Items filtered by date: Monday, 27 August 2018

Trhe Nigerian Maritime Administration And Safety Agency (NIMASA) has resolved to promote the concept of Blue Economy, in order to encourage indigenous stakeholders in the maritime sector.

NIMASA has flagged off a three-prong formula to kick-start the concept.

First, it has sought and obtained government commitment for a tax relief regime for ship-owners through the Central Bank of Nigeria (CBN). With this incentive, indigenous ship owners can now acquire new building for local shipping trade and gradually build up their fleet at low cost.

Secondly, NIMASA is also working with the Nigerian National Petroleum Corporation (NNPC), towards ensuring that ship-owners are given the grace and the enablement to participate in the affreightment of the nation’s crude. It therefore implies, that once local players can participate in the affreightment of the country’s crude, no matter how little at the beginning, stakeholders, would soon rally their acts together, and ingeniously evolve a fleet that would be both enviable and soaring.

Thirdly, the agency is also equally laying a noteworthy foundational collaboration with the Nigerian Local Content Development Board, diligently working on the letters of the NLCDB Act, which prescribes a fix percentage of indigenous participation, in all the relevant economic activities of the oil and gas industry.

NIMASA’s vision seeks to integrate the entire ocean economic development, through social inclusion, environmental sustainability and then linking other industry activities as a business model.
Having a coastline of about 850km bounded the Atlantic Ocean; also traversed by a myriad of river system, which provide about 4000 km of navigable inland waterways, covering an estimated area of 199,580 km and having a total landmark of 923,415 km square waterways, Nigeria is primed for a blue economy.

Before now, the story was that infrastructural deficit and funding challenges that hamper the idea of a blue economy, which generally involves marine transportation and exploitation of living and non living resources in the maritime environment. They include, marine animals, oil and gas. Other activities are; towage, salvage, passenger ferry services, dredging and cargo trade, be it liquid bulk, dry bulk and general cargo (feeder and inland transport). There are also others like maritime ancillary services (freight forwarding services, storage and warehousing, maritime agency services container depot services, marine insurance and training school for skill acquisition

A study conducted about six years ago by a Federal Government committee on the nation’s maritime trade revealed that enormous capital flight in excess of N1.5trn were lost annually. These exclude expatriates manpower cost estimated at N600b annually going by the report of the National Content Development and Management Board (NCDMB). The estimated total loss to the Nigerian economy in these areas, in terms of capital flight is huge and estimated well in excess of $14.60b in 2008 and $10.38b.

Every activity in the nation’s blue economy is a potential job and wealth creation for the country if all resources are well harnessed. This is what NISAMA is set to address. The economy can as well generate up to 5million jobs either directly or indirectly. The Jones Act of the United States has more than 35.000 indigenous vessels carrying more than one billion tons of cargo and over 100million passengers annually, these fleet generates nearly 125,00 jobs, 80,000 of which are aboard vessels and represent a $26b private sector investment in vessel and infrastructure.

According to the Federal Government Committee report earlier referred to, 5million jobs meant for Nigerian youths were lost to foreigners in the last few years, due to non-participation of indigenous ship-owners in the nation’s maritime transportation business.
According to the study, “sale of Nigerian crude at FOB negates Nigerian maritime insurance policy, which domesticates insurance of imports and exports. By this, Nigeria is currently losing N15b or $101m annually. It was further observed that out of the 457 vessels working in the upstream, where some vessels earn $85,000 a day, year in year-out, Nigerian ownership accounts for less than 8 percent, which is far less than 60 percent to 90 percent for transportation and shipping provisions respectively, in the Nigeria content Act, the Committee regretted.

Apart from the non-participation of Nigerian owned vessels in Maritime transport, the 457 foreign vessels operating within the Nigerian waters, have foreign crewmembers when teaming youths are roaming the streets, including professional mariners who have been excluded, because of lack of sea time experience.
This is due to the absence of a homegrown national maritime development strategy as envisaged in the Cabotage Act of 2003.

The crude oil sales on Free On Board (FOB) are strictly based on government policy and the Nigerian National Petroleum Corporation mainly complies with the policy. The situation can however change if a new policy directs the NNPC to contract the crude oil sales on Cost Insurance and Freight (CIF); in line with what obtains world- wide and if Nigerians would be willing to give its wealth creation policy another push.

However, many of the indigenous shipping companies have not been able to attract necessary funds to purchase good and quality vessels, coupled with their inability to sign technical agreement with international companies. So they continue to trade with their old and low quality vessels, thus attracting low patronage by the contract awarding agencies.

This is why the Nigerian Maritime Administration and Safety Agency (NIMASA) demands higher stakes for local investors in nation’s blue economy!

 

Source: Business Insider

Published in Business
Monday, 27 August 2018 09:10

Nigerian govt to sell Afam, Yola DisCo

The Bureau of Public Enterprises (BPE), an agency of the Federal Government, has called for Expressions of Interest from prospective investors who are interested in buying 60 percent stake in Afam Power Plc and Yola Electricity Distribution Company Plc.

Afam is a thermal power generation company in Nigeria, Yola DisCo, which services Adamawa, Borno, Taraba and Yobe states, is one of the eleven electricity distributions companies in the country, while BPE is an agency charged with the overall responsibility of implementing the Nigerian policy on privatization and commercialization.

The Head of Public Communications of BPE, Amina Othman, told Punch in Abuja on Thursday, that the sale of the firms would take place between December and January 2019, but prospective investors would have up until September 26 this year to send in their Expressions of Interest in order to participate in the transactions.

Read also: Nigeria earns $26bn from oil in 7 months as oil prices rise

According to the BPE, both local and foreign investors could participate in the privatisation exercise upon submission of relevant documents including evidence of incorporation, payment of taxes and capacity to manage the power firms.

The sale of Yola Disco followed poor management of the company occasioned by the activities of Boko Haram in the North Eastern part of the country, particularly Adamawa, Borno and Yobe states which are part of the four states covered by Yola DisCo.

In view of this, the Integrated Energy and Distribution Marketing Company had asked the government to buy back its 51 percent stake in the company.

In June, the National Council on Privatisation of the Federal Government had approved the appointment of transaction advisers for the privatisation of the two power firms, which were carved out of the defunct Power Holding Company of Nigeria (PHCN).

The Director-General of the privatization agency, Alex Okoh, had stated that the government expected N400 billion from the sale of the public enterprises, which would be ploughed into funding the 2018 budget.

But the Minister of Budget and National Planning, Sen. Udoma Udo Udoma, while giving a breakdown of the 2018 Budget, said a total of N306 billion was estimated as proceeds from privatisation which would be used to finance over N2 trillion deficit in the budget

 

Source: The Guardian

Published in Engineering
Indications have emerged that the nation may soon begin to earn less from crude oil as the monthly volume of Nigerian oil imports into the United States dropped to 2.89 million barrels in May, the lowest since February 2016.
 
Crude oil accounts for over 70 percent of the Nigeria’s revenue and more than 95 percent of its foreign exchange earnings, while the United States (U.S) was the country’s fourth largest export destination, according to a recent Foreign Trade Statistics by the National Bureau of Statistics (NBS).
 
The latest data obtained by our correspondent from the US Energy Information Administration (EIA) during the weekend showed that the United States reduced its importation of Nigerian crude oil by 62.65 percent from 7.75 million barrels recorded in April.
 
Nigeria may start earning less as U.S slashes oil importation by 62%
 
The depreciation in the demand of the commodity, which was the largest monthly decline in more than three years, was occasioned by the increase in the production of the U.S crude.
 
Read Also: Nigeria earns $26bn from oil in 7 months as oil prices rise
 
An analysis of the data from the statistical arm of the U.S Energy Department revealed that, the country imported 10.03 million barrels of Nigerian crude in January.
 
It, however, reduced the importation of the commodity for the first time this year from 10.34 million barrels in February to 3.92 barrels in March, indicating 62.08 percent drop. In April, 2018, the U.S bought 7.7 million barrels of the commodity.
 
Within the first five months of 2018, the total Nigerian crude imports by the U.S stood at 34.93 million barrels, this is over 20 percent drop from 43.83 million barrels imported in the corresponding period last year.
 
The U.S crude imports from Nigeria was on a steady decline since it peaked 368.42 million barrels in 2010, it fell to 21.46 million barrels in 2014 and 19.86 million barrels in 2015 following the drop in the prices of crude oil in the international market.
 
However, the oil imports rose to 75.81 million barrels in 2016 and further increased to 112.92 million barrels in 2017.
 
But since crude oil production in the U.S began to boom in recent months, reaching 10.9 million barrels per day (mbpd) in June and 11 mbpd two weeks ago from 2.33 mbpd in April, the country has continued reduce its crude importation.
 
The EIA had reported last week that the U.S net import of the commodity fell by 1.05 mbpd to an average of 6.36 mbpd, with 10.7 mbpd and 1.7 mbpd as projections for the country’s crude oil production for 2018 and 2019, respectively.
 
 
Ripples news.
 
Published in News Economy
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