By Omololu Ogunmade

Nigeria — All things being equal, Nigeria will cease to import petroleum products and totally depend on its own refined products from 2019, the Minister of State for Petroleum, Dr. Ibe Kachikwu, disclosed this wednesday.

Kachikwu who made this disclosure while briefing State House correspondents at the end of the weekly Federal Executive Council (FEC) meeting at the Presidential Villa, said already, a steering committee headed by him and another technical committee had been constituted to fine-tune the process.

Kachikwu, who also said the council approved a new policy document on the operations of petroleum sector, further disclosed that a gas policy had earlier been approved by FEC three weeks ago to serve as the bedrock for Nigeria’s change of status as an oil producing nation to a gas producing country.

However, he said the new 100-page petroleum policy approved yesterday consisted of plans for the reorganisation of the Nigerian National Petroleum Corporation (NNPC) with a view to achieving efficiency and accountability; address salient issues in the Niger Delta; guarantee stability and consistency in the oil sector, and aid cash calls.

“Today, we took to council a Nigerian petroleum policy document. As you are aware, three or four weeks ago, we also considered the Nigerian Gas Policy. The essence of that gas policy was to focus increasingly on how to change the imperatives of seeing Nigeria as an oil producing country to a gas producing country because we are a lot more privileged to have gas than we have oil.

“Today’s document focused on oil. What are the imperatives for changing the policies in the oil sector? It dealt with certain fundamentals and some of the policies that we had already begun to pursue now crystalised in FECpolicy memo. For example, we are working assiduously to exit the importation of fuel in 2019. It captured the cash calls change which we have done which enables the sector to fund itself through incremental volumes.

“It captured the reorganisation in the NNPC for efficiency and enabled accountability. It captured the issues in the Niger Delta and what we needed to do as a government to focus on stability and consistency in the sector. It is a very comprehensive 100-page document that deals with all the spectrum in the industry. The last time this was done was in 2007 and it has been 10 years and you are aware that the dynamics of the oil industry has changed dramatically.

“Apart from the fluidity in pricing and uncertainty in terms of the price regime in crude oil, we are pushing for a refining processing environment and moving away from exporting as it were to refining petroleum products. That’s one change you will see. Secondly, how we sell our crude is going to be looked at. There is a lot of geographical market that we need to look at, long term contracting and sales as opposed to systemic contracting that we have been doing.

Those are the fundamentals. It is a document that if well executed, it will fundamentally take the change process that we began in 2015 to its logical conclusion hopefully in the next couple of years,” he said.

Giving a detailed breakdown of the planned stoppage of fuel importation soon, Kachikwu said 2019 timeline had already been set for the agenda and government was working assiduously towards meeting the target.

According to him, both the steering committee which he heads and the technical committee headed by the Chief Operating Officer of the NNPC, had had a series of meetings with individuals whom he said were prepared to invest in the project.

The minister said the plan was neither about the sale of refineries nor their concession but rather a financing scheme in which he said some groups would build the refineries while others would finance them, pointing out that at least 30 persons had already indicated interests in the financing scheme.

Kachikwu also disclosed that as a result of efficiency in the management of the oil sector, the daily consumption of fuel which he said used to be 50 million litres per day when he came on board in 2015 had now drastically dropped to 28 million litres per day.

“In terms of the specifics, what a policy document does is that it gives you a general guideline in terms of where you are headed, then you go into the specifics in other separate documents for the purpose of execution. If you take the 2019 timeframe for refinery for instance, it won’t tell you what I’m doing today but will tell you that I have set a timeline to exit importation and to get the refineries working by 2019.

“But if you ask me specially off the shelve, what are we doing on that? There is a steering committee already in place which I head. There is a technical committee team already set up headed by chief operating officer in NNPC. We have had series of meetings with individuals who are willing to put money into the refineries.

“I need to state this clearly. This is not a sale. This is not a concession. This is a financing scheme and there are over 30 people who have indicated interest in that financing. They are going to go through the usual due process mechanism to see who qualifies for that financing. What we have resolved however, which we have at least had a landing on is that each of the refineries would be repaired by the individual company that built the refinery.

“Who does the work is different from who does the financing. We are still dialoguing on who is going to get the financing opportunity but who is going to get the contracting opportunity to do the work is already decided. If you check the companies that built, I think it is Chioda in the North; Saitem in Warri if I’m not mistaken. I have forgotten the one in Port Harcourt but all of them have reached agreement with us in terms of willingness and readiness to do the work.

“Government is not putting money into this. It is going to be a sector-led effort and they will recover their money through incremental volumes that will arise from the production increase arising from the repairs. We are doing about 30 percent performances on most refineries now. So, if you get them to above 90 per cent template, we are going to use some of the product line to pay for some of the debts and free ourselves from the importation problems.

“All the refineries today repaired do not cover all our consumption. So, we are banking on the fact that some level of efficiency and upgrade will increase the refineries’ capacity. That is one. We are banking on the fact that the efficiency steps we are taking will reduce the consumption. We have gone from the 50 million litres per day consumption when I resumed office down to about 28 million litres per day,” he stated.

Also briefing yesterday, the Minister of Labour, Employment and Productivity, Dr. Chris Ngige, said FEC approved a new employment policy which encapsulates the current realities in the labour market.

He also disclosed that the new wage committee approved by FEC in May was yet to be constituted because some groups such as the organised labour and employment associations were yet to present their nominees.

“Today, the FEC received the National Employment Policy to guide this government. The last employment policy operating in Nigeria was approved in 2002. It is 14 years old and in that same 14 years, a lot of things have changed in the labour and employment industry and market. Things like employment for people with disabilities, decent work programme for people, doing jobs without polluting the environment and other aspects that are just new and contemporary in the labour market.

“So, this policy was reviewed in 2013 with technical assistance from International Labour Organisation (ILO) and the major stakeholders, the employers were involved, the unions, workers and of course, the government to crystalise this document which aims at giving decent jobs to people.”

He said: “Job creation is something that cuts across all sectors. It is multi-sectoral and not limited to even one ministry, not even limited to even the public service alone. The public sector is involved. The private sector is also involved. So, this document seeks to capture all these so that the relevant and affected persons will apply this so that we can apply this and fight unemployment and under-employment together,” Ngige said.

In her briefing, the Minister of State for Budget and National Planning, Mrs. Zainab Ahmed, said the council also approved National Social Protection Policy, which she described as “a framework which seeks to provide social justice, equity and inclusive growth, using a transformative mechanism for mitigating poverty and unemployment in Nigeria.”

According to her, some of the social investment programmes of the federal government such as homegrown school feeding, N-Power, and conditional cash transfers were drawn from the draft of this policy.

“So, what we had done is to submit to council the policy today and council approved the policy that is likely aspirational but which seeks to ensure that every Nigerian citizen has at least the minimum of what is required in terms of human development and human protection,” she stated.

Civil servants will have to wait for an unspecified period before they get a salary increase from the cash strapped government which is working on a remuneration framework being coordinated by the Office of the President and Cabinet.

This was said by finance minister Patrick Chinamasa during the presentation of the Mid-Term Policy Budget review Thursday.

Chinamasa said remuneration and benefits freeze are set to continue pending finalization of the new Public Sector Remuneration Framework.

“The office of the President is coordinating work towards the development of a consistent Remuneration Framework for boards and executive management at state enterprises, local authorities and other public entities that make a call on the fiscus.

“Current remuneration practices, inclusive of salaries, allowances and other perks, bear no relationship to performance across different entities.

“In this regard, a freeze on review of all remuneration and benefits is in place with effect from 1 January 2017 pending finalization of the new Public Sector Remuneration Framework,” Chinamasa said.

Chinamasa added that once the proposed frameworks have been approved, the Office of the President and Cabinet and the State Enterprises Restructuring Agency will assume the monitoring and evaluation role to ensure effective implementation.

In addition, Chinamasa said the wage bill was still too high and the government would continue to have restrictions on hiring and have continuous monitoring and audits to flush out ghost workers to reduce costs.

In 2016, employment costs amounted to US$2.63 billion from January to October, consuming 91 percent of the country’s revenue.

The government is, therefore, set to restrict budget expenditures to US$4.1 billion which represents 28.2 percent of the Gross Domestic Product (GDP).

A general freeze on prices, fees and charges by public entities is also set to continue unless justified and considered on its merits.

According to the minister, this will include charges on water, rates, power, local taxes and environmental requirements among others.

The government has a financing gap of US$400 million with revenue collections amounting to US$3.7 billion and projected expenditures of US$4.1 billion.

By Edwin Okoth

The government is set to let go of its shareholding in Uchumi Supermarkets once the troubled retailer stabilises under the ongoing bailout and restructuring plan.

Trade Principal Secretary Chris Kiptoo yesterday said the shareholding exit will come after the government recoups taxpayers’ funds pumped into the company over the years.

Uchumi is in talks with a strategic partner to pump in fresh capital after years of struggle supported by Treasury bailouts and debt restructuring.

“We are not planning to stay for so long as shareholders of Uchumi, so once it stabilises then we will move on to something else and let it grow on its own.

Winding-up suit

Our focus is simply to see the retailer back in full operations and that all stakeholders are taken care of,” Mr Kiptoo said in an interview.

The government owns a 14.67 per cent stake in the loss-making Uchumi and is the second-biggest shareholder behind tier III lender Jamii Bora, which controls 14.90 per cent of the retail chain.

Uchumi last year survived a winding up suit and is currently banking on a Sh1.8 billion Treasury bailout package, of which only Sh500 million has been released so far. The targeted strategic investor is expected to pump in Sh3.5 billion to help Uchumi better restock its shelves and meet supplier debts and loans to lenders.

“We are not adding our shareholding and we are very keen on due diligence before we disburse funds to Uchumi so that it does not get drowned again. We have a team carrying out compliance checks to assure us when we can release the next Sh1.3 billion,” said Mr Kiptoo.

He said the retail sector, which contributes up to eight per cent of the gross domestic product, had been weakened over time by failed self-regulations, poor management and lack of transparency at the privately-owned supermarket chain.

Uchumi, which had resorted to asset sales to ease its cash position, putting up for sale the Ngong Road branch, Lang’ata Hyper store, and a 20-acre plot in Kasarani — was declared insolvent in May 30, 2006 and subsequently suspended from trading at the Nairobi Securities Exchange.

The retailer was readmitted on the Nairobi bourse on May 31, 2011, having received Sh675 million from taxpayers in a recovery plan fronted by government, and a further conversion of supplier debts to equity.

The latest bailout plan from the government is the second one, underlining the critical role the government has played to keep the retailer afloat.

By Farirai Machivenyika

The Zimbabwe Land Commission is reviewing all land tenure systems in the country to ensure they promote investment and security of tenure. This is contained in the 2016 Zimbabwe Land Commission annual report tabled in Parliament on Wednesday by the Minister of Lands and Rural Resettlement Dr Douglas Mombeshora .

Zimbabwe’s agricultural land is predominantly under communal ownership, while resettled farmers under the A1 and A2 models own land through permits and 99-year leases respectively.

But farmers are facing challenges in accessing loans from financial institutions because the same banks are not accepting the permits or 99-year leases, arguing they are not adequate to guarantee provision of loans.

The Commission said during its tours countrywide, most farmers raised concerns on issues relating to land rights and security of tenure, succession and inheritance concerns, especially from widows, and conflicts with mining operations on agricultural land.

The Commission also said it had dealt with 62 disputes from eight provinces between July and December last year.

“The disputes involved the following main issues: land ownership, double allocations, sharing farm infrastructure, illegal settlers, boundary disputes, ownership of land upon divorce and inheritance, settlement by persons in grazing land, conflict of shrines and cultural areas, and lastly disputes between former farm owners and newly resettled farmers,” said the Commission.

The Commission raised concern on inadequate budget allocations after Treasury failed to allocate any funding for the envisaged land audit.

“The Commission compiled a bid for 2017 and came up with a budget request of US$24,3 million of which $16,3 million was for the comprehensive land audit programme, $5,1 million for recurrent expenditure, $2,9 million for capital expenditure and employment costs of $1,7 million,” reads the Commission’s report.

“The Commission was given an expenditure target of only $580 000 to cover $440 000 recurrent expenditure and $140 000 for capital expenditure. This resulted in a massive shortfall of $23,8 million, including the $16,3 million for the land audit of which no allocation whatsoever was made.”

By Tawanda Mangoma

Zimbabwe is set to become a regional hub for power distribution by 2021 following plans to start construction of a 1 000-kilometre power line next year in partnership with stakeholders from Mozambique and South Africa, an official has said.

Zimbabwe Electricity Transmission and Distribution Company (ZETDC) systems development manager Engineer Ikhupuleng Dube said the establishment of the power line would result in the construction of a mega power station in Triangle, that would distribute power to the region.

Addressing stakeholders, who included villagers, businesspeople and politicians at a consultative meeting in Mwenezi on Wednesday last week, Eng Dube said the power line would originate in Mozambique, pass through southern Zimbabwe and ends in South Africa’s northern Limpopo Province.

“We are rolling out construction work for a 400KVA power line with maximum capacity of carrying 1 740 mega watts,” he said.

“We are seated at the hub of the region, meaning power has to come through Zimbabwe and we are now establishing a super grid so that power from the north, east, west and south comes to Zimbabwe and then we distribute it to where it would be required.”

Eng Dube said construction work for the power line would start early next year. “In line with that, we are developing projects like Zisavona and Mozisa, which we are speaking about here,” he said. “On Mozisa, we are finalising technical studies by September this year and we hope to finish the Environmental Studies in 21 days.

“We are also doing financial structuring together with our partners who will be using the line, so that actual construction work can start early next year.”

Eng Dube said the project would be funded by the Development Bank of Southern Africa to the tune of $244 million. “We anticipate finishing construction work by 2021 because the longest area to be constructed will be in Zimbabwe,” he said.

“The line will be done in phases. First, we have the Orange Grove (Mozambique) to Triangle and that one has already gone to tender, selected a contractor and we have carried out contract negotiations.

“The second leg is between Triangle and Njelele in South Africa. We are finalising preparatory work. From Orange Grove to Triangle, we are talking about $134 million and a massive substation will be constructed in Triangle.

“As from Triangle to Njelele, we will need about $110 million.” Eng Dube said the project would result in some communities being resettled to pave way for the construction of the power line.

He said those affected by the construction of the power line would be compensated.

“In line with this ambitious project of building a 1000-km power line originating from Northern Mozambique, a corridor of 60 metres in width is required,” he said.

“We are going to compensate fully all those who will be affected by this development. “We will build houses, drill boreholes and compensate those whose farming activities would be interrupted during the actual construction work.”

Eng Dube said employment opportunities would be reserved for those in surrounding communities.

He said Zimbabwe was now working towards having power reserves.

ANALYSIS

In November 2016 a sorrowful Brian Molefe announced he would resign from Eskom “in the interests of good corporate governance” after the Public Protector proved just how chummy he was with Gupta Inc. Three months later Molefe received a controversial R30-million golden handshake… err, performance bonus. No, make that a pension fund payout. Because Molefe – Eskom’s CEO at the time – got retrenched. Or resigned. Took early retirement? No, was on unpaid leave. Yeah, we all got lost in the absurdity that stopped short of maternity leave. Thanks to a series of emails and documents leaked from the heart of Eskom, SCORPIO now clears the confusion. By PAULI VAN WYK.

Brian Molefe’s resignation “in the interests of good corporate governance” on 11 November, 2016, was a lie.

Newly leaked emails indicate that Molefe started planning the feathering of his retirement nest at least as early as a year before, in November 2015 – two months after he was employed by Eskom on a fixed five-year contract.

By Bassey Udo

The Nigerian economy is gradually coming out of recession, with the annual inflation falling in June for the fifth straight month, the National Bureau of Statistics said Monday.

The bureau said inflation, measured by the Consumer Price Index, fell to 16.10 per cent, lower than 16.25 per cent rate recorded in May.

“The latest index represents the fifth consecutive decline in the rate of inflation since January 2017,” the statistics agency said.

The index reflects the average change over time in prices of goods and services consumed by people for day-to-day living.

On a month-on-month basis, the NBS said the index was 0.30 per cent lower than 1.88 per cent recorded the previous month.

The report noted that the price movement reflected the eigth straight month of decline in the core index since November 2016.

The Urban index rose by 16.15 percent (year-on-year) in June 2017 from 16.34 percent recorded in May, while the Rural index increased by 16.01 percent in June from 16.02 percent in May.

On month-on-month basis, the urban index rose by 1.60 percent in June from 1.84 percent recorded in May, while the rural index rose by 1.57 percent in June from 1.92 percent in May.

The corresponding 12-month year-on-year average percentage change for the urban index increased from 18.88 percent in June to 18.69 percent in May.

Corresponding rural index also increasing from 16.50 percent in May to 16.56 percent in June.

Further review of the latest report showed that the Composite Food Index rose by 19.91 per cent during the month.

The rise was as a result of increases in prices of meat, bread and cereals, fish, potatoes, yam and other tubers, oils and fats, milk, cheese and eggs, coffee, tea and cocoa.

The highest increases were recorded in prices of solid fuels, clothing materials and other articles of clothing and clothing accessories, liquid fuels, spirits, books and stationeries, passenger transport by air, garments, shoes and footwear and motorcycles.

The average 12-month annual rate of rise of the index was at 16.22 per cent for the 12-month period ending in June 2017, about 0.35 per cent points lower from the 12-month rate of change recorded in May.

By Amindeh Blaise Atabong

The Minister of Public Works has assured the Vice President of the construction company that all is being done for the clearing of PK40 to PK60 lane of the first phase of the project.

The Minister of Public Works, Emmanuel Nganou Djoumessi has assured the Chinese company executing the first phase of construction works of a double-carriage (express) road between Yaounde and Douala, that Government is taking its responsibilities to indemnify locals along the Kilometric Point (PK) 40 to PK 60. The Minister gave the assurance, Wednesday July 12, 2017, in Yaounde, during an audience with Liu Dongyuan, visiting Vice President of the China First Highway Engineering Company (CFHEC); the company executing the giant project.

During the audience, it was observed that work had been smoothly going on between 0 and 40 mileposts, but for the remaining 20 mileposts which all constitute the first phase of the project to link the economic capital Douala to the transit city of Yaounde for sub-regional corridors. Nganou told Liu Dongyuan that measures were already being taken to address the issue. “We will put across a correspondence to the Governor of the Centre region to sensitize the people along PK 40 and PK 60, so that you [CFHEC] can take advantage of the approaching dry season to push on with work,” Nganou noted.

CFHEC officials manifest their interest in executing the second phase of the project. They equally made a request for the government of Cameroon to disburse the ninth component of the project funds so that it could spur the Exim Bank of China to release the other component of the funds.

J’aime