasizes rededication, to Agency Core Values

Olushola Okunlade Writes

The Board of Nigerian Maritime Administration and Safety Agency (NIMASA) has approved the appointment of three new Directors, namely, Mr. Otonye Obom, Captain Umoren Sunday Michael, and Mr. Kazir Abubakar Musa, alongside the promotion of 469 others.

The Directors were promoted along with 18 Deputy Directors and 20 Assistant Directors; in a list which also contains 431 other staff elevated to their next grade levels.

The promotions were ratified at a meeting of the Governing Board of the Agency held at the NIMASA headquarters in Lagos.

Congratulating the beneficiaries, the Director General, Dr. Bashir Jamoh, charged them to remain committed to the Agency’s vision of making Nigeria great through the sustainable harnessing of its huge maritime potential.

“Congratulations to the 472 staff of the Agency whose promotions have been ratified by the NIMASA Governing Board.

It is my expectation that this development will serve as a morale booster as you collectively rededicate yourselves to the delivery of our core mandates”, Dr. Jamoh stated.

“We remain dedicated to ensuring staff welfare is at the forefront in order to encourage the hard work and dedication that our staff is known for to is maintained and built upon going forward.

Suffice to say that the promotional exercise was rigorous to ensure our high standards are maintained.

“On our part as Executive Management, we will continue to ensure that staff promotions are conducted as and when due as part of our commitment to human capacity development in the Agency thereby ensuring positive contributions to the nation’s economic diversification drive”.

The Governing Board enjoined the newly promoted staff to be more dedicated to their duties, saying that promotions come with responsibilities”.

The Agency Head of Public Relations, Osagie Edward noted that the promotion exercise is the third, under the Dr. Jamoh-led management since he assumed office in March 2020.

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