A Policy and Regulations Development specialist, TunjiAriyomo, has advised the Nigerian government to seek homegrown solutions to the energy crisis rocking the country.
Ariyomo said the country would achieve rapid economic development should it attain energy sufficiency.
He gave the advise at a Public Lecture organised by the Nigerian Society of Engineers in Akure, last Friday.
He said Nigeria’s energy crisis has worsened with the removal of fuel subsidy by the Federal Government in May, leading to increases in the pump price of petrol.
Ariyomo highlighted four major problems undermining Nigeria’s energy sector, including dependency on oil and gas, inadequate infrastructure, energy poverty, and environmental concerns.
According to him, to end the importation of petroleum products, which, he said, was draining forex and creating job losses, Nigeria needed to build its own refineries based on the technological capacity of Nigerians.
Ariyomo, however, stated that the country has not been able to maintain sophisticated refineries due to lack of capacity saying, “the refineries breakdown always affected us, and our people are simply unable to repair them”.
The expert observed that the USA, China, South Korea, and the UK have functional refineries because they build and operate them with local “knowledge and technical know-how– organic ownership of the technology associated with and incidental to petroleum refineries”.
To build their own refineries, he said, Nigerians must acquire the technical know-how, noting that “our forefathers had commanding control of the technologies with which they refined their palm oil.
“Hence, Nigerians can only fix crude oil refining by acquiring the technical know-how and organic capability to locally fabricate, locally assemble, and locally install all components of refineries leveraging indigenous capability.
“Indeed, once Nigeria and Nigerians own and control the required knowledge, possession of crude oil as a natural gift within its geographical boundary will no longer be an obligatory requirement in the nation’s quest to fix its energy needs and export the surplus. This is what is described as self-sufficiency.
“In simple words, Nigeria must stop seeing imports, or the race to build the biggest refinery procured with technologies controlled by its rivals as the compelling theme of its observations.
“Also, we must stop seeing crude oil itself as the issue here. We must only see it as a means to an end. Knowledge of the sciences behind the processes, competitive and practical application of that knowledge, and the strategic wherewithal to offer the services required to produce the goods and materials needed to drive our economies should be our focus.
“We must deliberately pivot away from a ‘cash and carry’ mindset that has plunged us into a country that is rudderless and unthinking in its approach to solving critical problems”.
Ariyomo also said states should be allowed to generate and distribute power.
“If a country is building a power transmission infrastructure for you, you are its market, especially if you are also doing it with its loan.
“You simply provide needed revenue assurance for its future, with interest. That country would never wish you to learn how to build good refineries, good roads, good power lines, good railways, etc.
“That country would never want you to become self-reliant and begin to build your own refinery, power lines, roads, railways, etc.
“In fact, the country building your road, your refinery, your railway line, or your power infrastructure is actually your strategic enemy. Write that down somewhere. Never forget.
“If we have commanding control of the technical wherewithal to locally fabricate, install, and manage our refining processes, we would automatically have expanded the economic value chain inherent in the entire petroleum product management process.
Nigerians Spend N2.6trn On Data, Airtime In Nine Months
MTN Nigeria and Airtel Africa have revealed that the amount spent on airtime and data by Nigerian telecom subscribers rose to at least N2.59 trillion in the first nine months of 2023.
According to the financial statements of the two telecommunication companies, this amounts to a 32.57 per cent increase from the N1.95 trillion both telcos recorded from both income sources in the corresponding period of 2022.
The increase in voice and data venue was partially driven by rising data subscriptions and the devaluation of the naira on Airtel’s part.
In the first nine months of 2022, Airtel made $1.41bn from airtime and data. When converted at the exchange rate of N461/$ which was obtained at the time, it amounted to N647.71billion.
In the same period of 2023, the company’s income from these two revenue sources amounted to $1.29 billion.
When converted at the exchange rate of N777/$ at the time, it amounted to N1.003 trillion.
On MTN’s part, increasing data revenues continue to fuel the company’s overall revenue growth. Data revenues grew by 36.36 per cent year-on-year, while voice revenues only grew by 10.64 per cent, indicating a rise in the usage of the Internet in the country.
Commenting on this growth, MTN said, “Data revenue grew by 36.4 per cent on increased usage and data conversion in new and existing base”.
The firm stated that data usage on its network grew by 29.1 per cent in the period under review.
It noted that “Data usage (GB per user) grew by 29.1 per cent to 8.6GB, and the number of smartphones on our network increased by 7.6 per cent, bringing smartphone penetration to 53.4 per cent, up 1.4pp YoY.
“Consequently, we recorded a 46.3 per cent growth in data traffic, with the 4G network accounting for 83.7 per cent of the total traffic (up 5.2pp YoY)”.
On its part, Airtel recorded an increase in data usage per customer to 5.9 GB per month. The firm highlighted, “Data revenue grew by 29.3 per cent in constant currency, driven by data customer base growth of 17.4 per cent and data ARPU growth of 12.3 per cent.
“Data usage per customer increased by 23.8 per cent to 5.9 GB per month (from 4.8 GB in the prior period). Our continued 4G network rollout has resulted in nearly 100 per cent of all our sites delivering 4G services”, it stated.
Increased Internet usage because of a rise in video streaming pushed the amount telecom consumers spent on telecom services to N3.86 trillion in 2022.
LCCI Faults FG’s $1trn GDP Projections
The Lagos Chamber of Commerce and Industry (LCCI) has said the macro-economic projections in the Federal Government’s Medium Term Expenditure Framework (MTEF) are not sufficient to achieve the $1 trillion economy target it set to achieve by 2029.
Governor of the Central Bank of Nigeria (CBN), Mr Yemi Cardoso, had last weekend restated the commitment of the government to realising the GDP target.
Reviewing Cardoso’s statement, the Director General, LCCI, Dr Chinyere Almona, explained that the basis for government’s projection contains some inconsistencies that will make it unachievable.
She said, “LCCI is aware of the enormous challenges and the uphill task before the CBN in ensuring macro-economic stability and restoring investors’ confidence.
“However, we note the inconsistencies between the Federal Government’s vision of achieving a $1 trillion economy in the next six years and the MTEF.
“The macro-economic projections in the MTEF state that the economy will grow by 3.76 percent 4.22 percent, and 4.78 percent in 2024, 2025, and 2026, respectively. We note that the projected growths are sub-optimal to achieve a $1trillion GDP by 2029, which implies an average growth of 21 percent over the next six years”.
Almona commended the CBN’s plan to review the minimum capital base of banks, but cautioned the apex bank to strengthen its banking supervision to avoid “too big to fail” banks.
She, however, said, “The Chamber appreciates the intellectual humility of the Governor in admitting the errors or mistakes of the past, particularly in the areas of corporate governance failures, diminished institutional autonomy of CBN, deviation from the core mandate of the bank, and unorthodox use of monetary tools and foray into fiscal activities under the cover of development finance activities.
“As we advance, we challenge the current CBN team to ensure professionalism and integrity and rebuild the trust of the general public.
“On recapitalization of banks, we commend the plan of CBN to review the minimum capital base of banks due to consistent devaluation of the Naira, which has eroded the capital base of banks, attracted significant investment into banks, as well as increased the capacity of banks to provide the required support for the economy.
“However, we caution the CBN to strengthen its banking supervision to avoid “too big to fail” banks.
“Given the sensitivity of monetary policy and price stability, we urge the CBN to ensure transparency and synergy between monetary and fiscal authorities and effectively communicate significant changes in policy direction”.
By: Corlins Walter
Firm Urges FG To Attract Foreign Investment
Multinational professional services firm, EY has advised the Federal Government to improve on its investment attractiveness as a way of building on previous year’s fortunes.
Senior Partner and Head of Markets, EY West Africa, Ashish Bakhshi, while sharing insights on a newly released report on Foreign Direct Investments for 2022, said Nigeria needed to improve on FDIs to achieve the ambitious targets it had set for itself to reduce poverty and build a sizeable middle class by 2030.
“Africa’s leaders will need to adopt pragmatism as they respond to a new geopolitical world order so that its member states can optimize the full spectrum of inbound investment opportunities, which will be essential in meeting Africa’s aspirations for a more equitable, wealthier and urbanised middle-class society”, the report read in part.
It stated further that “Last year saw Africa’s return as a top investment destination hub for global investors. The continent had struggled to attract investment since the onset of COVID-19 and took longer than other regions to recover, as a result of its delayed vaccine rollout and therefore its ability to reopen its 54 national economies.
“To this, its growth lagged pre-pandemic levels for longer than it did in mature markets, setting back the ambitious targets it had set for itself to reduce poverty and build a sizeable middle class by 2030.
“The new report, released by EY, a global multinational professional services firm, uncovered that FDI attracted more than 730 projects across the continent in 2022, injecting $194 billion in capital and creating 154,000 jobs.
“Significantly, Egypt saw a record of $ 107 billion in capital for its 149 FDI projects. In East Africa, Kenya dominated the FDI landscape while Nigeria was the leading country in West Africa.
“The countries came in third and fourth respectively for the largest FDI regions on the continent”.
The EY’s 13th Africa Attractiveness report tagged “A Pivot to Growth”, provides insights into the continent FDI, exposing that the 2022 calendar year saw a strong FDI rebound, led by Renewables inflows, with the West being the largest investor, while the North and Southern hubs of Africa were key beneficiaries.
A notable highlight of the report shows that CleanTech became the largest FDI recipient sector in 2022, leading Africa’s FDI for the first time.
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