More than 130 power transmission projects were stalled between 2002 and now due to lack of fund, the Deputy Managing Director of Transmission Company of Nigeria, TCN, Dr Atiku Abubakar, has said.

He said 30 of the stalled projects had been identified to be in need of urgent attention.

Atiku, who spoke on Tuesday during inspection of some of the ongoing projects and a training exercise of some auditors in Lagos said his company was on the verge of reviving some of the projects to achieve the dream of effective and uninterrupted power supply in the years to come.

He said the TCN has secured the released of some of the abandoned containers with Customs Service and have been distributed to respective projects site in Lagos.

He said: “we are making all effort to ensure that fund is raised outside the appropriation of government. We have investors who are ready to come into the country to invest in our schemes.  “We also expects more funding from government to be able to achieve the mandate set for ourselves on improving on the transmission capacity.”

He further spoke on plans by the the federal government to hit 8000 megawatts in 2016, saying Nigeria needs N15 billion annual investment to be able to meet the target.

*Mohammed Shosanya – Daily Trust

Independent producer Tullow Oil reported Wednesday that gas exports from its Jubilee field, offshore Ghana, have resumed ahead of schedule following the completion of work on the gas compressor on the FPSO vessel Kwame Nkrumah.

Gas exports restarted on August 3, more than a week before Tullow’s mid-August deadline, and these have steadily increased to around 100 million cubic feet per day, according to the company.

Tullow also said Wednesday that it is pleased that the governments of Uganda and Kenya have agreed on a route for a regional crude oil export pipeline, noting the agreement as “a major milestone” in an operational update.

Meanwhile, the firm also reported that two wells offshore Suriname and Norway are being plugged and abandoned after they failed to find commercial hydrocarbons.

Tullow CEO Aidan Heavey commented in a company statement: “Tullow continues to make good progress in 2015 having reset the business and with continued emphasis on managing costs, capital expenditure and the balance sheet. We are also focused on operational efficiency and the Jubilee compressor issue has been resolved ahead of schedule. With production back to normal at Jubilee, we expect to meet our full year production guidance.

“Looking forward, we plan to further deleverage the business as we look at non-core assets and our retained equity in our major developments. The decision by the governments of Uganda and Kenya with regard to the pipeline route will allow this significant project to move into a new technical and commercial phase.”

The positive developments at Jubilee and in Kenya and Uganda outweigh the negative exploration news, was the opinion of analysts at London-based investment bank Westhouse Securities Wednesday morning.

“However, the extent of negative sentiment in the E&P sector will probably see pressure on the shares… The reality is that Tullow has transitioned from being an exploration led E&P to a full cycle E&P focused more on production, development and appraisal. We have long argued that investors should focus on Tullow’s ability to deliver production and cash flow growth over the coming three-to-five years, rather than on the exploration portfolio,” Westhouse added.

*Aims to boost foreign reserves with recovered stolen crude funds

President Muhammadu Buhari is set to curtail the role of oil marketers in the importation of petroleum products by ensuring that only the Nigerian National Petroleum Corporation, NNPC, imports petroleum products into the country.

Governor of the Central Bank of Nigeria, CBN, Godwin Emefiele who made this disclosure in a recent interview with Financial Times of London, said the move will reduce the corruption in the fuel importation regime as well as loosen the stranglehold of independent marketers on the industry as they would mainly rely on NNPC for products.

He said, “The president came on board and said that we will work very hard to reduce importation of petroleum products by ensuring that our refineries work. Our refineries are working now. Warri and Port Harcourt have started producing, they have not attained the optimal capacity but they will. Kaduna refinery will start working this month.

“Now, there are other actions that the presidency is putting in place to ensure that we reduce importation of petroleum products where the NNPC will solely, almost solely be responsible for procuring refined petroleum so those who are importing petroleum products will only just need to go to the NNPC and pick up petroleum products.

“So in that area I would say that we are already moving in the direction of reducing the import of petroleum products. And we will achieve it.”

On the president’s efforts to recover stolen oil monies deposited in banks, Emefiele said “As the Central Bank, we will also assist in drilling them once we get to that stage, and we will be happy to have that money back because it will improve our reserves.”

Speaking on President Buhari’s order that revenue-generating agencies operate a Treasury Single
Account, the CBN boss explained that, “once they receive the revenues, the revenues must come to the centre, and that means those revenues will come to the Central Bank of Nigeria.”

“We had instances where some of those revenues were trapped outside the Central Bank. The president came on and he insisted that all revenues come to the centre and that’s what we are saying, and it’s the reason why you are seeing some improvements in the reserves position,” he noted.

Emefiele also commented on the gap between the parallel market and the inter-bank rate.

“The gap is closing and I imagine that foreign investors should be happy that we are doing everything possible to close the gap. Based on that, they will believe us when we say that the parallel market is a shallow market, and that there is no need to use the parallel market as the benchmark for determining the real value of our currency.”

The Powering Africa Ghana Meeting will be taking place on 17-18 September 2015 in Accra 

ACCRA, Ghana, August 10, 2015/ — Ghana’s total demand including export far exceeds available power generation capacity. Current suppressed peak demand is about 2,400MW, however only 1,600MW of capacity is available at peak and 1,400 MW at off-peak leaving a deficit of about 800MW at peak.

H.E. Honourable Dr Kwabena Donkor, Minister of Power for Ghana, announced at AEF in July 2015 plans to push through Emergency Power arrangements to beef up the supply situation. They will add about 1,000MW by the end of the current year and provide the platform to pursue medium to long term solutions. The Ministry is also taking steps to add in excess of 5,000MW generating capacity from natural gas, clean coal and renewable energy sources within the next five years. 

To accelerate investments Ghana is restructuring the Electricity Company of Ghana Ltd (ECG) and the Northern Electricity Company Ltd (NedCo) to deliver effective customer service to consumers and to strengthen their financials to be better off-takers of Power Purchase Agreements. 

The main power generation utility, the Volta River Authority is also being fundamentally altered to respond quicker to the changing electricity landscape. The Government has announced its intention to create two separate entities from the VRA of today. A new publicly owned entity will be carved out of the existing VRA to concentrate on thermal generation in partnership with the private sector actors while the remainder will concentrate on hydro generation. 

The national interconnected transmission network is also being upgraded with the Grid Company of Ghana Ltd (GridCo) investing massively in new 330, 225 and 161kv lines. 

The Powering Africa Ghana Meeting taking place on 17-18 September 2015 in Accra has confirmed a strong delegation of public and private speakers giving participants an insight in to Ghana’s power development plans and highlight opportunities for private sector investors. 

Confirmed speakers to date include: 

Hon. Dr. Kwabena Donkor, Minister of Power, Republic of Ghana

Hon. Seth Terpker, Minister of Finance, Republic of Ghana

Wisdom Ahiataku-Togobo, Director Renewable and Alternative Energy, Ministry of Power, Republic of Ghana

Ing. Kirk Koffi, Chief Executive Officer, Volta River Authority (VRA)

William Amuna, Chief Executive Officer, GRIDCo

Robert Dwamena, Ag. Managing Director, Electricity Company of Ghana (ECG)

Samuel Sarpong, Executive Secretary, Public Utilities Regulatory Commission (PURC)

Magdaline Apeteng, Chief Economics Officer and Director, Public Investment Division (PID), Ministry of Finance

Mawuena Trebarh, Chief Executive Officer, Ghana Investment Promotion Centre (GIPC)

Matty Vengerik, Chief Executive Officer, Quantum Power

Kweku Awotwi, Principal, Africa Power Systems Management

Samuel N. Brew-Butler, Founder and Chairman, CenPower Holdings

Paul Kunert, Head of Business Development, Globeleq
Chris Antonopoulos, Chief Executive Officer, Lekela Power

Jose Antonio Benitez, Vice-president of Business Development & Engineering, So Energy International

Sakkie Leimecke, Head of Energy Finance, Nedbank Capital

Olusola Lawson, Regional Director for Western Africa, African Infrastructure Investments Managers

(AIIM)

Taiwo Adenjii, Director, Investments, Africa Finance Corporation 

Thierno Bah, Principal Energy Specialist, African Development Bank

Benin is the last stop on this two-week road show during which the co-founders unveiled their long-term objective to use solar activities to drive education by introducing connected tablet devices. 

COTONOU, Benin, August 6, 2015/ — Akon Lighting Africa (http://www.akonlightingafrica.com/) concluded its African road show last night in Benin.  The three co-founders, Akon, Thione Niang and Samba Bathily inspected the new street lamps installed in the district of Pahou, near to the capital Cotonou with Prime Minister, Mr. Lionel Zinsou. Benin is the last stop on this two-week road show during which the co-founders unveiled their long-term objective to use solar activities to drive education by introducing connected tablet devices. 

“The solar power we are providing can be used to connect all sorts of devices – telephones to communicate, fridges to keep food so why not to power computers too.  We presented the outline of a new project we hope to launch within the next few months to supply learning devices and to set up smart schools” explained Akon.  “Akon Lighting Africa is an initiative that puts top priority on African development. Access to energy will drive rapid transformations in Africa.  Electrification first, education next” added Thione Niang.   

This stopover in Benin was also an opportunity to review progress on the solar project to date in this country. Solektra International, the main partner of Akon Lighting Africa, is just installing the last of the 1500 solar powered street lamps and 2200 solar kits agreed under the tender it won a few months ago and targeting 124 localities.  “We have already installed over 75% of the equipment and the authorities are most satisfied by the work done by our teams in the field.” explained Samba Bathily, CEO of Solektra. “Benin is a strategic country.  By winning this tender, we have been able to show that our approach is both solid and involves high quality solutions.  We would like to thank the authorities for the confidence they have shown in us.” 

Cotonou was the last stopover of a road show that started with the Global Entrepreneurship Summit on July 24^th and which toured Kenya, Rwanda, Congo-Brazzaville, Nigeria, Niger and Benin. It was an opportunity to have productive discussions, in particular with local agencies responsible for rural electrification, to identify opportunities for deploying the solar solutions proposed by Solektra international. Various authorities have shown interest in this initiative and its proposed ‘prefinancing’ business model.  By multiplying the number of pilot schemes or participating in tenders, Akon Lighting Africa and Solektra International is hoping to quickly achieve its objective to establish a presence in 25 countries by the end of 2016.

Project follows a successful run of more than $2.5 billion worth of booked orders across Africa in the last year

• 100MW wind farm near Nairobi will contribute to installed energy capacity in Kenya
• $2.5 billion in new orders serve transport, aviation, healthcare and energy sectors 
• Deal lands as GE makes substantial progress on its 2014 commitment to invest $2 billion in Africa by 2018

GE Africa (NYSE: GE) announced recently that it is partnering with Kipeto Energy Limited to build a new wind farm in Kenya’s Kajiado County. GE will be the sole equipment supplier for the 100MW project, some 50 kilometres from the capital Nairobi. The local power deal caps off a successful run of more than $2.5 billion in booked orders on the Africa continent across transport, aviation, healthcare and energy sectors.

The Kipeto project, announced during President Obama’s visit to Kenya, is expected to make a significant contribution to the installed energy capacity in Kenya, where up to 80% of the population currently lacks electricity access. The $155 million contract will include 60 GE 1.7-103 wind turbines, as well as a 15-year service agreement.

Kipeto Energy Limited shareholders include Africa Infrastructure Investment Managers (AIIM), Craftskills Wind Energy International Limited, International Finance Corporation (IFC) and the Maasai community of Kipeto. The project will be financed by Overseas Private Investment Corporation (OPIC) as sole lender to the project. OPIC is the US government’s development finance institute and is part of the Power Africa Initiative.

Continued growth across Africa

The Kipeto wind farm project will add to an existing $2.5 billion in orders that GE Africa has received over the past year. These new orders have come from across Sub-Saharan Africa, in transportation, oil and gas, power generation, healthcare and aviation. They have included:

• Oil and Gas equipment for Eni Ghana: The $850 million order incorporates both turbomachinery and subsea elements for the offshore project. The order includes three gas turbines for power generation and four centrifugal compressors. The first shipment is scheduled for the end of 2015 and the project is planned to deliver first oil by 2017.
• Locomotive contract in Angola: GE is to supply 100 locomotives to the Angolan National Railways (INCFA). The contract demonstrates Angola’s commitment to diversify its economy into new sectors such as mining, agriculture and energy.
• Kenya Healthcare Modernization Programme: GE was selected in February 2015 by the Kenyan Ministry of Health as a key technology partner for its wide-scale infrastructure modernisation programme aimed at transforming 98 hospitals across Kenya’s 47 counties. The radiology modernisation contract awarded to GE Healthcare is the largest of seven tranches of Kenya’s ~$420 million health development plan, aimed at delivering sustainable healthcare development, in line Kenya’s Vision 2030 Plan.

Delivering on commitments

In August 2014 GE committed to invest $2 billion in facility development, skills training, and sustainability initiatives across Africa by 2018. The commitment was made during the US-Africa Leaders’ Summit in Washington DC. Substantial investment and progress has been made against those commitments, and this week GE announced its involvement in several new projects in Kenya.

“GE has made significant progress against the investment commitments made last August,” said Jay Ireland, president and CEO of GE Africa. “Skills training and capacity building are critical, not only for developing African economies, but also for growing GE’s footprint in the region. We consider this a major priority.” 

Key progress over the past year includes:

• GE Manufacturing and Assembly Facility in Nigeria: GE has awarded Nigerian construction company, Julius Berger the contract to build its manufacturing and assembly facility in Calabar, Cross River State. Another Nigerian company, Banyan Tree has been contracted to build a training facility at the Calabar site and for the refurbishment, teacher training and curriculum development of the Cross River State Technical College. GE has also commenced fabrication of subsea well heads and refurbishment of Christmas trees at its Onne facility. Upon completion, these projects make up GE’s $250 million capital expenditure investment commitment to Nigeria. This investment is expected to create 2,300 direct and indirect jobs. The Calabar facility is expected to be a regional manufacturing and assembly hub for GE Oil & Gas as well as other GE industrial businesses. The first of its kind site will include training facilities to enable knowledge transfer and career advancement opportunities for local talent.
• Nigeria Biomedical Equipment Technician (BMET): GE Foundation has funded a biomedical training program in Nigeria to equip technicians with the skills to fix devices ranging from blood pressure cuffs to X-rays. According to the World Health Organization (WHO), between 50- 80% of medical equipment is out of service in low-income countries). In partnership with Engineering World Health, 19 students have been trained to date. The goal is to train 60 students by year end 2017.
• Mozambique Graduate Engineering Training Programme: GE has enrolled 20 Mozambican graduate engineers in the company’s Graduate Engineering Training Program (GETP), a “best in class” development program designed to prepare engineers to join GE’s global field service engineering team after successful completion of an intense 24-month curriculum. The engineers concluded phase 1 of the program at the Mozal Artisan Training Center in Maputo, and Phase 2 in South Africa. They have now started a 12-month, on-the-job training program to gain hands-on experience with GE Oil & Gas subsea and rotating equipment products.

“We are exceptionally proud of the progress made against our commitment and the impact these initiatives will have on Africa’s workforce,” Ireland added.

Additional investments announced this week in Kenya include:

• GE Garages skills building programme: GE is collaborating with Gearbox and Seven Seas Technologies to bring its successful GE Garages skills building programme to Kenya to help build a skilled workforce and drive entrepreneurial development in the country. The facility in Nairobi will help students, entrepreneurs, makers and other learn about advanced manufacturing processes, software programming and business development through the use of advanced manufacturing innovations like 3D printers, laser cutters and CNC mills.
• Kenya Healthcare Training Center: As a cornerstone of our healthcare modernization programme, we have announced the GE Healthcare Skills and Training Institute in Kenya. The Institute represents a long-term investment of more than $13 million over the next 10 years. The centre is set to become GE’s first dedicated skills development facility in Africa when inaugurated in Q4 2015. Our goal is to train more than 1,000 healthcare professionals over the next 3 years.
• Round 3 of the Power Africa Off-Grid Energy Challenge: GE Africa, in collaboration with the U.S. African Development Foundation (USADF) and the U.S. Agency for International Development (USAID), have announced the expansion of Round III of the Power Africa Off-Grid Energy Challenge. This third round of the challenge is open to entrepreneurs and energy companies in Rwanda, Uganda and Zambia with a sum total of up to $1.1 million in grants to be awarded. The three-year initiative has extended $5 million and 50 awards to energy entrepreneurs in eleven African countries across the Continent.

“GE’s capability and global expertise in power generation, healthcare, rail transportation, water, oil and gas, and aviation industries allows us to play a significant role as a partner in the development of Africa,” Ireland said. “This expertise also allows us to share knowledge and build skills of local employees in this critical sectors. We have an opportunity and a responsibility.”

A high-level GE delegation, led by Jay Ireland, participated in and hosted events in Nairobi during President Obama’s visit to Kenya for the Global Entrepreneurship Summit.

EMAS Offshore Limited has secured three new awards for charters with oil majors in West Africa and Thailand valued at more than US$24 million.

Offshore which confirmed the development maintained that EMAS Offshore Limited, an established offshore services provider offering offshore support, accommodation, construction and production services to the oil and gas industry, today announced that it has secured three new awards for charters with oil majors in West Africa and Thailand valued at more than US$24 million.

It indicated that in West Africa, EMAS Offshore’s Anchor Handling Tug and Supply vessel will be providing sea transportation services that include towing, performing anchor handling and positioning of rigs and other floating structures for an oil major.

The medium indicated that over in the Gulf of Thailand, EMAS Offshore’s other two contracts are with EMAS Energy, an entity that belongs to the Well Services division of Ezra Holdings Limited.

It stated that one of the contracts is part of an integrated and comprehensive solution for an oil major in Thailand, and is a charter for a Platform Support Vessel, while the other contract is for the provision of an AHTS vessel for a national oil company, both awarded after a competitive tendering process.

The scope of work includes the provision of accommodation, towing, anchor handling and logistics support for oil and gas production platforms, and collectively is worth some US$12 million.

Mr. Jon Dunstan, EMAS Offshore’s Chief Executive Officer, is quoted to have said: “We have a distinct advantage of being able to deploy vessels globally. I am delighted to see that our strategy of focusing our efforts in West Africa where offshore activities remain healthy is paying off.

He is also said to have concluded, “Additionally, the wins in Thailand demonstrate the synergy we have within the EMAS brand to deliver integrated solutions, and are yet another competitive advantage we can leverage, especially amidst market volatility.”

Another first was recorded in the Nigerian Content community on Friday in Port- Harcourt, Rivers State when the Executive Secretary, Nigerian Content Development and Monitoring Board (NCDMB), Mr. Denzil Kentebe commissioned the first 90mm stainless steel clad vessel fabricated in Nigeria by Energy Works Technology Ltd (EWT), a subsidiary of the Nestoil Group.

The asset also known as a separator was designed for Shell Petroleum Development Company of Nigeria Ltd (SPDC’s) Soku Field Development plan and is internally cladded with 316L stainless steel, with internal proprietary separation devices and weighs 83 tons.

Speaking at the event, the Executive Secretary hailed the growth of EWT within the past five years from a light fabrication company to one of the foremost pressure vessel, process equipment manufacturers and heavy fabrication yards in Nigeria.

While pledging the Board’s commitment to help companies like EWT further develop their capacity, Kentebe commended operators especially SPDC, Total and Seplat that put work in the facility and charged other operators to support all service providers that have demonstrated competence and invested in developing their capacity in Nigeria.

Speaking further, the Executive Secretary credited his predecessor, Dr. Ernest Nwapa for laying a good foundation and driving laudable programs, acknowledging that “many of these Nigerian Content successes were birthed before I assumed leadership of the NCDMB.”

He assured that the Board under his leadership will continue to implement already established frameworks and initiate programs that will build on the accomplishments.

He reiterated that investments like the ones made by EWT were critical to achieving the Board’s vision to use Nigerian Content as a platform to industrialize Nigeria and also Government’s aspirations to create jobs and empower Nigerians on the back of oil and gas projects.

He added that the Board “will continue to promote the establishment and utilization of Nigerian facilities and Nigerian owned assets. We will also leverage the Nigerian Content Development Fund (NCDF) to implement Capacity Development Initiatives that will create opportunities in manufacturing, engineering, fabrication, marine, subsea, drilling and well services and all other activities across the value chain.”

In his speech, the Managing Director of EWT, Mr. Emeka Nnadi credited the success of the project to the determination of SPDC, National Petroleum Investment Management Services (NAPIMS) and NCDMB to fabricate the 90mm stainless steel clad vessel in Nigeria even when the capability was novel to local services companies.

“With this achievement, EWT has acquired the technical know-how of forming, assembling, welding and testing all ranges of thick welled pressure vessels,” he said.

The Managing Director also stated that all activities relating to the execution of the project were carried out by Nigerians, which demonstrated that Nigerian Content was viable and its impact on the Nigerian economy was worth the price.

He announced plans by the company to begin motivating and supporting small scale fabricators to attain sophisticated capabilities as growth of this category will have a multiplier effect on the aggregate in-country potential.

As it poised to make Western Region the growth pole of Ghana

By Gilbert Boyefio

The Sekondi-Takoradi Chamber of Commerce and Industry (STCCI), has instituted an Annual Public Lecture to highlight the need for a strong collaboration between the Public and the Private Sectors in the Socio-Economic Development of Ghana.

STCCI is doing this as part of its advocacy efforts to strengthen the cooperation between the two very important sectors of our country.

Speaking at the launch of the public lectures, Ato Van-Ess, Chairman of the STCCI, indicated that discussions at the Lecture are essential and necessary to come up with practical strategies to improve the lives of the people and ensure human security in the region and the country as whole, adding that, “It will represent a tangible step towards amplifying the capabilities of the people of the Western Region and Ghana by creating opportunities that enable them to pursue the lives they value. It is extremely important for the Public and Private sectors to work together to develop a master plan for the purpose of adding value to the abundant natural resources in the Region for the benefit of all.”

Though the Western Region provides most of the country’s resources, development in the region has not been commensurate with its output. Given that the region contains over 80% of the country’s natural resources, the lack of development in the region has also affected the total development of the Country.

Sadly however, after years of commercial production of gold, manganese, bauxite and other mineral resources as well as oil & gas, cocoa, rubber and so forth, the Western Region still experiences the characteristic pattern of distorted growth and general under-development. Particularly, the right business environment that will promote, develop and expand the frontiers of enterprise across all the sectors to bring about industrialization and its attendant economic development that we all aspire for, is not in place.

`Mr. Ato Van-Ess made reference to a UNDP Western Region Human Development report 2013, which confirms this assertion when it states that “a feature of the Western Region is that for the past four decades the region’s contribution to the national gross output and wealth has been significantly above its share in Ghana’s population and labour force.”

The report also observes that the “region’s paradox of plenty or resource curse will persist unless the structural relations between central and regional authorities are revamped and reorganized.”

A clear lesson from the report is that the Region’s prosperity will depend upon skills, knowledge, and enterprise of every citizen for the exploitation of the abundant natural resources and their willingness to collaborate for the greater good of all. Making sustained progress will require that all stakeholders place responsibilities ahead of entitlements, emphasize on human and social development through deliberate and specific development interventions rather than the narrow pursuits of income and status.

Mr. Ato Van-Ess in advocating for a Public and Private sector collaboration, indicate that, “Per STCCI’s principles, we always want to “walk the talk.” We do not intend to make this ceremony a mere “talk show.” We have already set in motion a host of programmes and projects to exhibit our zeal to play our part in ensuring that the Western Region becomes the Growth Pole for the socio-economic development of Ghana.”

STCCI, in collaboration with its affiliates and partners, has created 3 key pillars for the provision of services for its members and the general business community, which include: the provision of mediation and arbitration services for the business community in Ghana. As a result, an Alternative Dispute Resolution (ADR) Centre has been established to mediate business related disputes in the Western Region; the promotion of Health, Safety and Environment (HSE) Culture in Ghana by setting up a basic HSE Learning Centre, which is to address some of HSE related concerns of SMEs participating in the extractive industry. As part of promoting the HSE culture in Ghana, STCCI has launched an international Conference dubbed ‘Ghana Extractive Industry Safety Conference (GEISCon). GEISCon focuses on Health, Safety and Environment by identifying new trends, standards, innovations, risks and opportunities in health and safety in the extractive industry; and the provision of financial services for the business community through the setting up of the Western Chamber Cooperative Credit Union (WESCCU) in Takoradi and Elubo.

The STCCI has also from June 30th 2014 to date, embarked on the following activities in support of the 3 key pillars: joined the International Chamber of Commerce (ICC); with the support of GIZ, STCCI hired a facility at Anaji in Takoradu to set up the HSE Centre; advanced Mediators training with Hamburg Chamber of Commerce; business visit to TAQA Energy to understand their procurement system; procurement seminar with Ghana Gas; held the 1st International safety conference, the Ghana Extractive Industry Safety Conference (GEISCon 2015) at the Atlantic Hotel in Takoradi;  International Labour Organisation (ILO) endorses STCCI as the implementer of the ILO SCORE Training Project for the Western and Central Regions; CEO of STCCI delivers a paper on the Extractive Industry in Ghana at the Houston Global Trade Conference and Expo in USA; with the support of the Australian High Commission and the Queensland University of Australia, STCCI trained a group of 35 HSE Coaches to support SMEs put up their Safety Management Systems; and ILO will STCCI consultants to support SMES in the Western and Central Regions to maintain an international working environment.

The lack of funds issues faced by the Public Interest Accountability Committee (PIAC) will soon be a thing of the past as parliament set to amend the Act that established it in order to ensure that the Committee is adequately catered for.

Established under Section 51 of the Petroleum Revenue Management Act (Act 815), the PIAC is to monitor and evaluate compliance with Act 815 by the Government and other relevant institutions in the management and use of petroleum revenues; provide a platform for public debate on spending prospects of petroleum revenues in line with development priorities; and provide an independent assessment on the management and use of oil revenues.

PIAC since its establishment has been faced with cash matters which resulted in them being kicked out from their Adabraka offices after failing to renew their tenancy agreement; despite assurance by the Finance Minister that funds have been allocated to that effect.

According to Hon Osei Akoto, Member of Parliament for Old Tafo, the current state of the law has left the PIAC at the “Whims and caprices of the Ministry of Finance to the extent that they choose when they can give them funds”.

Commenting on the intended amendment during the second reading of the Bill, the Chairman of the Finance Committee, Hon James Klutse Avedzi, noted that the intended amendment seek to among other things modify section 57 of the PRMA to provide for funding for activities of PIAC which was inadvertently over-looked by the House during the passage of the Act.

The amendment provides that PIAC shall submit its budget on annual program to the Finance Minister for inclusion in the annual national budget.

“The Committee is happy that eventually, the error is being corrected,” he said.

The Finance Committee is however, of the view that considering the enormous responsibilities assigned to PIAC under the Act, there will be the need for a dedicated and sustainable source of funding for its activities.

Despite the provision being made to resource the PIAC, the Finance Committee Chairman, Hon Klutse Avedzi, acknowledged that “The provision, as indicated above, would subject PIAC to the annual ritual of inadequate, untimely and at times non-release of budgetary allocations suffered by MMDAs.

It will also not ensure sufficient resources allocation for PIAC to effectively fulfill its core mandate.”

He therefore recommended that a stronger long-term commitment be obtained to fund PIAC, suggesting an allocation against the Annual Budgetary Fund Allocation (ABFA).

On his part, Hon Alan Bagbin, Majority Leader, pointed out that the amendment being proposed concerning PIAC was not as a result of an oversight or error on part of parliament because the matter came up and was thoroughly discussed.

He said “The Ministry of Finance is not conforming to the spirit of the law but working with the letter.”

By Gilbert Boyefio

“Ghanaians constitute over 70percent of the total employees in the oil and gas industry in Ghana,” disclosed Mr. Kwaku Boateng, Director of Special Services at the Petroleum Commission, in an exclusive interview with Orient Energy Review.

Speaking on the compliance level of the local content law so far, he pointed out that if you look at the overall employment levels across the key companies, the key operators and the key service providers that employs; overwhelming majority of Ghanaians are employed in the industry as compared to the expatriates.

He said in terms of the targets set in the Local Content Law for employment, the country has generally exceeded the target set.

Giving a breakdown to support his over 70percent assertion, Mr. Kwaku Boateng, pointed out that in terms of managerial staff the ratio of Ghanaians as against foreigners is almost 50-50; but with middle level skills and semi skills job it is almost over 90percent Ghanaians.

“If you look at the target on average when all these companies started and compared it to this particular time of their operations in Ghana, and you look at the employment percentage between Ghanaians and expatriates and the target set in the LI (Legislative Instrument) you can see that on the average on employment we have quiet achieve our target,” he noted.

The Commission intends to extend this feat through the creation of a database of prospective Ghanaian professional employees to ensure that as much as possible all positions in the upstream sector in the oil and gas industry are occupied by Ghanaians.

So far the Commission has worked with the Universities, the technical institutions and also various professional bodies to compile the database, which is updated every time new CVs are available. The idea is that this database will be made available to the oil and gas companies that intend to do recruitments as their first point of call.

The database is also to prevent the perennial excuses given by oil companies that they cannot find qualified Ghanaians to occupy positions that have been filled by expatriates.

Increase in in-country spent

Another objective of the law that is on course is the patronage of Ghanaian goods and services.

The local content law, which seeks to achieve the patronage of Ghanaian goods and services, provides that as much as possible in awarding contracts, first preference should go to Ghanaian goods and services.

Mr. Boateng stressed that there are various goods and services along the value chain which can be completely provided in Ghana because the country has the capacity, but admitted that there are others that the country does not have the capacity.

“For the goods and services that we have the capacity to provide to a large extent the operators and service providers procure from Ghanaian companies.

This can be seen in the increased in the in-country spent of contracts awarded to indigenous Ghanaian companies. If you compare from 2007 to about 2013 and from 2013 to 2014 when the LI became operational, the value of contracts awarded to indigenous Ghanaian companies in one year is much several times higher than the value of contracts awarded from the previous years (2007 to 2013), prior to the law.

As of 2014, the total contract awarded to indigenous Ghanaian companies is $600million as compared to the previous four years, which was even less than half of this amount.

This year alone, between the last quarter of last year for the whole CTP development alone (Sankofa and GyeNyame), figures available to us indicate that about almost $1billion worth of contracts have been awarded to indigenous Ghanaian companies out of the total spent of over $5billion, which clearly shows that there is a progressive increase in in-country spent,” he added.

Mr. Boateng however noted that the Commission is not carried away by these figures and intends to dig deeper to find out how much of this money is really spent on indigenous goods and services by the indigenous Ghanaian companies, observing that, “An indigenous Ghanaian company can get the contract but spend the money on goods and services outside the country.

This is why we want to assess the spending chain as to how much was actually spent on indigenous Ghanaian goods and services”.

Another plus for the compliance of the local content law is the increase in Ghanaians participation by equity holding in the industry. The Commission strongly believes that if the oil and gas industry should be a catalyst for economic development, then Ghanaians should play a major role in the industry. And one way this can be done is through Ghanaian participation, ownership, and management of the industry.

Currently the Commission is vigorously insisting that any foreign company that intends to provide any goods and services for the industry must form a Joint Venture (JV) with a Ghanaian company as enshrined in the local content law.

“Since the law became effective in February 2014 if you want to get a contract you must first form a JV. The good thing about JVs is that it affords the locals the opportunity to be part of the management of the company, to own part of the industry and also earn revenue through the payment of dividends. It also helps them to develop their technology and skills.

We are very gratified to say that all the major oil companies have now formed JVs or are now forming JVs,” he said.

But what is the Commission doing to guard against fronting?

Mr. Boateng emphasized that the Commission takes an exception to fronting and frowns on it any form. The local content law makes fronting a criminal offence punishable by sentence and or fine.

He admitted that there is the tendency for some Ghanaians to connive with foreign individuals or companies to deceive the Commission.

Though he acknowledged that it is not an easy thing to prove fronting, he indicated the Commission’s preparedness to do due diligence on the matter to fish out perpetrators and bring them to book.

Also as part of measures to curb the threat the Commission has developed a guideline for forming a JV.

“This guideline has come out with certain criteria that any JV company should meet. We also request a lot of documentations including the shareholders resolution, the board resolution, the dividend policy, company’s regulations, the signed agreements, and even for the company to show how profit and loss will be shared.

We demand audit accounts of the partners, a document showing the role and responsibilities of the foreign company and that of the local company in the management of the organization and the execution of any project they are undertaking.

We investigate their organogram to know those occupying the various positions, and also review the board to know who actually takes the high level decisions.

We have put all these measures in place to ensure that the Commission receives adequate information and documentation to convince ourselves that the Ghanaian partner is not only a passive partner who will be sitting in his bedroom and collecting rent, but actually take part in the running of the business and build his capacity.

All future or new JVs will only be cleared if they meet all the requirement of the guidelines. For the existing JVs, the guidelines will serve as the basis to investigate them to make sure that they conform to the requirement. If we find any evidence of fronting by any individual we will prosecute,” he pointed out.

By Sola Akingboye, Abuja

The Nigerian Electricity Regulatory Commission, NERC has come up with condition precedent to capping of electricity bills estimation being enjoyed by electricity distribution companies, the DISCOs at the detriment of the electricity consumers across the country.

It would be recalled over time, that the discrepancy over poor and irregularities in metering electricity users across various levels of customers, under Multi Year Tariff Order (MYTO) has generated controversies, prompting the Electricity Regulatory Agency, NERC in taking drastic action that will put an end to metering problems in the power sector.

In view of Disco’s negative attitude to metering, NERC noted it has adopted an option worth considering to incentivizing metering which is to place a limit on the ability of a DISCO to arbitrarily estimate consumers who are not metered.

However, the Commission have chosen to issue an Order setting the cap but with an effective implementation date after a moratorium of four months to allow the Distribution Companies to appropriately adjust their metering program.  All estimates being imposed by DISCOs within the moratorium period shall be strictly based on the Commission Billing Estimation Methodology.  As soon as the capping regulation commences, the extant regulation on estimation methodology will be vacated, according to NERC.

Reiterating such yardsticks precedent to its action in making the electricity providers abide by the rules guiding their operation, as regard billing and metering of electricity usage, which the providers have flouted over time; NERC however has re-interpreted the conditions, which was made available to Orient Energy Review in Abuja as follows:

• Condition 41(2) of the Distribution License Terms and Condition envisaged that operational meters should first be installed before connection. It stipulates that: ” Electricity supply to a customer should be effected with an operational meter first being installed”
• Condition 41(6) further states that: “The Licensee shall be responsible for installing electrical energy meters at its own expense and shall be the owner of all installed metering equipment. If malfunction or damage occurs to the meter for any reason that is out of the customer’s control, the Licensee shall repair the damage/malfunction or change the meter as quickly as possible, at its own expense”.

Metering is a critical component of the business of electricity. It serves as the only parameter for quantifying energy delivered and energy utilized by the supplier and consumer respectively.

It would be recalled, in 2012, the Commission set up a Public Review Committee on metering situation in the NESI. The Committee held discussion with consumers, operators and stakeholders in all regions of the country and it was discovered that the position of metering was unsatisfactory. The situation has not improved as there is still an abysmally low level of metering in the NESI.  

As at today, over 50% of all the registered customers are either unmetered or have non-functional. The market has suffered high incidences of revenue loss in the form of; customers who continue to contest arbitrary bills; customers who are reluctant to pay for what they call “crazy bills” and sometimes resort to outright power theft; and customers unwillingness to embrace energy efficiency and conservation

The Commission however came up with a number of initiatives to address this metering gap.

1. Commitment was obtained from the Distribution Companies (DISCOs) for the implementation of an 18-month phased metering plan to bridge the metering gap
2. Introduction of the Credited Advance Program for Metering Implementation (CAPMI) to overcome the problem of lack of funds in dealing with the metering gap.

iii. Generous financial provisions included in the Operating and Capital expenditure budget of the DISCOs in MYTO2 for meter roll out.

NERC also regretted that the CAPMI Scheme has suffered poor implementation in spite of customers’ willingness to make advance payments for meters. Although customers paid for meters, some of the DISCOs did not provide meters as expected to those who paid and others failed to make adjustment in their billing software to make the mandatory refunds, six months after installation of the CAPMI meters.

According to NERC however, the capping decision will have tendency of encouraging DISCOs to accelerate the implementation of metering plans that have been talked about but not implemented before privatization and after taking over the management of the DISCOs.

The court, presided over by Justice Clement Hoenyenugah, said the applicants did not follow the right procedure in the appeal.

The appeal was seeking to overturn a ruling by the Sekondi High Court in October last year that dismissed the MPs’ application for a judicial review of a law they claim restricts further expansion of oil and gas facilities at the Takoradi Port in favor of Atuabo Free Port.

According to the court, Parliament – which approved the 600 million dollar project – is an independent arm of government and any decision to quash what has been approved by the legislative body with the right procedures as per the standing orders cannot be overturned by a court.

In July, Parliament approved an agreement between the government of Ghana and a British company, Lonrho Ports, for the development of an oil and gas free port at Atuabo.

Clause 7 of the agreement bars Takoradi Port from further expanding its facilities for oil and gas until Lonrho builds its freeport, recovers all its costs, and makes enough profit.

In filing their application, however, the MPs – Mr Kwaku Kwarteng, Obuasi West; Mr Kwabena Okyere Darko, Takoradi; Mr Joseph Cudjoe, Effia; Mr Kofi Brako, Tema Central, and Mavis Hawa Koomson, Ewutu Senya, argued that the clause was illegal.

Chairman of the roads and transport committee of parliament, Theophilus Tetteh Chae told Joy News the decision of the court indicates that parliament did a good job on the contract.

“It is an indication of the fact that Parliament has done its job…I believe that this will also give confidence to the Lonrho Group that is supposed to carry out these projects so that their financiers come together to ensure the project is completed on time”, he said.

By Pita Ochai

The Comptroller-General of Customs, Alhaji Dikko Abdullahi, has urged the Nigeria Shippers Council (NSC) to ensure that shipping companies and concessionaires automate their operations to enhance clearance of cargo.

Abdullahi made the call while inaugurating a 10-man Committee on Inland Container Depots (ICD) projects, drawn from the Customs and the NSC in Abuja.

He stressed the need for stakeholders to comply with regulations guiding operations at the ports to enhance effective and efficient clearance of cargo.

“We have to do more in the area of compliance. We cannot operate the ports without the cooperation of the stakeholders, which is the major problem we have now.

“I want to draw the attention of the Shippers Council to ensure that all shipping companies and the concessionaires are automated that is the only way we can enhance the way of clearing cargo.

“The concessionaires have no equipment and we should not shy away from telling the government that these people are not ready,” Abdullahi said.

He said that the terms of reference for the committee include developing a workable roadmap for effective release and smooth flow of ICD bound containers to and from the country’s seaports.

He said that it would develop standard cargo clearance procedures and documentation including Pre-arrival Report (PAR), scanning and effective movement of cargo to and from the ICDs.

Abdullahi added that the committee would recommend applicable software (electronic data interchange) for use and adoption by the ICD operators at the respective dry ports.

Earlier, the Executive Secretary, Nigeria Shippers Council, Hassan Bello, said that the collaboration between the council and customs had brought tremendous achievement in the area of transit cargo. Bello urged other government and private agencies to come together and partner in the area of import operations to drive efficiency.

“This collaboration has enhanced the council and it will evolve a new port holder for efficiency, transparency, clearance and procedures.

“Customs is leading the way among the operators in the port as far as automation is concerned; we have collaborated with customs for a long time but this time we have more productive collaboration than ever before,” Bello said.

He said that the council would build its capacity, adding that it was reviewing the Standard Operating Procedures (SOP) of all relevant port service providers.

Bello said that the council had been mandated to implement electronic cargo tracking, an advanced cargos information services in the country.

He said that the electronic cargo tracking would capture international trade arriving and departing from the port of destination and origin respectively.

Bello added that the tracking note would assist customs in it risk mitigation on imports.

He said that the tracking note would enhance and block revenue leakages in the ports.

The Nigerian Ports Consultative Council (NPCC) has set agenda for the administration of President Muhammadu Buhari on how to reposition and refocus the declining fortune of the Nigeria maritime industry.

Chairman of the Council, Otunba Kunle Folarin at the roundtable on the Maritime sector and the port industry tagged ‘Setting Maritime Agenda for the Attainment of Vision 20:20 20′ held in Lagos said the Nigerian maritime industry had not been able to achieve its goals over the years.

According to him, the roundtable was not to criticize government but to set roadmap for the administration of President Buhari on the maritime industry.

He said, “We are coming against the backdrop of repositioning the maritime industry because in the last 20 years the maritime industry has seen gradual decline. So, what we hope to achieve is to reposition and refocus the industry within the region.

“We are giving a road map and we are the pathfinders. The stakeholders are the owners of the industry. We are the only ones that can tell government what we need. We are the professionals; we are the practitioners. That is why the choice of delegate is deliberate. We want to give government a roadmap to create a pathfinder that will deliver, we don’t want a situation where government will come and act in a vacuum. They will have a document and position that will drive the maritime economy and the industry.”

Folarin said after the roundtable discussion, a policy document would be presented to the government on how to drive the maritime industry.

“There must be a reference and it must come from discussion. There must be a document that will guide the industry. You cannot just create a policy without having to know what the stakeholders want; that is why we are discussing.

“We are trying to build the maritime sector; create a sector that will stand out within the region if not in Africa and beyond. That is what we are trying to do, trying to deposit a roadmap and a pathfinder to the promise land.

“If you look at the table, we have over 500 years of experience on the table; people who have lived all their lives in the maritime sector. That is what we are bringing to the table. It is a very formidable task that we are gathering these men and women in the room. That is what we are trying to do.

“We believe Nigeria is the largest country in both West and Central Africa; we have the largest coastline, the largest economic and maritime potentials but we have not been able to harness the potentials and that is why we are here.

“I can assure you that the discussion will not go through any intermediary. It is going straight to government and whoever represents government will get it.

“The document would be submitted on a fast track to the government. So, it will be submitted on a fast track to the government in the next two months.

“We won’t gather professionals with over 500 years of experience in the maritime industry and the report will at the end gather dust on the shelf of the President,” he said.

Participants present at the round table include the Acting President, Nigeria Shipowners Association (NISA), Alhaji Aminu Umar; President, Shipowners Association of Nigeria (SOAN), Engr. Greg Ogbeifun; former Chairman, Nigeria Maritime Expo (NIMAREX) Planning Committee, Barr. Margaret Onyema- Orakwusi; former Commissioner of Transport, Lagos State, Prof. Bamidele Badejo; University of Lagos Professor of Transport, Iyiola Oni; former Acting Managing Director, National Inland Waterways Authority (NIWA), Mrs. CFO Ezenwa; and former Managing Director, Eastern Ports, Mr. Felix Ovbude.

Others were Chief Executive Officer, Ships & Ports Limited, Bolaji Akinola; President, Association of Nigerian Licensed Customs Agents (ANLCA), Prince Olayiwola Shittu and his counterpart in the National Association of Government Approved Freight Forwarders (NAGAFF), Chief Eugene Nweke; maritime lawyers, Emeka Akabogu and Osuola Nwagbara among others.

By Pita Ochai

L-R: Dr Isaac Jolapamo, former President Nigeria Shipowners Association; Admiral Samuel Afolanya (rtd); Barrister Obi Callistus, Executive Director Maritime Labour and Cabotage Service, NIMASA; Mr. Hassan Bello, Executive Secretary/CEO, Nigeria Shippers Council at the 5th Nigeria Maritime Expo 2015 Conference.

Nigeria Maritime Administration and Safety Agency has called for unity among the divided indigenous ship-owners in the Nigerian maritime sector in order to attract the attention of the Federal Government.

Former Director General of NIMASA  Patrick Akpobolokemi who spoke Monday in Lagos at the 5th Nigeria Maritime Expo 2015 Conference, with the theme: “Regenerating Economic Growth Through the Maritime Sector”, noted that there were serious efforts by the Federal Ministry of Transport to look into the operational difficulties over the implementation of the Cabotage Act.

Represented by Barrister Calistus Obi, Director of NIMASA Carbotage Maritime Labour Service, Akpobolokemi said emphasis was being made on the development of indigenous acquisition of vessels.

“There must be development growth in individual capacity. The ship-owners should unit among themselves and it is only when they unit they can get the attention of the government,” he said

The rank of the indigenous ship-owners has been hit by crisis lately after the election of Captain Niyi Dada Labinjo to succeed Isaac Jolapamo as their leader.

Mr. Hassan Bello, Executive Secretary, Nigeria Shippers Council, in his remark at the event said that Nigeria’s maritime industry needed to be well organized, “the government must consciously step into the industry and provide the environment needed for growth.”

He noted that investors were working under a harsh environment with no power for terminal operators, no good access road to the port and other terminals making clearing of cargos. “Government needs to address some of these issues, to enable the maritime sector make its expected contributions to the national economy. Maritime is the gate way to the economy. If we have good maritime sector, our economy will grow in term of redeployment, infrastructure and we will have to depend on modern transportation, which is the key,” he said.

Mr. Ayo Adedoyin, Chairman, NIMAREX 2015 Planning Committee in his opening speech listed the challenging issues in the maritime sector as funding for vessel acquisition and tonnage building, sundry equipment procurement and ancillaries.

“We must find the trajectory to international funding and effective structuring of maritime banking funding; building developing adequate maritime infrastructural and seeking dimensional approach to enforcing our maritime domain to check economic seepages,” he said.

He said NIMAREX was planned to provide solutions toward enhancing the economic fortune of Nigeria through deliberate and ambitious exploration of huge maritime resources of the country.

By Pita Ochai

In the last 10 years, the Nigerian maritime sector has witnessed both negative and positive developments. Over the years, efforts by subsequent governments to give face to some policies aimed at bringing in the much revenue into the country from the sector referred to as the second largest revenue generation after oil, have so far not yielded the needed fruits.

Nigeria is blessed with a vast coastline of about 853 kilometers, with 200 nautical miles exclusive economic zone, including various types of shipping and other maritime operations, but the maritime sector has been unable to set the nation on the right path towards greatness, given its potential. The country’s economy is largely dependent on crude oil export, which accounts for about 80 per cent of government revenue and 95 percent of foreign exchange earnings.

Nigeria also accounts for over 65 percent of total maritime traffic, in volume and value, into West and Central Africa. This places the Nigerian maritime domain in the position of key destination for international ships, including tankers of all sizes.

According to organised private sector estimates, the maritime industry has the potential of contributing up to N7 trillion annually to Nigeria’s economy. Maritime stakeholders at a workshop with the theme “Economic Regulation in the Maritime Sector” held in Nigeria’s capital, Abuja, on June 29, said the N7 trillion revenue can be generated if the federal government enforces better regulation of the industry.

A former director at the Ministry of Transport and member of the Nigerian Shippers’ Council, Collins Okoroafor, in a presentation at the workshop, reported that Nigeria with over 850 kilometres of coastline had huge economic potentials in the sector. “There are eight major seaports, 11 oil terminals and 128 private jetties. Total cargo handling capacity of Nigerian ports is over 35 million tonnes. Nigeria is very active in international trade – major crude oil exporter, import dependent. This trade is about 85 per cent. Maritime industry has the potential of contributing up to N7 trillion annually to the Nigerian economy,” Okoroafor who also chairs the CEGONET Limited stated.

The fall in oil prices last year forced the federal government to start looking more seriously into alternative sources of revenue to fund its annual budget. The maritime sector was a viable alternative, but the multifarious problems in the sector constitute a setback.

Some of the policies that have not yielded much dividend include the concessioning of the ports, which stakeholders point to as being lopsided. Also, not currently befitting the sector is the Cabotage regime which, 12 years after it was signed into law to empower local industries, has rather made foreign shipping companies smile to the banks, The Cabotage Act of 2003 was designed to lay the foundation for local content in the maritime industry.

Presently, foreigners still dominate the industry, accounting for over 80 per cent. More indigenous shipping companies are folding up in an industry where foreigners are thronging.

Cabotage law, known as the Coastal and Inland Shipping (CABOTAGE) Act, was passed into law in 2003, to among others: Restrict trade along Nigeria’s coastal waters to indigenous operators. Under the Act, Foreigners are only to participate in coastal shipping when there is no Nigerian who has capacity for such jobs. But over the years, foreigners still dominate over 80 percent of the trade, due to misapplication of the waiver clause.

Cabotage law was patterned after the United States of America Jones Act of 1938, which has helped developed that country’s indigenous capacity in shipping. An important annexure in the Cabotage Act is the Cabotage Vessel Financing Fund (CVFF), which is derived from the two percent deductions from all contracts awarded under the Cabotage regime. It was designed to enable indigenous shipping companies acquire adequate tonnage to be able to participate in coastal and inland trade currently dominated by foreigners, who also dominate deep sea shipping.

NIMASA, which is statutorily mandated to disburse the fund, has since 2008 appointed four banks: Skye, Diamond, Fidelity, and Sterling, as Primary Lending Institutions (PLIs) for the CVFF. Under the CVFF guidelines, the beneficiaries must tie their loan applications to a maritime project for which each must provide 15 percent of the project cost, having been pre-qualified by NIMASA, which is made to guarantee repayment. The CVFF has remained an unfulfilled dream of the drafters of the Cabotage Act.

The most glaring indices of failure of the Cabotage Act is the depleted bottoms (fleet) of indigenous ship owners, the mass of unemployed seafarers, the prevalence of foreign interests in the country’s coastal shipping, especially as it concerns rendering of services in the oil and gas sector and in line with the Local Content Act.

Information sourced from the website of the Nigerian Shipowners Association (NISA) shows that over 90 per cent of the 78 registered ship owners are on the brink of extinction as they are virtually submerged in debt. The woes of the local shipping companies were further compounded by banks and other financial institutions constantly menacing to recover monies owed them, after the expiration of the loan tenor.

The indigenous firms’ plight was further worsened by their inability, so far, to access the CVFF lying idle in some banks since 2008.

Cabotage Law of 2003 spelt out four pillars upon which its implementation must rest. They are that: Cabotage vessels must be wholly -owned by Nigerians; they must be registered in Nigeria, must be crewed by Nigeria and Nigerian shipyards must build and repair Cabotage vessels. Between 2004 when the Act came into being and now, successive ministers of transport and Director General of National Maritime Authority (NMA), now NIMASA, have failed to achieve objectives of the law.

Nigeria reportedly loses about N4 trillion annually to capital flight in the shipping sector, since almost 100 per cent of the sea freight business in Nigeria is still done by foreign companies.

Twelve years after it was signed into law, industry stakeholders say so far, it has not lived up to its billing as the performance has been woeful, poor, dismal and nobody will say successful. The Act was designed to help build local content in the maritime sector by empowering indigenous ship owners. The need to make the Act work was the first issue brought before President Muhammadu Buhari by the Nigerian Indigenous Shipowners Association (NISA) immediately he was sworn-in. NISA urged President Muhammadu Buhari to develop the local shipping industry by making the relevant agencies of government to implement the Coastal and Inland Shipping Act of 2003, otherwise known as the Cabotage Act.

The NISA, which has maintained that the indigenous shipping industry was capable of employing five million people, stressed that faced with the fall in price of oil in the international market and fall in the revenue generation of the federal government, the need to pay more attention to the maritime industry to shore up government’s dwindling revenue has become imperative and inevitable.

The Cabotage Act was enacted in 2003 to help develop the local shipping industry by providing an edge against foreign competitors and financial incentives through the Cabotage Vessels Financing Fund (CVFF). The law establishes that no foreign vessels ought to do business in Nigerian waters other than indigenous ships, while offering the local shipping lines the right of first refusal.

However, 12 years later, the Act remained largely unimplemented by the Nigerian Maritime Administration and Safety Agency (NIMASA) and the Nigeria National Petroleum Corporation (NNPC), which are arch agencies for the implementation of the Act, with foreign vessels still lifting oil and doing other trades in Nigerian waters, while the local ships languish in iddleness, penury and battling extinction.

The CVFF, which is about N58 billion also remained unaccessible by the local shipowners, with ripe allegations that the fund might have been abused by its custodians, the ministry of transport and NIMASA. In one of their recent meetings in Lagos, the shipowners agreed to send a proposal to the government of President Muhammadu Buhari on how to enforce the cabotage and raise huge revenue from the maritime industry. At the meeting which was presided over by its acting president, Alhaji Aminu Umar, the shipowners said that the maritime industry remained the best alternative sector to shore up revenue for the federal government to make up for the shortfall from the oil and gas sector.

Aminu Tambuwal, former speaker of the House of Representatives and now governor of Sokoto State, in tandem with the industry stakeholders, expressed concern over what he observed as increasing failures in the nation’s maritime industry.

He was of the opinion that the Cabotage Act, designed to give the maritime industry world reckoning, had failed to generate the desired result. “The question to ask since the enactment of the Act, is how far we have gone in increased participation of our indigenous companies and nationals in our domestic shipping business. How many more Nigerians are manning the vessels operating in our domestic waters? How many more of our domestic vessels are built or repaired in Nigerian shipyards and dockyards, how many more Nigerian companies are involved in the trade? “How many more are flying the Nigerian flag? What is the position of the Cabotage Vessels Financing Fund? The ultimate question is almost 10 years on, how far has Cabotage fared? The answer will range from woeful, poor dismal to fair and nobody will say successful”, he asked.

Sadly industry stakeholders observed that while the Cabotage Vessel Financing Fund (CVFF) planned to aid Nigerian Ship owners acquire vessels, has not been utilized, they doubt if the fund that has accrued to about N54 billion is still in the coffers of the bank. The fund is being kept by NIMASA who have been empowered by the law to disburse it to prospective Nigerian owned shipping companies.

The maritime regulatory body, since the signing of the Cabotage Act, has not mustered the political will to not only disburse the fund, but to make the regime work.

The requirements of the law which stipulates that vessels to be used by indigenous operators must be built and registered in Nigeria and also be wholly-owned and manned by Nigerians are unrealistic. Rather, Ministers of transport and indeed Director Generals of NIMASA have continued to utilise the waiver clause in the Act to the detriment of indigenous Ship owners.

“As the indigenous operators fail to meet these requirements, government has also provided a waiver clause in the same legislation that allows their more advantaged competitors to muscle in and corner the larger chunk of the trade. Given the combination of these two adverse elements in the Act therefore, in a non-technological and developing economy such as ours, it is little wonder that the critics of government can go to the extent of pronouncing the enactment of the Cabotage law as ‘dead on arrival’,” Eugene Nweke, National President of the National Association of Government Approved Freight Forwarders (NAGAFF), pointed out.

Interestingly, the Ports Consultative Council (PCC) and many other keen watchers of happenings in the industry insist that the sector, all through Jonathan’s tenure, remained stagnant. They have therefore come up with a road map that would propel the maritime sector and the port industry in the next four years under the administration of President Muhammadu Buhari.

Mixed feelings on the concessioning of the ports

In concessioning the ports, the government said it was targeted at improving; enhancing management capability of enterprises; creating a conducive institutional, legal and regulatory framework; developing private sector participation in financing, management and operations of port facilities. Other related objectives of the reform, according to the government, include increasing the efficiency of port operations, decreasing the costs of ports services to the users; reduce the costs to the government for the support of a viable port sector; boost economic activity and accelerate development; and make Nigeria the hub for international freight and trade in West Africa.

“The government decision to concession the ports as part of a reform programme was informed by the urgent need to address the declining performance of Nigerian ports, which were adjudged to be inefficient and unattractive to shippers”, Sullaiman Yusuf, then minister of transport, pointed out.

Consequently, APM Terminals, one of the concessionaires, was given the largest terminal in Apapa, Lagos, to manage. The company, chaired by Chief Ernest Shonekan, said they have so far spent more than N58 billion on civil works, equipment and upgrade of terminal since it took over the facility in 2006. This includes provision of equipment and rubber gantry cranes that aid quick cargo delivery and fast turnaround time in the ports.

Years after concessioning of the ports, most people still believe that the much expected reduction in the prices of cargo clearance has remained a mirage, even as concessionaires keep on inventing new ways of collecting levies from importers. The increases, port operators say, is not in line with government’s promise of lower rates few years after concession.

The concessionaires, on their part, are blaming the high charges on the rising prices of petroleum products to run their machines, cost of acquiring cargo handling equipment and the need to make returns on their investments. But freight forwarders are of the view that an increase of over 100 per cent higher than what importers used to pay before concession is not good for the economy. According to them, shipping lines, terminal operators and off-dock terminals have jacked up their prices, while demurrage on containers have also tripled far beyond what was charged pre-concessioning era.

Recently, Mike Osuofia, Managing Director of Osyjack Shipping Limited, recounted some of the high charges they are made to pay. According to him, for a 20-footer container, shipping companies charge N5,000 for document release, container cleaning N3,000, shipping line charges N28,000, telex release N5,000, amendment charges N15,000, as well as five percent value added tax (VAT) of all the total charge. He explained that shipping companies also collect N580 for NPA as Maritime Organisation of West and Central Africa (MOWCA) levy and demurrage on containers that were not returned on time.

Terminal operators also collect N3, 500 delivery charges; N25, 000 terminal handling charges; N400 vehicle entry permit; N2, 500 to position containers for examination and N1, 500 storage or rent charge for first three days after grace period and N3, 500 after 24 days. For the off-dock terminal, according to him, they collect N20,000 as transfer charge; N2,000 as release and documentation; N5,000 as royalty to terminal operators; N2,500 to position containers for customs examination; N3,500 as labour charges for examination, including N1,250 as terminal delivery charge and N400 for vehicle entry permit.

Before the concessioning, Osuofia said the charges were N1, 204 as wharf age and N1, 294 for documentation and release, terminal delivery order including vehicle entry permit, stressing that importers also pay five percent VAT of the total charges. The NPA also charged N375 as demurrage after three days grace period and N750 for 40-footer, no matter the number of days.

Despite the huge rejection by industry stakeholders, efforts by the government to reduce the astronomical charges have however proved abortive, as the recent granting of the economic port regulator status to the Nigerian Shippers Council has not helped matters, after the concessionaires under the aegis of Seaport Terminal Operators Association of Nigeria (STOAN), took the case to a federal high court, which ruled in their favour, asking the council to maintain status quo.

However, there are others who feel much has been achieved since the ports were handed over to private management. The Rector of the Port and Terminal Management Academy of Nigeria, Dr. Samuel Babatunde, has described ports concession in Nigeria as “a success story because the exercise have proved worthwhile after all” With the concession of the ports, according to Babatunde, these facilities “have benefited from the private sector experience of ability to fix things right.”

He said: “All the aims and objectives of concession have been achieved, and Nigerian ports have come of age, and are reckoned with in the international trade, commerce and investment.”

Babatunde posited that, with the concession, the ports have done very well in the areas of security of cargo, enthroned quicker turnaround time of vessels in the ports, reduced cost of doing business, provided enabling environment for economic activities, and facilitated the realisation of more revenue by the Nigerian Ports Authority (NPA), and, invariably, the Federal Government. Babatunde, who is the First Vice President of the Nigeria Institute of Shipping (NIS), as well as ILA Fellow, listed “the ills being suffered by the system in the old order” to include:  Turnaround time for ships was too long and usually calculated in weeks, sometime months, depending on the cargo being loaded or discharged; Cargo-handling plants and equipment owned by the NPA were few and mostly unserviceable, leading to shipping companies hiring these machines from private sector sources after having paid NPA; Dwell time for goods in the ports was prolonged due to poor port managements.

As a result, overtime cargo filled the most active seaports, leading to congestion; Labour for ship work was held in the vice-grip of wharf overlords, who controlled dockworker unions and supplied less than the manpower paid for. This fraud, which became accepted by the maritime community, lasted for years and was usually perpetrated to extract maximum revenue from helpless ship owners and their agents without a care of how this impacted on the Nigerian economy and the already poor reputation of Nigerian seaports.

Nigerian seaports were, as a result of the compounded problems, rated as some of the costliest seaports in the world; Many port premises and quay aprons had fallen to disuse, and failed road sections inside the ports made movement of goods within port grounds cumbersome and very slow; Following ports congestion, complaints of untraceable or missing cargoes were being regularly lodged against the NPA, all to no avail; and Security inside Nigerian seaports was compromised by the relentless ingress of multitude of all shades of persons into the seaports. As a result, miscreants called wharf rats easily gained access into ports and pilfered goods in storage or vehicle parts. In fact, security within port grounds was at the mercy of an elusive racket.

By Godspower Ike

The oil and gas industry has recorded significant growth in almost all segments of the industry, since oil and gas was discovered in Oloibiri, in the 1950s. This growth was in exploration, production, marketing and servicing among others.

Over the last decade, indigenous players have gradually displayed adequate capacity to drive growth in the sector and they have recorded significant engineering breakthroughs and also in the deployment of advanced technology. Today, with the introduction of the local content Act, a number of the companies have undertaken projects that, hitherto, were the exclusive preserve of foreign companies. Some of the indigenous companies are now major players in critical sectors of the oil industry.

This has led to an increase in the number of engineering feats by local companies. These local companies now fabricate components of oil vessels; carry out high technology drilling activities and also oil and gas exploration. This, therefore, has brought about the need to highlight some of the feats Nigerian companies have achieved in the area of engineering, investments in this area and challenges that might hinder its sustainability.

A large number of indigenous companies‎ are gradually positioning themselves as significant players in the global economic landscape, as they have in the last couple of years, recorded significant engineering breakthroughs in Nigeria, especially in critical sectors of the economy, like the oil and gas sector.

This was in spite of the tough operating environment ‎which has threatened the survival of these companies.

These companies had over the years, shown trust and commitment to the Nigerian economy by making significant investments in their operations and had laid down plans and structures to ensure their sustainability.

In the light of this, the Nigerian Content Development and Monitoring Board, NCDMB, had declared that Nigeria has recorded some measure of success over the years. It stated that engineering in the oil & gas industry is now done 90 per cent in country, while fabrication of all the field development facilities now has 50 per cent of the tonnage done in Nigeria.

It, however, noted that there is scope for improvement in manufacturing which is where the knowledge and technology resides.

Specifically, since the commencement of the Local Content Initiative, significant breakthroughs has been recorded in petroleum engineering activities in Nigeria and also in the fabrication of modularised crude oil separation units and Helical Submerged Arc Welded (HSAW) pipes.

Others are the building and refurbishment of Floating, Production, Storage and Offloading (FPSO) platforms, construction of large offshore oil and gas modules, offshore pipelines and offshore platforms.

In the same vein, Royal Niger Emerging Technology is establishing an Umbilical manufacturing facility at Angel Park, Badagry, in Lagos State. The facility is expected to come on stream in the next couple of weeks.

Umbilicals are described as subsea equipment composed of cables and elements which supply power and fluids as well as transmit data via fibre optics to other subsea hardware such as the Christmas tree and distribution equipment.

The Umbilical Lines contain electrical/fiber optic components, each protected with a high-density polyethylene sheath and the hydraulic systems composed of super duplex tubes or hoses.

The hydraulic system provides for hydraulic supply and chemical injection and the electrical/ fiber optic system contains the required signal power conductors for controlling the subsea Xmas trees.

The company said the plant would have the ability to take in umbilical product elements from all established umbilical manufacturers and would help manufacturers achieve full compliance with the legal requirement and provide reduced logistics cost.

The company also stated that the facility will help lower the total cost of project execution, provide jobs and technology transfer and will also ensure improved capabilities for aftermarket support on brown-field projects.

Today, indigenous companies have recorded successes in boat building, ships and vessels building, repair and refurbishment, fabrication of fully integrated decks for well-head platforms.

An indigenous company was also credited with fabricating and completing the load-out of 7,500 tons of structural components for Total’s USAN FPSO, while the same company and another, fabricated process vessels for an international oil company in Nigeria.

Also, indigenous firms have been contracted for the Turn-Around Maintenance and rehabilitation projects of Nigeria’s oil and gas facilities. Particularly, a local company was awarded the contract for the Turn-around Maintenance (TAM) of the Old and New Port Harcourt Refineries. This used to be the exclusive domain of the original manufacturers and other foreign companies.

These and many more too numerous to mention have been carried out by indigenous companies, such as in automobile assembly, heavy machinery and tractors assembly, components manufacturing, repairs, maintenance and other services.

In the area of investment, one of the champions of local content in Nigeria with focus in the oil and gas industry, Kaztec Engineering Limited, said it has offshore installation assets valued at over $300 million and onshore installations assets valued at over $80 million.

The company also stated that it has invested over $1 billion of its own funds in its various projects, especially in the development of its Snake Island yard.

Particularly, the company explained that it spent about $350 million in Phase One of the Snake Island development project, involving the setting up of the yard fabrication facility, while $300 million was spent in Phase Two, involving the pipe coating and pipe rolling mill.

In the third phase, the company said it spent $450 million for the construction of the dry dock and logistics base.

Similarly, Jagal Group, owners of Nigerdock and its subsidiary, had a couple of weeks ago, disclosed that they had invested over $1 billion on the development of the Snake Island Integrated Free Zone (SIIFZ).

According to the company, the SIIFZ had attracted direct investment to the tune of over $230 million, adding that the totality of investment in the zone today is in the region of $1 billion.

The company said the investments were made on infrastructure, technology and manpower development, among others, adding that the company had developed substantial in-country capacity for fabrication of decks, platforms, topside modules, subsea structures and other offshore infrastructure to globally recognised standards and provided deepwater support services in areas of hookup, Commissioning, Fabrication, Maintenance and Logistics to the largest offshore development such as Bonga, Agbami, ERHA and Akpo, for Shell, Chevron, ExxonMobil and Total respectively.

These and many more were offshoot of the comment by the  Federal Government that it is targeting the retention of over $10 billion in the oil and gas sector alone, out of an average annual oil and gas industry expenditure of $20 billion in the Nigerian economy compared to the current sum of less than $4 billion.

This is due to the huge foreign exchange the country is losing on a daily basis on importation, especially of goods and services that Nigerians had over the years developed the competency to manufacture and undertake respectively.

Specifically, Managing Director, Royal Niger Emerging Technology, Mr. Anthony Okolo, disclosed that failure to domicile the technology for umbilical manufacturing was the source of over $400 million worth of capital flight between 2008 and 2014.

According to him, previous industry efforts to domicile this technology have not been embraced by foreign investors and major manufacturers. “Investor apathy stems from the lack of a sector leader who is ready to sink in investment on the basis of the strength of the Nigerian oil and gas market and enabling legal environment created by the NOGICD Act,” he noted.

In addition, Nigeria, according to the Nigerian Content Development and Monitoring Board (NCDMB), had lost over $380 billion to capital flight over the last 30 years. This was prior to the introduction of the Nigeria Oil and Gas Industry Content Development Act, (NOGICD).

According to the NCDMB, the loss was aggravated by the loss of over 10 million direct and indirect jobs as well as loss of investments in the development of local fabrication yards and facilities.

The NCDMB lamented the fact that the country lost the opportunity for industrialisation through oil and gas activities and currently maintains no capacity in building drilling rigs, pipelines, valves, pumps, production platform, marine vessels, research and development, among others.

To this end, the key thrust of the NOGICD Act 2010, the NCDMB said, was to maximise utilisation of Nigerian-made goods and human resources as well as Nigerian-owned assets; link oil and gas industry to other sectors of the economy; ensure participation of indigenes and oil-producing communities in all aspects of the oil and gas business; and foster institutional collaboration. Others include job creation, training and domiciliation of capacity, technology and services and the development/upgrade of facilities and infrastructure.

In spite of all these challenges, stakeholders are of the view that indigenous companies should be commended for their resilience and determination to compete globally and contribute to Nigeria’s economic development.

Commenting on the roles played by indigenous companies in bringing about engineering breakthroughs, Mr. Ademola Olorunfemi, President of the Nigerian Society of Engineers (NSE), disclosed that Nigerian companies have continually strived to proffer logical and practical solutions to the challenges of economic development, especially in key sectors of the economy.

According to him, the solution model of the companies had been based largely on driving down capital flight, through utilisation of about 90 per cent of Nigerian content in both personnel and material resources in their production processes.

He said, “These companies, therefore, deserve recognition, encouragement and patronage for contributing to national development as the volume of investment they can plough back into the economy will be proportionally related to their Returns on Investment.”

For increased investment and sustainability, Olorunfemi, however, emphasized the need for patronage of locally companies, lamenting that Nigeria and Nigerians will rather buy foreign brands of products instead of indigenous products.

To turn this tide, he maintained that, “There is a retinue of government agencies that must be patronised by government itself in the first instance, thus creating awareness resulting to patronage by Nigerians.

“These Agencies include but are not limited to; National Agency for Science and Engineering Infrastructure (NASENI), Nigerian Building and Road Research Institute (NBRRI), Nigerian Communication Satellite Limited (NigComSat), National Centre for Agriculture Mechanisation (NCAM), to name just a few.”

He called on government at all levels and other individuals and corporate organization to encourage local manufacturing firms by ensuring patronage, especially with their proven performance.

He said, “We must therefore put it on record that it is the collective responsibility of all Nigerians, whether in government or in their private capacities to identify and encourage indigenous companies such that will create job opportunities/employments; build capacity; conserve foreign exchange, reduce poverty and as such percentage of people living in poverty and strive to attain true sovereignty as a nation.”

To encourage and deepen the commitments of indigenous firms, Mr. Chukwudi Uwakwe, General Manager, Fenog Nigeria Limited, an indigenous provider of Horizontal Directional Drilling technology in the Nigeria’s oil and gas industry, urged International Oil Companies (IOC) operating in the country to encourage local operators by considering them for more contracts and ensuring fair treatment for them.

According to him, increasing the patronage of indigenous companies that had invested so much in capacity development would buoy the local content drive of the government.

He said, “Let me use this opportunity to appeal to IOCs and the Federal Government to consider the local companies first before their foreign counterparts in the scheme of things in the industry. This is because, if we work and execute a project, the money would be used to develop Nigeria, but if foreign companies get the contract, they will only pay salaries and would take the money to their countries.”

Speaking in the same vein, Chief Executive Officer, Dorman Long Engineering Limited, Mr. Henry Okolo, noted that the long term sustainability and domiciliation in Nigeria, of the skill, materials and resources required for the operation of the oil and gas industry, as well as other critical sector, is a security imperative. He advised the Federal Government not to relent in its efforts to implement the local content policy across all the key sectors of the economy.

He said, “In Dorman Long, we believe that the subject of Nigerian Content in the oil and gas industry is a strategic issue. The benefits include accelerated economic, employment creation and technical capability that will support other industries.”

In his own view, Jean Balouga, a research assistant in the Economics Department of the University of Lagos, commended Nigerian engineering and service companies, as well as fabrication yards, stating that they have invested hundreds of millions of dollars on skill acquisition and enhancement, and capacity expansion due to the directives of the Federal Government.

He, however, noted that despite all these efforts, bottlenecks in the system still prevent meaningful fabrication work being awarded to Nigerian firms, adding that if these projects are awarded to the existing Nigerian yards not only can they demonstrate their ability to deliver to international standards of quality and safety but they also can substantially build long-term industrial capacity, provide employment and global competitiveness which is currently in the hands of the overseas yards.

Continuing, he said, “The present state of Nigeria’s needs is a clear indication that a responsible and dynamic approach to sustainable local content development needs to be adopted by government policy makers and operators to guarantee a better future for the country.

“Technological development does not occur just by chance; rather it is a product of a nation’s sound economic management, policy reengineering, good governance and a social value system that rewards hard work and creativity.

“Having a few companies committed to Nigerian content and pursuing local content programmes is not enough. Support for local content policies must be nationwide. It must be accepted by all and should become embedded in every operator’s business philosophy.”

To this end, it is general consensus that these engineering breakthroughs have helped in no small measure in putting Nigeria on the global map and is helping to project Nigerian companies as forces to be reckoned with.

It is expected that these breakthroughs would contribute immensely in growing the Nigerian economy, as it will help in conserving the country’s foreign reserves, contribute to employment generation and help in no small measure in stimulating the economy for growth and development.

As stated by most of the stakeholders, these feats can only be sustained if these firms are encouraged and supported by government at all levels and multinational companies. Government should ensure that these companies enjoy the patronage of players in their various sectors, while ensuring that incentives are put in place that will assist these companies.

A critical incentive would be the creation of an enabling environment for the businesses to thrive. It would also involve fixing the country’s infrastructural challenges and removing bottlenecks to an efficient and effective operating environment.