Professor Tim Unwin, Secretary-General of the Commonwealth Telecommunications Organisation has warned that the growth of ICTs is causing greater inequalities, further excluding the poorest and most marginalised.
Unwin, who was speaking at the 32nd National Information Technology Conference of Sri Lanka on the 25 – 27, August said the same phenomenon is also taking place in some of the richest societies.
All stakeholders, especially governments, have an important role to play in helping to empower marginalised groups through more accessible and affordable ICTs, he said.
To address this challenge, countries could focus their efforts on:
• Developing appropriate multi-stakeholder partnerships to achieve common goals for poverty reduction;
• Addressing more rigorously crime in cyberspace by implementing the new Commonwealth Cyber-governance Framework adopted by Commonwealth ICT Ministers in March 2014;
• Committing to technical solutions that focus explicitly on the needs of the poorest and most marginalised.
He proposed seven key agendas for computer scientists:
• Concentrating on inclusive design, and ensuring accessibility for all;
• Designing “with” rather than “for” the poor;
• Combining technology with wider socio-political agendas, and developing innovative regulatory models;
• Identifying better ways of delivering affordable access;
• Focus on low power devices and better batteries;
• Development of poverty relevant software; and
• Creating more sustainable and renewable technological solutions.
“I am impressed to see how long this event has been going on for. It shows how committed Sri Lanka has been in using ICTs for the economic and social empowerment of Sri Lankans and this serves as a good example to other Commonwealth countries”, Professor Unwin said.
The event has been organised annually by the Computer Society of Sri Lanka since 1982.
The International Air Transport Association (IATA) African Aviation Day emphasised the need for intra-African air connectivity to spread economic and social prosperity across the continent.
In particular, IATA noted that the liberalisation of air rights for intra-Africa flights could yield significant benefits in both jobs and GDP growth.
Africa is well-placed to enjoy sustained economic growth thanks to a young, expanding and urbanising population, combined with abundant natural resources. But because intra-African aviation connectivity and the economic health of its airlines are weaker than they could be, opportunities for job creation, business growth and innovation are being lost.
The Ebola Scourge
African airlines are expected to return a profit of just $100 million in 2014, on a net profit margin of 0.8%, the lowest of all aviation regions. “Increased intra-African air connectivity is essential if Africa is to seize the opportunities for growth promised by its demographic and resources advantages.
Aviation in Africa supports nearly seven million jobs and $80 billion in GDP, but it faces challenges in terms of liberalisation of markets, safety, costs, infrastructure and regulation. Only through industry and governments working hand-in-hand can these challenges be overcome, to the benefit of everyone across Africa,” said Raphael Kuuchi, IATA’s Vice President for Africa.
Tackling the Challenge of Ebola
The spread of Ebola continues to be a significant medical challenge in the region. IATA is liaising closely with the World Health Organisation (WHO), which is taking the lead in tackling the disease.
The WHO has consistently stated that travel restrictions are unnecessary, most recently in their media note of 14 August, 2014. The note specifically explains that aviation is “low risk” for Ebola transmission, and that the “WHO does not consider air transport hubs at high risk for further spread of Ebola.”
The aviation industry is taking all necessary precautions, such as introducing exit screening at certain airports. Airlines also have well-tested procedures for handling suspected cases of infection, including guidelines for isolation and care for ill passengers, and measures for disinfecting aircraft.
“The WHO is best placed to give authoritative, independent advice on how best to deal with Ebola. They have been very clear that travel and trade bans are unnecessary. Unless this advice changes we hope that countries working hard to eradicate Ebola continue to benefit from air connectivity,” said Kuuchi.
Enhanced Connectivity
To provide African governments with a clearer view of the benefits of intra-African connectivity, IATA formally launched a report showing that liberalisation of air services across 12 African nations would create 155,000 jobs and boost GDP by $1.3 billion.
The report by InterVISTAS, an independent consultancy, calculated the positive economic impact of implementing the 1999 Yamoussoukro Decision, which pledged to open up air transport markets within Africa to transnational competition. The 12 nations in the report are: Algeria, Angola, Egypt, Ethiopia, Ghana, Kenya, Namibia, Nigeria, Senegal, South Africa, Tunisia and Uganda.
“This report is a major step forward in quantifying the benefits of liberalizing air services across Africa. It is absurd that it is possible to travel 13 times a week from Nairobi to London yet impossible to travel directly from Nairobi to Dakar. A potential five million passengers a year are being denied the opportunity to travel, trade, and spread economic and social development,” said Kuuchi.
Improved Safety
The 2012 Abuja Declaration on African Safety by transport ministers of the African Union set out a goal for African aviation to match the average safety levels of the rest of the world by 2015.
“Safety is the number one priority for aviation. Africa has been closing the gap compared to the rest of the world but there is still a lot of work to do to reach the Abuja Declaration goal. The implementation of the IATA Operational Safety Audit (IOSA) by all eligible airlines in Africa is mandated through the Declaration, and IATA is working hard to assist airlines to achieve that,” said Kuuchi.
IATA has identified 20 airlines for assistance in implementing IOSA. The Declaration also calls on states to create well-resourced and autonomous Civil Aviation Authorities and to implement safety management systems.
Competitive Infrastructure and Costs
Improved consultation and partnership between industry and government is the key to ensuring Africa enjoys competitive infrastructure and business costs. In many parts of Africa infrastructure needs to improve, but it is important that improvements are funded according to established international principles. Transparency and consultation are critical.
“The foundation of a successful air transport sector is good physical infrastructure coupled with competitive costs. But governments also have a role to play in encouraging air connectivity through appropriate taxation and enabling regulation. If aviation is treated as a cash cow, its ability to be an economic catalyst is compromised. Aviation is ready to play a much more prominent role in the African economy, provided it is able to operate in a policy framework that values its contribution,” added Kuuchi.
The Global Airlines Financial Monitor: July 2014
Key Points:
• Worldwide airline share prices fell 2% in July compared to June, but in line with performance of the broader market;
• Initial Q2 financial results show strong gains for US airlines’ performance, but declines in Asia Pacific due to cargo weakness and cost pressures for Chinese carriers from the depreciating Yuan;
• Jet fuel prices eased slightly in July as improving crude oil supply conditions in some regions countered concerns over conflict in the Middle East and Ukraine;
• US passenger yields are up after declines in Q1, but weakness continues in other regions;
• Air travel markets continue to expand and air freight demand recorded a small improvement in June, consistent with a rise in business confidence and stronger world trade activity;
• Expansion in available seats showed a seasonal spike in June, stronger than growth in demand;
• Passenger load factors fell on the back of strong capacity expansion, but air freight load factors improved slightly due to a contraction AFTKs.
The Global Airlines Financial Monitor: June 2014
Key Points:
• Growth in the number of international air passengers slowed in June to 2.4%, with first half growth of 3.7%, compared to the same period last year;
• Most of this ‘year-on-year’ growth took place last year – since December, travel has expanded by just 0.7%;
• The travel slowdown has been caused by slower world trade growth and a dip in business confidence;
• However, business confidence has been rising in recent months, pointing to a stronger second half for travel;
• Travel on premium seats grew more slowly in June, at 1.8%, than economy travel, at 2.5%;
• However, the rising trend in the share of premium since late-2012 remains intact;
• Moreover, premium yields have been more robust so the premium revenue share has risen faster, to almost 29%;
• Premium yields have been supported by the relative strength of longer-haul markets, with the strongest growth of larger markets seen on the North Atlantic, Pacific and Europe-Far East;
• By contrast markets connected with emerging markets have generally been weak and some are getting weaker;
• Faster long-haul growth has meant that international RPKs are growing much faster than passenger numbers, at 5.5% versus 2.4% in June.
Over the years, the Suzuki Brand of Motor Models has continued to generate and earn value for discerning corporate and personal clientele in the automobile industry in Nigeria in terms of driving safety, ergonomic comfort, cutting-edge technology and competitive pricing.
Marketed in Nigeria by C & I Motors Limited, the Suzuki Brand comes in different models to satisfy every segment of the Nigerian market.
According to analysts in the automobile industry, the Suzuki Brand represents the emerging Brand in Nigeria.
The World Health Organisation (WHO) kicked off its global high-level conference on Health and Climate Change last week in Geneva. What makes this conference particularly significant is the fact that while the WHO has been working on this agenda for the past 20 years, this is the first time it has led a conference with so many decision-makers involved.
The compelling state of scientific evidence – as documented in a separate chapter of the Intergovernmental Panel on Climate Change’s Fifth Assessment report – has lent a certain urgency to the climate change agenda in the health community. The audience for this conference included around 300 senior level participants from various WHO member countries, mostly from the health sector, including a number of ministers.
WHO Director-General, Dr. Margaret Chan opened the conference with Christiana Figueres, Executive Secretary of the UN Framework Convention on Climate Change, accompanied by video messages from the heads of the World Bank Group, the United Nations, and the UN Environment Program.
Dr. Chan defined climate change as the “defining health issue of this century.” It is a powerful statement about the challenges that lie ahead.
Figueres turned to the state of the international climate negotiations and their importance to the health community. Using the analogy of disease prevention and treatment, she said that climate change is a symptom of a disease that is called dependence on fossil fuels. Unlike the health sector, treatment and prevention are nested in each other in the case of climate change. The treatment is the policies and financial instruments; prevention is the same (hence nested) but it needs scale and speed.
While there is good news on the treatment front, more needs to be done for prevention to take place. Governments are committed to working toward an agreement to be adopted in Paris in 2015 that can do the job of prevention, but only if the actions agreed are ambitious enough. She referred to the expected climate change agreement at the 2015 COP in Paris as “a global public health agreement.”
That set the tone for an engaging first day of deliberations.
There was unanimous agreement among the health professionals gathered in the room that indeed climate change is one of the biggest health threats of the 21st century, however a challenge is to recognise that the past patterns of climate variability and disease cannot be an indication of what is in store for the future.
On the operational front, the main challenges that came to the fore were the need for multi-sectoral engagements and availability of technical and financial resources to undertake the necessary research and interventions to enable effective action. And here they turned to the World Bank.
World Bank Group Director for Climate, James Close highlighted the health benefits of climate action in other sectors. Our recent report Climate-Smart Development: Adding up the benefits analysed the positive impact of clean transportation, energy efficiency and other development projects on both human health and climate change.
Close also discussed the work being initiated by the Bank in collaboration with the Nordic Development Fund to develop an approach to climate and health that is likely to be tested in Mozambique as part of an on-going climate change development policy operation. He also discussed the Bank’s screening tools for health projects for climate and disaster risk and various funding mechanisms for addressing climate change effects on health.
By the end of the first day, everyone around me seemed energised, if slightly overwhelmed by the emerging health and climate agenda. It’s a steep learning curve – and an urgent one for all of us.
• Reduced energy consumption by 20%, cut water consumption by 40% per tonne of product, and increased production volume by 50% over the past six years • COMMITMENT TO PROVIDE CLIMATE CHANGE LEADERSHIP: Energy efficiency increased from 42% to 74% at its Agbara factory in Nigeria • COMMITMENT TO IMPROVE RESOURCE EFFICIENCY: Recovered rainwater to be used to water green areas onsite and for use in toilets at its Yopougon factory in Côte d’Ivoire • COMMITMENT TO PROVIDE MEANINGFUL AND ACCURATE ENVIRONMENTAL INFORMATION AND DIALOGUE: Named leader in environmental sustainability in Nigeria in 2013
Nestlé, the world’s leading Nutrition, Health and Wellness company is making headway in meeting its commitments to the environment in Central and West Africa and across the globe.
The company’s environmental commitments are part of the Nestlé in Society report ‘Creating Shared Value and Meeting our Commitments.’
It has made a total of 35 pledges that cover nutrition, water, rural development, environmental sustainability and compliance, which it aims to fulfil by 2020 or earlier. Six of these primarily focus on the environment.
“We believe that all parts of society share responsibility for the environment,” said Kais Marzouki, Market Head for Nestlé Central and West Africa.
“We are determined to lead and be recognised for our efforts to reduce our environmental footprint by ensuring efficient use of energy in our manufacturing operations, and engage in meaningful environmental dialogue,” he added.
Nestlé’s pledge to the environment is part of its approach to business, which it calls ‘Creating Shared Value’. The company aims to create value in the supply chain, improve livelihoods for the communities in which it operates, and enhance its own activities.
Climate Change Leadership
As part of Nestlé’s environmental commitments, the company has vowed to drive climate change leadership.
It has pledged to lower greenhouse gas (GHG) emissions per tonne of product by 35% since 2005, by improving energy efficiency and investing in renewable energy sources.
The company is already making an impact in its Agbara factory in Nigeria.
The facility is generating electrical power, chilled water and hot water by recovering heat generated from its exhaust gases.
As a result, this has increased overall energy efficiency from 42% to 74%, and has reduced carbon dioxide emissions by 5,000 tonnes per year since 2012.
In its two Nigerian factories, the company has also reduced its direct GHG emissions from 257 kg per tonne of product in 2012 to 186 kg a year later.
Its total onsite energy consumption decreased from 4.4 gigajoules per tonne of product in 2012 to 2.95 gigajoules in 2013, while increasing its production volume.
Nestlé is also boosting climate change leadership at its coffee factory in Abidjan in Côte d’Ivoire. The company has invested CHF 15 million in a new boiler with a target to reduce its natural gas exhausts by 15% using coffee grounds, and cut its carbon dioxide emissions by the same percentage.
Zero Waste
Nestlé in the Central and West Africa region is also aiming to deliver on its commitment to improve resource efficiency.
Over the past six years, it has already reduced its energy consumption by 20% and water consumption by 40% per tonne of product, while doubling its volume in production in the same time period.
The company is making progress at its Agbara factory in Nigeria by exploring ways to recover valuable materials in food processing.
Raw materials such as maize, millet, soya and sorghum are being processed as ingredients for its food products. The spent grains are then collected and sold to farmers to be reused as livestock feed instead of going to landfill.
In Senegal, Nestlé is treating and reusing waste water for its gardens at the Dakar factory.
The company is implementing a project to use recovered rainwater to water green areas onsite and for use in toilets at its Yopougon factory in Côte d’Ivoire. It looks to do this long term and cut the use of potable water in sanitary use.
A process to filter waste water at its Douala factory in Cameroon is helping to improve the waste water discharged to standards close to potable water.
By 2015, Nestlé across the globe aims to reduce energy consumption per tonne of product in every product category to achieve an overall reduction of 25% since 2005.
It is dedicated to achieve zero waste for disposal in 10% of its factories worldwide in the same time period, in which no waste will go to landfill or be incinerated without energy being reused in the process.
Environmental Accolade
Nestlé was hailed for promoting environmental awareness at its manufacturing sites in Nigeria including the Agbara and Flowergate factories and the Ota distribution centre.
The Social Enterprise Reports and Award (SERA) – Nigeria’s prestigious Corporate Social Responsibility award – named Nestlé as the Leader in Environmental Sustainability in 2013.
The company also received accolade for its key performance indicators in the Nestlé in Society report ‘Nestlé Nigeria Creating Shared Value 2012’.
Doubts about the sustainability of the North American oil and gas boom centre on rapidly declining output from many shale wells after they are initially drilled.
Shale sceptics point to the need to drill an ever-increasing number of new holes just to replace the declining output from existing wells, let alone expand production. At some point, it will become impossible to keep up, they argue.
The problem has been likened to the Red Queen’s Race in Lewis Carroll’s “Through the Looking-Glass” where the chess piece warns Alice that “it takes all the running you can do, just to keep in the same place.”
Geologists have worried about the problem of replacing declining output from old wells for more than a century. U.S. geologist Carl Beal voiced concern that the “limit of production in this country is being approached” as long ago as 1919.
“Although new fields undoubtedly await discovery,” he wrote, “the yearly output must inevitably decline, because the maintenance of a given output each year necessitates the drilling of an increasing number of wells.”
“Such an increase becomes impossible after a certain point is reached, not only because of a lack of acreage to be drilled, but because of the great number of wells that will ultimately have to be drilled,” Beal explained in a careful monograph for the U.S. Bureau of Mines on the “Decline and Ultimate Production of Oil Wells”.
Ultimate Recovery
Shale’s doubters point to the faster decline rates on horizontally drilled and fractured wells bored into shale compared with conventional wells drilled into more-permeable reservoirs to suggest the replacement problem is much worse for unconventional oil and gas plays.
But there are plenty of reasons to think the focus on decline rates is misplaced and is unlikely to constrain North American oil and gas output in the next decade.
First, oil and gas producers have learned to drill and fracture wells much faster, using mass production techniques borrowed from manufacturing, so the same number of rigs and crews can drill many more wells than before.
Second, the sceptics focus too much on the decline rate rather than the total amount of oil and gas recovered from a well over its lifetime, which is more relevant to the sustainability of the shale revolution.
The relationship between initial production (IP), the decline rate (DR), and the estimated ultimate recovery (EUR) is subject to tremendous uncertainty. It varies significantly from play to play, county to county and even well to well.
But in general, producers want oil and gas wells with a large EUR and high IP, because that means they receive more revenue overall, and more of it in the first few months after the well is completed rather than having to wait for years.
Wells cost millions of dollars to drill and fracture, and all the costs must be paid up front, either by the producer using their own funds or with borrowed money. The faster the oil and gas are produced, the faster the costs are covered and the more profitable the well will be.
Well Decline Curves
From a financial standpoint, rapid decline rates are not a problem. What matters is the EUR. But the relationship between IP, decline rate and EUR is fairly loose and notoriously difficult to pin down.
There is some evidence to suggest oil and gas wells that have high initial flow rates tend to decline fastest but yield the most oil and gas over their lifetime.
“In general, wells of small initial yearly production decline more slowly than those of large,” Beal said of conventional fields. But the more barrels per day a well produced in its first year of production, the more it was likely to produce during its lifetime.
Still, it remains notoriously tricky to predict ultimate production accurately from initial flow rates because there is so much variability and the data is not readily available.
(There is a clear data availability bias in much of the published research. Most analysis uses commonly available data on the total number of wells and average daily production for large aggregates, such as whole states, and then tries to draw conclusions about the sustainability of shale production, even though such numbers are not really relevant.)
For individual wells and plays, forecasters use “decline curves” based on the average of past experience to estimate how much oil and gas a well might eventually produce.
Even so, the forecasts can be out by a wide margin. “Estimates of future production based on the first few months of initial production can differ significantly from later estimates for the same well,” according to the U.S. Energy Information Administration (EIA).
For example, one well examined by the EIA was predicted ultimately to yield 574,000 barrels of oil based on the first year of monthly production data, but that was later slashed to just 189,000 barrels once four years of data was available.
In another case, an initial EUR of 105,000 barrels based on 12 months of production data was raised to 224,000 barrels based on four years of data.
In general, however, it is possible to make a reasonably stable and accurate forecast of EUR after about three years, when almost all wells will have produced more than half their eventual output, according to the EIA (“U.S. tight oil production: alternative supply projections and an overview of the EIA’s analysis of well-level data”, April 2014).
Productivity Boom
There is plenty of evidence that oil and gas production companies are improving productivity and extracting more oil and gas from each shale well.
The EIA analysed EURs from more than 5,000 wells drilled into the Eagle Ford shale formation in Texas . The average EUR was almost 170,000 barrels, but it has been rising, with wells drilled in 2012 (191,000 barrels) and 2013 (169,000 barrels) far more productive than wells drilled near the start of the play in 2009 (57,000 barrels) and 2010 (117,000 barrels).
There is enormous variability in the play, with wells in DeWitt county expected to average 334,000 barrels compared with 226,000 in Karnes and 80,000 in Webb. Even in DeWitt, EUR varies from 98,000 barrels (25th percentile) to 440,000 (75th percentile).
But across the United States there is a clear trend of rising average EUR from shale wells.
Productivity improvements can be traced to several factors. Shale producers are drilling and fracking longer laterals, increasing the amount of shale accessed by each well.
Through a combination of trial-and-error and better seismic work, drillers are increasingly able to target the highest-yielding parts of shale plays, improving average recovery factors and minimising the cost of drilling subpar wells.
Other productivity improvements are in the pipeline. In most sedimentary basins, including North Dakota’s Bakken and West Texas’s Permian, there are multiple oil- and gas-bearing formations, layered one on top of another like a stack of pancakes. The most advanced drillers are experimenting with wells that have several laterals at different depths to produce from different formations all from the same surface hole.
Well-spacing is another area where improvements are being tried. Minimum spacing is set to ensure two wells do not communicate with one another underground (drain the same part of the formation). But the minimum gap between wells is being reduced to cover the whole shale formation more completely as producers learn more about how big an area each well drains.
Individual shale wells are therefore becoming more productive, and plays are being exploited more efficiently and completely. And there are good reasons to think that the shale revolution is still in its infancy, with scope for further efficiency as current best practice is applied more widely.
There are also plenty of other shale plays in the United States, and internationally, with subtly different geology, which makes them harder to produce at present, but which might be brought into successful production with comparatively minor innovations.
For all these reasons, the shale boom are not about to bust any time soon. As long as the oil is needed, and prices remain fairly high, shale production is set to grow.
For Niger Insurance Plc, the future growth trajectory of the company lie in refocusing its business strategy towards retail and micro-insurance segments of the market in view of the stiff competition and unsteady nature of government/corporate businesses.
Alhaji Bala Zakariya’u, the Chairman of Niger Insurance Plc laid the growth rules bare at the 44th Annual General Meeting (AGM) of the company in Ilorin, Kwara State recently. He also said the company would in the years ahead, re-appraise its investment portfolio to fully maximise earnings and minimise emerging market risks.
He told shareholders that the company is already reaping immense benefits from implementation of its recently introduced Performance Improvement and Organisational Restructuring Project as the speed and efficiency of its service delivery has improved greatly, thus enhancing the company’s ability to add more value to all stakeholders.
“The implementation of the enterprise-wide Information and Communications Technology (ICT) initiative also enabled our business process improvements which gave us sustainable growth possibilities.”
For the financial year ended December 31, 2013, Niger Insurance Plc achieved gross premium income of N10.443 billion as against N10.331 billion recorded in the same period of 2012 while profit after tax stood at N599.472 million compared to N470.176 million in the preceding year.
The Group profit before tax for 2013 was N716.108 million compared to N703.499 million achieved in the 2012 while Group after tax in the year under review stood at N627.425 million as against N776.293 million in the previous year.
According to Zakariya’u, the company is actively looking into the possibility of doing away with any loss sustaining subsidiary to avoid negative impact on its Group performance.
“The company’s Transformation Agenda-New Niger has matured into the basic commitment to greater market share and profitability through integrated marketing approach and strong brand identity. The segmentation of our branches into corporate, retail and special markets should be understood in the context of highly market driven and focused management rather than a class identity programme.”
Looking at the prospect of the industry in Nigeria going forward, the Niger Insurance Chairman said: “The future of insurance business in Nigeria is bright as NAICOM (National Insurance Commission) continue to deepen the industry through various initiatives. Niger Insurance Plc is poised to grow its premium income and profitability in the coming years with the introduction of new products including a flagship Annuity Scheme, travel insurance and other products.”
The biggest and the first ever ICT Centenary Awards in commemoration of the revolutionary milestones in the ICT ecosystem in Nigeria has received the nod of Nigeria’s Minister of Communications Technology, Dr. (Mrs) Omobola Johnson and the Executive Vice Chairman of the Nigerian Communications Commission (NCC), Dr. Eugene Juwah who both described the ICT Centenary Award as a positive development in recognition of individuals and corporate entities that toiled to create the values that are currently being globally celebrated as landmark achievements in the ICT ecosystem in Nigeria.
Dr. Eugene Juwah Executive Vice-Chairman, Nigerian Communications CommissionMrs. Omobola Johnson Hon. Minister of Communications Technology
Other industry leaders that have openly embraced the event include the immediate past EVC of NCC and Chairman of OpenMedia Group, Dr. Ernest Ndukwe; the Director General of the National Information Technology Development Agency (NITDA), Mr. Peter Jack and the Director General, National Identity Management Commission (NIMC), Chris ‘E. Onyemenam. These industry leaders expressed their support for the programme when a delegation of the promoters of the event visited them at different times in Lagos and Abuja.
While receiving a delegation of the ICT Media Initiative, a coalition of all ICT media practitioners (print, online and broadcasting), in Nigeria, the Minister told the team comprising of Messrs Aaron Ukodie (Chairman), Ken Ugbechie (co-chairman), Remmy Nweke (Secretary), Segun Oruame, Bayero Agabi, Olubayo Abiodun and Mrs. Ufuoma ‘Daro that celebrating the achievements in the ICT sector and the individuals who have distinguished themselves is worth the drive and she promised to lend the support of her ministry to the successful hosting of the event.
Though the Minister emphasised that the ICT sector of the Nigeria economy was yet to attain its full potential and expressed the need for all stakeholders, both public and private sectors, to synergise in maximising the opportunities that the nation can derive from the sector, she nonetheless approve of the need to give rewards to deserving players in the ecosystem.
She particularly endorsed the plan by the Media Initiative to confer an Award on President Goodluck Jonathan.
‘Considering what the president has achieved in the ICT sector, he deserves an award’, Johnson said.
While saying that so much has been achieved in the past decade worth celebrating, the Minister advised the organisers of the events to ensure a befitting ceremony worthy of emulation.
Mrs. Johnson also pledged the Ministry’s intervention in the area of capacity building for media practitioners, while acknowledging that the Ministry was also faced with the enormous challenges of skills gap which she hopes to address with numerous hands-on capacity building workshops from where some media practitioners could be embedded.
According to her, the Ministry of Communications Technology is faced with budgetary constraints which will not make it affordable to organise dedicated workshops for media practitioners.
Speaking in similar fashion while welcoming the group to his office in Abuja, Dr. Juwah commended the ICT Media Initiative, a non-governmental organisation, for deeming it worthy to articulate the bold steps that the leadership of the NCC had taken in the last few years to sustain the growth pattern in the ICT sector of the economy.
While throwing the weight of the Commission behind the event, he urged the NGO to continue its positive advocacy campaign on the significant strides that have been achieved by all the players in the ICT sector.
The Director-Generals of both NITDA and NIMC also commended the ICT Media Initiatives for the bold move at rewarding individuals and institutions that have impacted on the ICT for development within the Nigerian space.
“Let me assure you that I am favourably disposed to your programme, and would like to see your conference succeed. It is a good idea to come up with the non-governmental agency, as it will provide a platform for you to seek information, knowledge and consensus.
“I spent 15 years in policy advocacy in this country when I was in the Nigerian Economic Summit Group, so I can see the role of a very good platform where ideas can be vitalised, more so when it is taken from the slogan of the NESG which says, ‘we came to serve’, Onyemenanm said.
“We will explore how we can work with you to have a proper commitment and to develop the capacity building and actualise your aims”, Jack said.
Mr. Jack reeled out a number of institutional initiatives that are in the pipelines by the leadership of NITDA to further boost the on-going efforts to transform Nigeria to a digital society both in governmental inter-relationship and communal interactions. He too emphasised his commitment to avail media practitioners of both local and international support for capacity building that would positively impact the contribution of journalism to national development.
During the separate visits, Mr. Ukodie had informed his hosts that the one -day event which will hold in Abuja comprise of a Conference which shall take place in the day and an Award Ceremony, in the evening.
According to him, the main theme of the conference is: ICT in the Nigerian Centenary: Matching towards a Connected Nigeria.
“We have also slated other sub-themes for discussion. One of the sub-themes is: Broadband, for a connected Nigeria and prosperity. The conference is intended to sustain the current growth and momentum of discourses and actions that would culminate in the cost-effective deployment of broadband. This fittingly complements the efforts of the Federal Government as exemplified by the inauguration of the National Broadband Initiative,” he said.
He said that ICT Media Initiative is a synergy across three entrepreneurial media groups namely the ICT Publishers Alliance (ICTPA) – comprising leading ICT publications; Business and TechnologyNews Publishers Foundation (BTPF) – made up of foremost business and technology publishers, editors and very senior news managers across Nigeria; and Nigeria ICT Broadcast Network (NIBN).
The ground-breaking $60 million Private Placement Offer for the Sealink Project clearly signposts the commitment of various governments and operators in the private sector in Africa to fully utilise the sea to boost inter-African trade through Public-Private Partnership (PPP) initiative. The Investors’ Forum for the offer was held in Ghana, Cote d ‘Ivoire, Cameroon and Lagos with September 30, 2014 as closing date for the offer.
The purpose of the $60 million offer is to raise the funds needed to acquire sea-going vessels for conveying people and cargo across the West and Central Africa coast, as well as spares for the vessels and three month working capital.
Significance of Project
The significance of the Sealink Project was clearly enunciated by Orya: “The Project is under-scored by the growing significance and relevance of trade to global development. Empirical evidence has shown that unlike the other developed regions of the world, Africa has continued to underperform its growth and development potentials, partly due to its low trade volumes, amongst other factors. Although Africa accounts for about 15% of the global population and possesses very rich agricultural and mineral endowments, its contribution to global trade has been low, accounting for only about 3.5% in 2012, as against Europe’s contribution of 35.6%, 31.5% by Asia and 13.2% by North America.
Intra-regional trade is also low and in 2012 stood at 6%, 4.2% and 11% respectively for ECOWAS, Central Africa and the entire African region, in sharp contrast to the European Union’s 50%, 40% in the North American Free Trade Area (NAFTA) and 25% among the Association of South East Asian Nations (ASEAN). This low trade performance bears some correlation with the African development challenges, which have manifested in high unemployment and poverty levels, and therefore deserves concerted efforts of the public and private sectors to remove some of the impediments to free trade and regional integration.”
He stated that NEXIM being Nigeria’s Export Development Finance institution and Trade Policy Bank has been in the vanguard of promoting developmental initiatives targeted at removing trade barriers and enhancing regional integration in Africa, in line with the Transformation Agenda of the President, Dr. Goodluck Ebele Johnathan.
The Impediments
“In pursuance of our strategic objective of deepening intra-regional trade, the Bank has over the past few years sadly noted that this low level of intra-regional trade is largely attributable to the enormous transport/logistics challenges and non-tariff measures faced by traders and shippers, among others.
He said these impediments to trade have made the West and Central Africa intra-regional trade uncompetitive and unattractive, due essentially to very high freight cost, with the regions’ transport / logistics cost being one of the highest globally. This problem leads to longer cargo delivery period due to the trans-shipment arrangements as well as delays / congestions on the road corridors, arising from multiple check points, poor infrastructure and cumbersome documentation, amongst others.”
Orya was emphatic that congestion on the trade road corridor has been compounded by the growth of intra-ECOWAS merchandise trade in the past decade from 4.7 million tonnes to 13.2 million tonnes without corresponding increase in transport infrastructure.
“It has therefore become very imperative for the region to develop its maritime transport system in line with the global trend where over 90% of international merchandise trade is done by sea. This is even more so given the fact that of the 26 countries within the West and Central African regions, only 5 are landlocked while over 80% are coastal countries,” Orya told dignitaries at the event.
The Benefits of Sealink Project
According to the NEXIM chief executive, the Sealink Project would facilitate the realisation of enormous trade-related benefits, such as reduction of non-tariff barriers to trade, elimination of transit corridor issues, reduction of transaction cost to economic operators as well as enhance fiscal benefits to various governments through formal and documented trade. The Sealink would also augment regional infrastructure development and deepen payment system that would enhance the volume and value of recorded trade.
And with the rebasing of Nigeria’s Gross Domestic Product (GDP) and emergence of the country as the largest economy in Africa, the West and Central African region now boast of a combined GDP of about US$1trillion and total population of 460 million people, thus necessitating the development of a virile maritime transport system towards creating a freer, bigger market and attracting investment capital from across the globe.
Future Outlook
“I wish to reassure all stakeholders that though the Sealink Project is conceptualised as a Public-Private-Partnership (PPP) initiative, it would primarily be private sector owned and driven with technical and operational measures that would ensure sustainability and be in accordance with international maritime rules and standards. The Sealink guiding principles among others would be to facilitate inclusiveness for cross border trade among traders, including small, medium and large operators. It will also enhance competitiveness and market access as well as forge greater regional strategic partnerships and new market development.
Orya thanked the Board of NEXIM Bank for its encouragement and unflinching support, while also appreciating the co-operation and support of the members of the National Assembly, especially the Committees on Banking and Marine Transport.
“Our special appreciation goes to the ECOWAS Commission, the Nigerian Shippers Council and the Maritime Organisation for West and Central Africa (MOWCA) as well as the African Development Bank and the Directorate of Technical Cooperation in Africa (DTCA) for their unwavering support and technical assistance for this Project.”
He also solicited for the continuous support and co-operation of all the regional maritime/port authorities to ensure the successful take-off and operations of the Sealink Project.
Indeed—Leadership, Hardwork, Competence, Transparency and Diligence surely have their rewards at the right time.
And for Mr. Roberts Ungwaga Orya, Managing Director/CEO, Nigerian Export-Import Bank (NEXIM), now is definitely the right time to reap from the Sweat of his Labour.
After five years of Transformational Leadership at NEXIM (2009-2014), the Federal Government of Nigeria saw reason to further extend his mandate by another five years for seamless continuation of service to the nation.
As expected, the recent re-appointment of Roberts Orya as Managing Director and Chief Executive of NEXIM has continued to generate positive response from various segments of the economy, especially the non-oil sector, where the Strategic Intervention of NEXIM in the past five years has impacted positively on the fortunes of the operators and contributed to sustainable economic growth.
The re-appointment clearly conveys well deserved VOTE OF CONFIDENCE on the leadership and performance of Orya in the past five years.
Invariably, the Right Decision taken at the Right Time!
Roberts Ungwaga Orya: NEXIM MD Reappointment Letter
“I want Africans buying more American products. I want Americans buying more African products. Even as Africa continues to face enormous challenges, even as too many Africans still endure poverty and conflict, hunger and disease, even as we work together to meet those challenges, we cannot lose sight of the new Africa that’s emerging. Together, we are pledging over $14 billion in commercial deals with African leaders.” –President Barack Obama at US-Africa Business Forum 2014 in Washington D.C.
“We will work with Africa to upgrade and build transport infrastructure to promote connectivity on the African continent. China will step up its investment and financing co-operation with Africa by providing an additional $10 billion in credit to make its pledged credit line a total of $30 billion. We will add another $2 billion to make the China-Africa Development Fund a total of $5 billion.” —Chinese Premier Li Keqiang at World Economic Forum (WEF) 2014 in Abuja.
President Barack Obama delivers the closing remarks at the 2014 U.S. Africa Business Forum in Washington DC
Africa is experiencing a new kind of scramble. From the geo-political scramble over a century ago that effectively carved up the continent into various nations for European occupiers to the current economic scramble mainly between China and the United States. While the earlier scramble was for territorial gain, the new scramble is to control the pocket and wallet of Africans.
For decades, economic policy-makers in US ignored and handed the economic potential of Africa to its European allies such as Britain, France, Germany and Italy. Unfortunately, the inability of its European partners to fully harness the emerging business opportunities in Africa, left the door wide open for China to stroll in and become a dominant player. Today, the US is gasping for breadth to catch up with the Chinese.
The AID War
The first step in the economic war was in provision of development aid or assistance to nations in the continent.
According to available records, in the three years (2010-2012), China provided $14.41 billion in Official Development Assistance (ODA) or an average of $4.8 billion per year to Africa thus:
• 7.26 billion yuan ($1.17bn) of interest-free loans
• 32.32 billion yuan ($5.21bn) of grants
• 49.76 billion yuan ($8.03bn) in concessional loans (you hui dai kuan)
These figures do not include additional funding (over $1.3 billion) provided through the United Nations (UN) and various multilateral and regional development banks over this period. Africa also accounted for 51.8 per cent of all ODAs by China in the period of 2010-2012.
China is also still providing debt relief in Africa. Nine countries: Tanzania, Zambia, Cameroon, Equatorial Guinea, Mali, Togo, Benin, Cote d’Ivoire and Sudan, had 16 mature interest-free loans cancelled, for a total of 1.42 billion yuan ($229m).
At the US-Africa Business Forum, the US pledged $12 billion in its signature Aid Program to Africa, especially to Power Africa. US officials said the deal seeks to address the severe shortage of electricity on the continent, which has crimped industrial growth and even kept children from studying at night.
A major policy difference between China and US is that while China is ready to offer interest-free loans, the US is more likely to direct African nations to the International Monetary Fund (IMF) on raise loans to mitigate their trade deficits.
Many policymakers in Africa believe that such interest-free loans, longer repayment periods and large infrastructure projects financed by China usually tilt African nations towards China more than the US.
Investment & Trade
In terms of Foreign Direct Investment (FDI), China also seems to act faster and more robust that the US in terms of response, ease of processing and scale of funding. It is pumping $30 billion in credit lines and another $5 billion through the China-Africa Development Fund.
For instance, in 2013, China made business history in Africa through its $4.2 billion acquisition of equity in ENIs Mozambique assets, which Lucille Quilter, Deals Analyst at Thomson Reuters, described as “not only the largest Sub-Saharan African deal of 2013, it is the biggest energy deal in the region and China’s 2nd largest investment in Africa of all time.”
In trade, China also trumps the US, exporting goods & services to Africa worth $109.1 billion in a recent study compared to $90.5 billion by the US, representing mere 1% of its global export trade.
And for the U.S., the 2014 US-Africa Business Forum in Washington provided a great opportunity between Obama and African leaders to dialogue and later unveiled $14 billion in commercial deals, part of a campaign to improve on a trade relationship in which the two parties still do little business together.
Indeed, current records suggest that only about 1% of U.S. exports go to Africa, and “we have to do better, much better,” President Barack Obama told African and American business leaders at the Forum.
“I want Africans buying more American products. I want Americans buying more African products.”
The $14 billion in new deals between US and Africa will centre on areas such as clean energy, aviation, banking and construction. The White House also announced that the U.S. government would provide $7 billion in new financing to promote trade and investment with the continent while Obama also signed an Executive Order creating an Advisory Council focused mainly on Doing Business in Africa.
The opening ceremony of the Fifth Ministerial Conference of the Forum on China-Africa Cooperation is held in Beijing, July 19, 2012
Many US and African business leaders believe the corporate commitments reflect a broader effort to catch up with other countries doing business on the continent, namely China, now Africa’s leading trading partner.
But Obama’s body language at the Forum signaled a major shift in US policy towards Africa, saying:
“Even as Africa continues to face enormous challenges, even as too many Africans still endure poverty and conflict, hunger and disease, even as we work together to meet those challenges, we cannot lose sight of the new Africa that’s emerging.”
A major plank of US trade policy in Africa has been the African Growth and Opportunity Act (AGOA), which provides exemptions on U.S. tariffs and quotas and aims to boost trade and stimulate the economies of sub-Saharan African countries.
However, the success or failure of the AGOA initiative depends on the personal perspective of many African business leaders. Some said it succeeded while others called it a grand failure.
US Corporate Initiatives
Additionally, some of America’s biggest companies are also stepping up their efforts on the continent.
• Coca-Cola said it plans to spend more than $5 billion in Africa over the next six years, lifting the U.S. beverage giant’s proposed investments in Africa to $17 billion for 2010 to 2020.
• General Electric said it would invest $2 billion in Africa by 2018, where its operations generated more than $5 billion in revenue in 2013.
• Procter and Gamble is investing $300 million in a new manufacturing plant near Lagos, the commercial hub of Nigeria, Africa’s most populous country and largest economy.
Still, African leaders say American interest in Africa has remained tepid.
Tanzanian President Jakaya Kikwete said many trade delegations to the U.S. in the past have failed to generate much investment at home, but he expressed hope that U.S. officials talking up the continent’s prospects can change perceptions of Africa.
“We want to move to the next level of investment and trade,” he said. “Africa of today is not the Africa of yesterday.”
Reaping From The Scramble
There is no question that rapid Chinese involvement in Africa was the sole factor driving the new US effort in Africa.
According to US Vice-President, Joe Biden, the question about the continent has changed to “what can we do with Africa,” from “what we can do for Africa.”
But for China, the sudden American wake-up effort will only accelerate its deep commitment to Africa in the short, medium and long-term.
For Africa, the challenge would be how to harness and turn the scramble into huge benefits for the economies of the continent.
The Africa Future Outlook
According to Forbes, “the continent’s economic potential is enormous. Africa is home to six of the world’s 10 fastest-growing economies. Its Gross Domestic Product (GDP) is expected to rise six percent annually over the next decade. Real income has increased more than 30% over the last 10 years, and many African governments are making investments in infrastructure, education, and healthcare that are improving millions of lives. Yet investment by U.S. companies in Africa remains too low.”
Chinese rice imports at the Port of Dakar, Senegal
Another report also agreed that six of the world’s 10 fastest growing economies (according to data from the International Monetary Fund for 2001-2010) are in sub-Saharan Africa, and a middle-class of nearly 350 million individuals, rivalling that of China and India, has emerged across the continent.
Moreover, according to the McKinsey Global Institute, by 2020, Africa’s consumers—in areas such as financial services, tourism, telecommunications and retail— are projected to contribute more than five times as much revenue to the region’s economic growth as the natural resource sector.
And the continent’s working-age population will remain young for a long time—the average age on the continent is about 20, roughly 10 years younger than the world average, according to the United Nations.
In essence, Africa remains the Economic Bride of the future and the scramble for her would continue unabated going forward.
The UK Payments Council says that over a million people have registered to use its mobile payments service, Paym, since the service launched in April this year. During that time just over £6.5 million has been sent using the service.
Customers of Bank of Scotland, Barclays, Cumberland Building Society, Danske Bank, Halifax, HSBC, Lloyds Bank, Santander and TSB have been able to send and receive Paym payments since April 29th 2014, meaning the one million users’ milestone has been reached within 100 days of the service going live.
Later this year, Paym will expand further becoming available to more than nine out of ten current account holders.
An increase in consumer awareness and confidence in mobile payments services has also been highlighted. With figures showing that the awareness of mobile payment services amongst consumers increased from 45 percent before the launch of Paym up to 75 percent just a week after the service became available.
Of those already using Paym, 65 percent are confident in its ability to be a safe and secure way to transfer money to family and friends.
All customers need to do is register their mobile number and select the current account they want to receive payments into; then there is no need for the person sending them money to know sort codes or account numbers.
Payment is integrated into the existing mobile banking or payment apps offered by participating banks and building societies, meaning customers benefit from the same security protection when making payments.
Jemma Smith, Director of Communications & Education at the Payments Council said:
“I think that securely paying back friends and family using just their mobile number will become second nature — and we’ll wonder why we ever did anything else. The next big step forward is more banks and building societies joining before the end of the year, and as a result we look forward to millions more people signing up and using the service.”
• Gates Foundation, Better Than Cash Alliance urge Governments to Embrace Digital Financial Services, Offer Concrete Action Steps.
Integrating digital payments into the economies of emerging and developing nations addresses crucial issues of broad economic growth and individual financial empowerment, according to a new report by the World Bank Development Research Group.
The report examines, for the first time, growing evidence from around the world about how digital payments offer immediate benefits for both senders and receivers in developing economies, as well as the ability of such payments to increase citizen access to affordable financial tools.
The report also highlights how digital payments help increase the financial independence of women by moving them from the limitations of a cash-only economy and connecting them with the financial mainstream.
Furthermore, the report concludes that the establishment of digital payments for remittances instead of cash is of enormous benefit to poor people in emerging markets and also contributes to financial development. This could also help address concerns about the transparency and traceability of remittances.
Jim Yong Kim World Bank President
“The benefits of digital payments go well beyond the convenience many people in developed economies associate with the technology,” said Dr. Leora Klapper, Lead Economist at the World Bank Development Research Group. “Digital financial services lower the cost and increase the security of sending, paying and receiving money. The resulting increase in financial inclusion is also vital to women’s empowerment.”
The Better than Cash Alliance and the Bill & Melinda Gates Foundation—which funded the study in support of the G20 Global Partnership for Financial Inclusion—emphasised the clear link between digital payments and the goals of G20 governments means that action should be swift and purposeful.
The two organisations are urging governments, when they meet in November 2014 at the G20 Brisbane Summit, to discuss how they can embrace a broad-based digital financial system as a path to growth, greater participation of women in the economy, and greater access to payments, including remittances.
“Governments have to take the lead and drive digital financial development forward,” said Geoffrey Lamb, Chief Economic and Policy Advisor to the Co-Chairs and CEO of the Bill & Melinda Gates Foundation. “The evidence shows that private sector firms will innovate and citizens will quickly learn to use and appreciate digital payments. But we need governments to establish the vision, the digital platforms and the regulatory assurance to pull the hundreds of millions of currently excluded people into full participation in the modern economy.”
“Governments have the authority to be prime movers on so much of what is needed to advance digital financial development,” “With the private sector as a valuable partner, governments must lead to encourage progress in areas such as regulatory reform, driving electronic payroll payments and digitizing social benefit disbursements.”
The report presents an action plan for governments to adopt to realise the benefits of digital payments.
Godwin Emefiele CBN Governor
Specific calls to action include:
• Digitize government payments and receipts, including social transfers. This creates a foundation upon which the private sector can build, including for person-to-person payments, such as international and domestic remittances.
• Engage actively on the regulatory agenda. Governments need to encourage regulators to enable digital financial services by fostering competition, ensuring consumer education and fostering business model innovation.
• Convene public and private sectors to create a basic technical payment platform infrastructure, across which providers can compete on product development. Public and private sectors can converge around a payments platform, and enable innovation and competition in additional financial services.
• Create an enabling environment that fosters private-sector innovation. Governments need to offer a clear vision and tangible incentives in order to ensure that the private sector is an effective, competitive, transparent, and efficient partner.
• Recognise the role of remittance providers in offering a digital entry point to formal financial services for senders and receivers. Instead of remittances being cashed out, remittances sent to a bank account, e-wallet, or smart card, for example, can go into accounts that support safe saving and also increase transparency and traceability.
“We recognize that while the opportunities of digital payments abound, getting there takes work,” said Dr. Ruth Goodwin-Groen, Managing Director of Better Than Cash Alliance.
“Yet digitizing payments is achievable when a government articulates a clear vision, leads by example and provides the right incentives for the private sector to do what they do best: innovate, develop infrastructure and create products designed to succeed in the marketplace.”
Hunger and malnutrition are pervasive problems that affect millions of people in the world today, especially in developing countries. Although steady progress has been made in recent years—under-nourishment is down 17% from 1992—there is still considerable room for improvement.
According to the Food and Agriculture Organisation (FAO), the Zero Hunger Challenge is predicated on the common belief that with a concerted effort across multiple sectors, we can end hunger in our lifetime.
• Between now and 2050, the global population is projected to rise from about 7 billion to 9.2 billion, demanding a 60 percent increase in global food production
• A total of 842 million are estimated to be suffering from chronic hunger, regularly not getting enough food to conduct an active life
• The vast majority of hungry people—827 million—live in developing regions, where the prevalence of undernourishment is estimated at 14.3%
• In developing countries, almost five million children under the age of five die of malnutrition-related causes every year
• Malnutrition is the single largest contributor to disease in the world
• Severe acute malnutrition affects nearly 20 million preschool-age children, mostly from Africa and South-East Asia
• 1/3 of the developing world’s population suffers micronutrient deficiencies leading to blindness, mental retardation and early death
• 162 million children are stunted ; 99 million are underweight and 51 million are wasted due to acute malnutrition
• The cost to the economy caused by malnutrition could be up to 5 percent of GDP—US$3.5 trillion per year or US$500 per person
• The costs of under-nutrition and micronutrient deficiencies are estimated at 2–3 percent of global GDP, or US$1.4–2.1 trillion per year
Wheat: The World’s Most Important Grain
Today, wheat is grown on more land area than any other commercial crop and continues to be the most important food grain source for humans.
“Evidence of improved governance is seen across Africa, and economic reform initiatives — like the ones enunciated in the Transformation Agenda of President Goodluck Jonathan of Nigeria — have improved market performance, unlocked private sector resources and, consequently, helped to expand the middle class.”
President Barack Obama deserves commendation for instituting a new engagement with Africa. Bringing trade relations to the fore, even if the traditional concerns for security and good governance remain on his agenda, is especially laudable.
For some, the recently concluded U.S.-Africa Leaders Summit represents a fitting recovery from what had appeared as general apathy towards Africa. When finally he decided to broadly engage with African leaders, President Obama looked beyond the traditional model that has been criticized as paternalistic.
In the past, the focus was on dolling out U.S. aid to Africa, in a relationship in which the hand of the giver was always on top. Even more commendable is that, as the U.S. contemplates deepening commercial relationship with Africa, it looked beyond the traditional sector of trading oil and few other extractive commodities.
Nevertheless, Africa commands this new attention. In the last ten years, Africa has significantly shed the image of war and deprivation. Economic growth has been steady, averaging estimated 5 per cent annually, according to the International Monetary Fund and the World Bank. Constitutional democracy has taken root in most African countries. Evidence of improved governance is seen across Africa, and economic reform initiatives — like the ones enunciated in the Transformation Agenda of President Goodluck Jonathan of Nigeria — have improved market performance, unlocked private sector resources and, consequently, helped to expand the middle class.
Africa remains resource-rich. But the new attraction for the continent, especially from China, recognises so much that Africa has to offer and what it needs for further progress. Africa has become more aspirational than it had ever been or even taken to be, aware it has the capacity to give even as it takes from development partners. As a result, a win-win approach is being realised in engaging the African continent.
China has gained the head start advantage over the United States and Europe in commercial relations with Africa this new term. Indeed, as the West loses the momentum for trade with Africa, even so has China pushed its appetite for African economic engagement.
It is an open secret; China’s trade with Africa has been on the increase. It rose from $166 billion in 2011 to $210 billion in 2013. In the same period, U.S. trade with Africa dwindled from $125 billion to $85 billion. Africa has opened the door to China’s knock on the door of African opportunities.
Ngozi Okonjo-Iweala Co-ordinating Minister of the Economy
While this is happening, for debatable reasons, the U.S. beats a retreat. The policy justification for U.S. exit cannot be because of the traditional concerns of insecurity and bad governance. These issues have improved significantly over the past decade. Perhaps, the changing structure of U.S. trade interest, because of increased energy security at home, provides an explanation.
Nevertheless, the $33 billion investment commitment by the Obama administration and U.S. investors in power and other industries during the recent meetings in Washington DC is a commendable reawakening.
There is no doubt that Africa’s trade with the West, particularly the United States, has important and unique values. Well-recognised is sharing of best practices. Even if African leaders had been reticent towards policy prescriptions, the evidence now is that the continent shares the values of representative government, open and transparent policy and economic freedom for the private sector to drive growth and prosperity.
Moreover, the riches of Africa’s diversity accommodate multiple, external players, on the basis that Africans themselves are also investing in the continent and are establishing functional commercial partnerships. Yes, we have abundant natural resources. But even more importantly, we have the population to support production of consumer products. Africa’s demography — about one billion people which comprises a higher youth population — tells that long-term viability of investments cannot be in doubt. In Nigeria, the services sector is now the biggest contributor to our Gross Domestic Product. The opportunities seem boundless.
Because U.S. businesses have largely overlooked African opportunities, and the U.S. press have yet to shed the old stereotypes in reporting the continent (although the European press have made better progress with objective and balanced reporting of Africa), it will be useful to highlight some of the attributes of the African growth story and the investment opportunities.
Nigeria is a fitting example, because of scale, homogeneity of policy around private sector development and commonality of Africa’s aspirations. The Nigerian government protects private investment. One of the ways this is affirmable is respect for contract. Competitive bidding has been the hallmark of licensing and sales of public assets in the country after the last of the military interregna 15 years ago.
This ensures deals are transparent and valid. The reform of the legal and regulatory frameworks has been pursued with vigour since 1999, helping to define engagement, making contracts binding and making rules clearer and less whimsical.
As we affirm at the Nigerian Export-Import Bank, the Nigerian opportunities are not concentrated in oil and gas. At NEXIM Bank, we have identified manufacturing, agro-processing, solid minerals and services as areas of big opportunities; not just for commercial profit, but also for socially impactful businesses through local employment and empowerment.
In these sectors, Nigeria seeks to create opportunities for a vibrant youth population with realistic wage structures. Broader investment in these high growth and job-rich sectors will enhance wealth creation, broader base prosperity and increase demands, in a virtuous cycle.
General Electric is one of the U.S. major businesses that have recognised the business potentials in the infrastructure gap in Nigeria and the bright policies of the Jonathan Administration to harness the potentials. GE is investing in the Nigerian power sector where we intend to increase output five folds over the next decade.
The ripples of substantial progress in meeting Nigerian power sector demands will prove that the country is very well able to grow in double digits for a long time, given current 7 per cent GDP growth at a time industrial activities and enterprises are stifled by power shortage from the national grid.
But in pursuing progress, public investments in infrastructure have been substantial even as private sector investment in power generation and distribution has towered, in contradistinction to when it was zero up till a few years ago. However, more private sector investment is necessary in infrastructure and power to accelerate progress.
Partnerships are working in Nigeria. Public-private partnerships have delivered projects and unlocked potentials. Similarly, private sector partnerships are thriving. GE has been operating in Nigeria through business partnerships with local investors, who themselves are successful, savvy and understand the local environment.
In Washington DC this past August, GE and Heirs Holding led by a Nigerian, Mr. Tony Elumelu, further demonstrated the working of private sector partnerships by deepening relationship with the new deals they announced. Similarly, Africa’s richest man, Aliko Dangote entered project partnership with Blackstone-backed Black Rhino, in a $5 billion investment in infrastructure development.
With policy support from the administration of President Jonathan, Nigerian small and medium scale businesses are growing. They are viable prospective partners to U.S. SMEs who want to invest abroad to generate new businesses and develop new markets.
It is in the area of private sector partnerships that Nigeria will provide the lift for the new commercial engagement of the United States with Africa. Using the familiar proclivity of the Nigerian diaspora to succeed, and the achievements of those in the U.S., the average Nigerian at home is self-motivated to succeed. We have embraced the principle for self-actualisation in business.
Nigerian businesses are successfully raising capitals in the international markets. A number of Nigerian banks and non-financial services providers are multinationals in their own rights, having subsidiaries in several countries in Africa. A few are listed in the London Stock Exchange, the Johannesburg Stock Exchange and in Canada, closer to the United States. These vibrant businesses will help U.S. businesses to quickly gain traction and gain market share as partners.
Nigeria is not just the biggest economy in Africa; it is the regional hub for West Africa. For businesses looking at Africa, Nigeria provides the base for further outreach to cover West and Central Africa. The two sub-regions account for over 400 million population. Intra-regional trade amongst these two sub-regions is significant when we consider Africa’s trade without factoring in extractive commodities. The traditional trade relation is receiving a boost by the efforts of NEXIM Bank to facilitate a private sector shipping company to provide maritime trade links between West and Central Africa.
The Sealink Project is coming to financial close, following investment interests by African investors. This initiative will help remove non-tariff barriers to intra-Africa trade. Moreover, the past five years have witnessed NEXIM Bank’s funding interventions in Nigerian SME manufacturers who now export to West Africa and beyond.
In the short term, a security challenge exists with the insurgency in the North Eastern part of the country. Efforts are being made to contain the threats. Longer-term, the efforts of the Federal Government will come into fruition with its recognition that a society that promotes prosperity through the right combination of investments in its people and infrastructure will remove the desperation and some of the other incentives that drive criminal activities.
Lastly, Nigeria recognises the importance of civil society engagement. Civil engagement has been the hallmark of the administration of President Jonathan which promoted the national conference that recently concluded.
Under the Administration, elections have become more transparent, conclusive and less acrimonious. Opposition parties freely engage, and have criticised the government without any untoward consequences.
It is this civility and democratic ethos that further assures that Nigeria is the place to do business, even as Africa is ready for business.
Roberts Orya is Managing Director / Chief Executive Officer, Nigerian Export-Import Bank (NEXIM)
