Oando Plc Favour Ifeoluwa & Akinola Ajibade Oando Plc says it has completed and won the bid for the operatorship of oil block KON 13 in Angola. The firm which recently acquired Eni of Italy’s oil assets in Nigeria, said that the award of the oil block located in Angola’s onshore Kwanza Basin followed a competitive bidding process by the country’s oil and gas sector regulator. It further said hat the asset in which it owns 45 per cent participating interest, has estimated prospective resources of 770 to 1,100 million barrels of oil. Oando is handling its operations relating to the asset through its upstream subsidiary, Oando Energy Resources (OER). “Oando Plc, Africa’s leading indigenous energy solutions provider listed on both the Nigerian Exchange Limited and Johannesburg Stock Exchange is pleased to announce that its upstream subsidiary, Oando Energy Resources (OER), has been awarded operatorship of Block KON 13 in Angola’s Onshore Kwanza Basin, following a...
By Akinola Ajibade
A total of N92.77 billion, approximately one per cent of the N92.23 trillion aggregate credit to the economy, by commercial banks went to the Nigerian manufacturing sector between 2027- 2021..
The development has further worsened the performance of the sector, which has struggled to contribute to the nation's economy.
This has affected governments’ efforts at industrializing Nigeria, over the years, through manufacturing.
While Speaking at the 2nd Adeola Odutola Lecture in commemoration of the 50th Annual General Meeting ( AGM) of the Manufacturers Association of Nigeria( MAN,), the President and Chief Executive officer, Dangote Group, Alhaji Aliko Dangote, said the manufacturing sector has refused to grow, due to paucity of funds.
In a paper titled ‘Agenda Setting for Industrializing Nigeria in the Next Decade’, listed other problems facing the industry to include acute shortage of forex; dearth of long term funds; poor infrastructure; policy inconsistencies/ implementation/enforcements; limited industries; over regulation; multiple and tax rates for industries and Insecurity.
On funding, he argued that the manufacturing sector is currently overwhelmed by shortage of forex which makes imports difficult and expensive. Said he: “In the official forex market, manufacturers are only given about 25 per cent of their forex requirement, which is often allocated in bits over a period of a few months. This obviously affects their ability to fulfil obligations with suppliers for raw materials, spare parts, equipment/machinery, etc.
On dearth of long term funds, he explained manufacturing in Nigeria is N92.77 billion constrained by inadequate and high cost of credit. According to him: “Of the N92.23 trillion aggregate credit to the economy by commercial banks from 2017-2021, only N92.77 billion or less than 1 per cent was channeled to the manufacturing sector”.
For him, the stock of infrastructure available to support manufacturing in the country “is grossly inadequate”. He explained Nigeria provides about 4000 megawatts of electricity per day for over 200 million people and corporate entities. “Inadequate power supply is a major cause of high cost of production and low competitiveness” he said. He listed other infrastructure related challenges as including the poor state of roads, congested seaports, limited gas network and underdeveloped rail system.
His argument on policy inconsistency/implementation /enforcement is well known to stakeholders in the business space. Dangote argued, “The Nigerian industrial sector used to be a haven for Foreign Direct Investment(FDI) but that has changed due to inconsistency and impromptu changes to the implementation of Export Processing Zone, Pioneer Status, Export Expansion Grant modalities, frequent tariff changes and the dichotomy between CKD and SKD in the automobile assembly subsector”.
On limited core industries, for him, a number of large-scale investments that would have triggered the proliferation of smaller industries around it are unfortunately either comatose or functioning sub optimally. He listed iron and steel complexes, the paper mills, aluminum smelting plant, vehicle assembly plants, refineries, petro-chemical plants, etc. “Some of these investments at some point provided inputs to local industries.Today, the manufacturing sector relies largely on imports for vital raw materials despite the high cost and difficulty in sourcing forex as well as its impact on competitiveness,” he argued.
Another major challenge is over regulation, according to Aliko Dangote. Hear him: “Even when a government committee recommended the rationalization of these agencies with duplicated mandates, it has not yet been implemented. Today, industries are bombarded daily with a barrage of demand notices emanating from agencies with similar mandates.”
On multiple and high tax rates Aliko Dangote fed the audience at the hall and its overflow at the Oriental Hotel venue in Victoria Island, Lagos with an intimidating list of taxes on the industry by government. Said he : “The manufacturing sector is beset with over 30 statutory taxes, levies, fees, rates and charges including company income tax, stamp duties, petroleum profit tax, capital gain tax, industrial training fund tax, education tax, etc., etc.
Also, MAN's President, Mansur Ahmed said manufacturers are overburdened with problems such as high operating costs, shortage of forex among several others.
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