•Says subsidy slumped from N76bn to N2bn
The Managing Director of the Nigeria Sovereign Investment Authority (NSIA), Mr Uche Orji, yesterday disclosed that the restructuring of the Presidential Fertiliser Initiative (PFI) led to a crash in fertiliser price from N13,000 to NN5,500.
Speaking at the BusinessDay Breakfast Meeting in Abuja, with the theme: “Macroeconomic Outlook, Innovation and Technology,” Orji noted that the subsidy that was hitherto paid by the federal government on the commodity had fallen from N76 billion to N2 billion.
The NSIA MD, who spoke on the need to pay more attention to how technology could be applied to all sectors of the Nigerian economy, pointed out that with the cleaning up of the system, today, Nigeria has an excess of 10 million bags of the product.
With the programme now handed over to the private sector to manage, Orji stated that any pressure it posed to the balance sheet of the NSIA has now been removed.
“In agriculture, we have done two or three things. But one of the things we have been working on and which proved controversial in some aspect for the last five years, is that the NSIA has been in charge of the presidential fertiliser initiative.
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“A few key points just so that you understand the impacts of this programme. When we started the PFI programme, there were only four fertiliser plants in Nigeria. The subsidy bill that was established was N76 billion. Fertiliser was N13,000 a bag and it was scarce.
“Twelve months after this programme, fertiliser prices dropped to N5,500. We had 20 blending plants working in the country and the subsidy bill was only N2 billion.
“We have now restructured the programme and taking it off our balance sheets, put it back in the hands of the lenders, make people put bank guarantees on it and put up cash so we took pressure off the NSIA balance sheet last year,” he said.
Admitting that many people did not like the restructuring programme, Orji noted that the move had completely transformed the sector.
“The restructuring that we did, we went from a subsidy to now running a plus N5 billion profits on that programme, 52 blending plants in the country, we have 20 million bags of fertilisers , we have 10 million in inventory, excess fertiliser within the country.
“But we are now out. We’ve taken the sector, restructured and we have handed it back to the private sector,” the NSIA boss stressed.
In addition, Orji noted that the other thing, NSIA did in terms of agriculture was to embark on a demonstration farm in collaboration with another company to build a farm in Nasarawa state.
“These are not Genetically Modified Organisms (GMOs), we made sure we had the right farming practices. So it’s one of the things we’re doing in agriculture and we are going to be running the special agricultural processing zones. That’s also a programme that we will announce next year,” he stated.
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In his remarks, the Minister of Science, Technology and Innovation, Dr. Ogbonnaya Onu, lamented that for too long, the nation had not effectively utilised the strong relationship between science, technology and innovation and business.
“Science, Technology and Innovation (STI) serve as the mother of business. It will be difficult for business to thrive without the effective deployment of STI,” he posited.
He explained that agriculture was at least 80 per cent dependent on STI, whether in plants or livestock, the production of seeds that are high yielding, disease resistant and climate smart.
According to the minister, countries with the largest economies in the world, are those that effectively deploy STI to nation building.
Hence, for business to grow faster in Nigeria, and for the private sector to be stronger than they are today, Onu opined that the country needs to effectively deploy STI to nation building.
“The federal ministry of science, technology and innovation is ready and prepared to work with the business community to make our economy stronger, our nation greater and Nigerians happier.
“This is the best way to ensure that we create new jobs, feed ourselves, improve our economy, reduce poverty and recreate the middle-class and make the nation self-reliant for the good of all,” he noted.
Also speaking during the programme hosted by the Publisher, BusinessDay Media Limited, Frank Aigbogun, the Managing Director of the company, Dr. Ogho Okiti, argued that Nigeria has a balance of payment crisis.
Added to that, he explained that the macro-economic instability would not allow any appreciable growth in Nigeria, arguing that there cannot be recovery until the issues were properly situated and sorted out.
“Private investment will not come in when all these things are misbehaving the way they are doing at the moment, including double digit inflation,” he noted.
Bloody clashes: Sanwo-Olu’s RTEAN ban timely, say auto journalists
The Nigeria Auto Journalists Association (NAJA), the umbrella association of automotive reporters in Nigeria, has commended the Lagos State Governor, Babajide Sanwo-Olu, for his swift action in suspending all activities of the Road Transport Employers Association of Nigeria (RTEAN) in the state following the recent restiveness between rival members of the group in Iyana-Iba, Ojo and Lagos Island areas of the state.
Mike Ochonma, Chairman of NAJA, made the commendation in a press statement he issued after the ban on the activities of RTEAN.
The chairman of NAJA stated that the ban by his the governor became imperative to prevent further breakdown of law and order in the state.
He called for more restraint and caution from RTEAN members to allow the state government to take necessary steps that would not only restore peace and decorum from the association, but more importantly, guarantee the security of lives of defenseless Lagos commuters going about their normal business.
The governor had also announced the constitution of a 35-man caretaker committee to take over activities of the union henceforth.
Heading the committee is Sulaiman Adeshina Raji with Bamgbose Oluseyi as deputy chairman.
During the clash last Wednesday, the transport union members were seen in a trending video clip engaging themselves in a free-for-all, hauling stones, bottles, cutlasses and other dangerous weapons at each other.
Two persons were reported killed during the clash.
Major marketers hail NNPCL’s acquisition of top downstream firm, OVH Energy
The Major Oil Marketers Association of Nigeria (MOMAN), an umbrella body of the largest downstream oil and gas companies in the country, has congratulated the Nigerian National Petroleum Company Limited (NNPCL) on the successful acquisition of OVH Energy Marketing (OVHEM) Limited, a major downstream operator.
MOMAN in a statement issued yesterday by its Chairman and Managing Director of Ardova Plc, Mr. Olumide Adeosun, welcomed and encouraged the ongoing market consolidation geared towards bringing stability, cost and logistics optimisation in the downstream sector.
OVH is the owner and operator of the Oando- branded retail service stations across the country, and the company and NNPCL are member companies of MOMAN.
The Group Chief Executive Officer (GCEO) of NNPCL, Mallam Mele Kyari and the Chief Executive Executive Officer of OVH Energy Marketing Limited, Mr. Huub Stokman, had announced the acquisition transaction last weekend at an event held in Abuja.
However, commenting on the development, Adeosun said, “We send hearty congratulations to NNPC Retail Limited and OVH Energy Marketing Limited on the successful acquisition of OVH Energy Marketing Limited by NNPC Limited.
“Both companies are active MOMAN members who are committed to our core values of health, safety, the protection of the environment, quality, customer service, innovation, technology and compliance with international corporate governance codes.
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“MOMAN welcomes and encourages the ongoing market consolidation which will bring stability, cost and logistics optimisation, enhanced competition and best practice sharing as we progress to a deregulated market.”
Kyari had said OVH Energy’s Oando- branded retail service stations would be rebranded into the NNPCL’s brand and merged with NNPC Retail Limited with full integration scheduled to take place by the end of 2023.
Both Kyari and Stokman were, however, silent on the financial implication of the deal and what would be the fate of OVH Energy Marketing’s employees when the formal takeover takes place by 2023.
The acquisition tagged by NNPCL as ‘Acquisition for Growth’, was expected to see the national oil company become the owner of entire assets of OVH Energy Marketing, licensee of the Oando retail brand and ASPM Limited, custodians of the Lagos Midstream Jetty, also known as West Africa’s first privately owned midstream jetty.
OVH Energy boasts of distributing over one billion litres of refined petroleum products annually while ASPM Limited is focused on strengthening Nigeria’s downstream value chain through the Lagos jetty.
In the short term, the acquisition would see the NNPCL receive a jetty (ASPM) with 240,000 metric tonnes monthly capacity, eight Liquefied Petroleum Gas (LPG) plants, three lubes blending plants, three aviation depots and 12 warehouses.
The deal would also bring over 380 additional filling stations under NNPCL retail brand in Nigeria and Togo, on its journey to attaining 1,500 stations, making it the largest petroleum product retail network in Africa.
OVH’s expertise spans the provision of jetty services and the marketing and distribution of refined petroleum products for retail, commercial and industrial purposes.
The NNPCL GCEO had explained that the strategic move was aimed to create the leading downstream energy company in Nigeria and West Africa, driven by operational efficiency, best-in-class management, and physical infrastructure while offering premium petroleum products and related services to customers, in line with global standards.
Through this acquisition, he said the NNPC Retail Limited would build on the existing success of OVH Energy and operate model service outlets leveraging OVH’s extensive asset base and commercial capabilities.
Kyari further stated that the NNPCL was bringing to the table, its 45 years of experience and strong capability to bear on the management of the facilities.He maintained that securing the country against energy poverty would mean access to petroleum products in addition to managing the energy transition, which he said has become a reality.
NMDPRA seals 16 gas plants, arrests five suspects in Edo
The Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) has sealed 16 illegal gas facilities in Edo State.
Some filling stations were also sealed over an alleged breach of rules and regulations.
The agency arrested five suspects during the exercise.
The agency’s state comptroller, Ebi Ogionwo, said the clampdown was to curb the activities of illegal and unlicensed oil and gas operators in the state.
He alleged that some misguided operators were setting up oil and gas facilities in areas not suitable for the business and without necessary approval from the agency.
Ogionwo said, “It is an offence for anyone to site such facilities without due approval from the NMDPRA. The agency is out to bring sanity to the operations of midstream and downstream petroleum business in the state.”
He further warned investors against taking laws into their hands by setting up gas and petroleum facilities in areas not approved by the agency.
Ogionwo said five suspects arrested during the exercise would be charged to court.
“There are laws, guidelines and regulations that people must follow before setting up oil and gas facilities. So, the purpose of the operations is also to check the level of compliance by those who have set up these facilities in the state and take necessary actions that are required,” he said.
Ogionwo added that the illegal operations of oil and gas facilities compromised the safety of lives, property, environment as well as deprived both the state and Federal Governments of the revenue that should accrue to them through taxes and other sources.
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