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Economy:  Environment Worsens as Nine Big Coys Exit Nigeria

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By Tony Obiechina, Abuja

The year 2023 proved to be one of the most challenging periods for businesses in Nigeria especially the manufacturing sector.

This could be attributed to various factors notably the harsh economic environment the manufacturing companies operated.

The situation no doubt has led to a good number of such companies leaving Nigeria’s shores to neighbouring countries blaming lack of reliable infrastructure, including power shortages, poor road networks, and limited access to ports and airports which made it difficult for them to move goods and raw materials around, in and out of the country.

The latest of such companies to close shop is Africa’s largest syringe firm, Jubilee Syringe Manufacturing (JSM) company in Awa, Onna Local Government Area of Akwa Ibom, which ended its operations last month.

The company owned by a Turkish national, Onur Kumral is one of the several industries attracted to the state by the administration of Governor Udom Emmanuel.

Inaugurated in 2017 by former Vice President Yemi Osinbajo, the company had stopped production many months ago, but it finally announced the end of operations on Dec. 31, 2023.

This is against the backdrop of many manufacturing companies that have left Nigeria’s shores to neighbouring countries blaming lack of reliable infrastructure, including power shortages, poor road networks and limited access to ports and airports which made it difficult for them to move goods and raw materials around, in and out of the country.

Other companies that had earlier exited Nigeria included Lazarpay, a website and crypto payment company, GlaxoSmithKline Consumer Nigeria, 54Gene, MABISCO Biscuit, Sanofi-Aventis Nigeria, among others.

In shutting down its operations, Jubilee Syringe Manufacturing (JSM) company in a memo addressed to all the workers of JSM, stated that all positions had been placed on temporary redundancy effective Jan. 1, 2024.

The statement titled, “Temporary Redundancy  – Service Not Needed Till Further Notice,’’ and addressed to all workers read in part, “We trust this message finds you in good health.

“It is with a heavy heart that we write to you today to communicate a challenging decision that Jubilee Syringe Manufacturing company limited has had to make due to unforeseen circumstances affecting our business operations.

“After careful consideration and a thorough evaluation of our current business situation, we  regret to inform you that we must implement temporary measures to ensure the long term sustainability of the company.

“We want to emphasise that this decision is not a reflection of your individual performance or dedication to the company. The challenging business environment we find ourselves in, has compelled us to take these difficult steps.

“Please return all company belongings in your custody.

“Thank you for your understanding and cooperation during these challenging times.”

Lazarpay — In April, Lazerpay, a website and crypto payment company co-founded by 21-year-old Emmanuel Njoku announced it was shutting down operations after failing to raise funds to keep the company afloat. The company operated for only two years before calling it quits.

GlaxoSmithKline Consumer Nigeria – In August, GSK UK Group announced its intention to cease commercialisation of its prescription medicines and vaccines in Nigeria through the GSK local operating companies and transition to a third-party direct distribution mode.

The company had earlier complained that challenges accessing forex were disrupting its operations in Nigeria.

In surrendering to defeat, the company had to pivot to a third-party distribution model for its pharmaceutical products. 

The company’s exit came as a shock to many who had grown accustomed to its products and further highlighted the extent of the nation’s macroeconomic woes on the business community.

54Gene – 54Gene shut down in Sept. last year bringing an end to its four-year existence in which it raised a whopping $45 million in three funding rounds.

The company’s death in Sep. culminated in a tumultuous year in 2022 where it had three CEOs, a series of complaints from staff and other legal issues. 

MABISCO Biscuit- In October, Mayor Biscuits Company Limited popularly called MABISCO announced it is shutting down its multimillion-dollar plant in Agbara Industrial Estate, Ogun state.

According to a statement from the company’s management, they intend to sell the company and focus on other business areas.

The company started operations in 2016 and it was reported to have accumulated around 5percent share of the market in its seven-year history.

Sanofi-Aventis Nigeria Ltd – In November, the Nigerian arm of the multinational pharmaceutical company Sanofi Aventis in a similar fashion to GSK and P&G announced its ceasing operations in Nigeria and pivoting into a third-party distribution business model in a letter sent to its partners.

Although the company announced a third-party distributor would handle its products in Nigeria, it declined to name the distributor. 

Equinor – Divestment from international oil majors in Nigeria’s petroleum industry has become common in recent times as Equinor Nigeria Energy Company (ENEC) announced in Nov. the sale of its 85percent stake in oil and gas lease OML 128, and a 20.21percent stake in the Agbami field, operated by Chevron to Nigerian owned Chappal Energies.

While the cost of the transaction was not disclosed, a statement from the company noted that its business in Nigeria had been profitable and the decision to sell syncs with its “strategy to focus on international oil and gas portfolio and core business areas”.

The sale of its assets brought an end to Equinox’s over three decades of presence in Nigeria dating back to 1992.

Bolt Food – Bolt Foods joined the train of companies exiting the Nigerian marketplace in Nov. when it announced its end of operations in Nigeria.

The company cited the need to optimize resource utilization and streamline overall efficiency as responsible for its latest strategic decision.

Procter & Gamble (P&G) – In early Dec., P&G announced the dissolution of ground operations in Nigeria and reverting to an import-only business model for its Nigerian market.

The company noted that Nigeria’s macroeconomic problems and forex challenges in Nigeria were responsible for its decision since it was difficult to operate as a dollar-denominated entity.

In June 2017, the company commissioned a $300 million state-of-the-art plant in Agbara, Ogun State but just a year after, there were reports the plant had shut down over economic issues as it had difficulty breaking even.

Jumia Foods – Not only Nigeria was a casualty of Jumia’s decision to pull the plug on its food delivery business in Africa, but across all countries on the continent where Jumia Food operates such as Kenya, Uganda, Morocco, Tunisia, Algeria, and Ivory Coast.

The company noted that the food delivery business in Africa was difficult, and it wanted to focus on physical goods where there was a path to profitability. 

Commenting on the development, foremost economist, Professor Uche Uwaleke told Daily Asset in exclusive interview on Sunday that the exit of the companies from Nigeria has negative implications for job creation, economic growth and inflationary expectations.

Uwaleke who is Nigeria’s first Professor of Capital Market and the Director of the Institute of Capital Market Studies at the Nasarawa State University Keffi, blamed the exit of these companies majorly on persistent Forex challenges.

His words: “It goes without saying that the exit of companies from Nigeria against the backdrop of a drastic drop in foreign direct investments has negative implications for job creation, economic growth and even inflationary expectations.

“A major reason for the exit of these companies has been the persistent forex challenge. Government’s current efforts aimed at improving liquidity in the forex market via dollar loans should be seen for what it is – a stop gap measure.

“A sustainable solution requires ramping up oil production to take advantage of favourable crude oil price. It also involves developing other sources of forex including solid minerals and agriculture.

“Overall, the business environment in Nigeria remains unconducive and burdened by weak infrastructure such as epileptic power supply, bad roads and insecurity. There’s equally the issue of corruption, poor access to credit and multiple taxation.

“The Presidential Committee on Fiscal Policy and Tax Reforms is currently working on streamling taxes. It is hoped that the outcome of the committee’s work will help improve the tax environment.

“The fact remains that the president’s foreign trips to woo foreign investors can only bear fruits only when these challenges are dealt with and a business-friendly environment is in place.”

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Insecurity: State Police Bill Passes Second Reading in Reps

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By Ubong Ukpong, Abuja

A bill seeking to alter the provision of the constitution of the Federal Republic of Nigeria to provide for the establishment of state police passed through second reading in the House of Representatives on Tuesday.

Entitled “A Bill for an Act to Alter the Constitution of the Federal Republic of Nigeria, 1999 to Provide for Establishment of State Police and for Related Matters (HB.

617),” the proposed legislation was sponsored by the Deputy Speaker Benjamin Okezie Kalu and 14 other lawmakers.

Leading the debate on its general principles, one of the co-sponsors, Hon.

Tolani Shagaya noted that the primary purpose of government as enshrined in Section 14(2)(b) of the Constitution of the Federal Republic of Nigeria, 1999 (As Altered) is the security and welfare of the citizens.

He noted that in recent times, the nation’s collective security has been greatly challenged and state policing is not only inevitable, but urgently desired to tackle the mounting challenges of insecurity.

The lawmaker explained that the establishment of State Police is a clarion call for a tailored, community-centric policing system; and an acknowledgment that our states are uniquely positioned to address the security challenges within their borders.

Listing some of the key innovations of the proposed alteration, he said, “the transfer of “Police” from the “Exclusive Legislative List” to the “Concurrent Legislative List”, a move that effectively empowers States to have State controlled policing; the introduction of a comprehensive framework to ensure cohesion as well as accountability and uniform standards between the Federal Police and State Police; the provision of prescribed rigorous safeguards preventing unwarranted interference by the Federal Police in State Police affairs, emphasising collaboration and intervention only under well-defined circumstances.

Others included: “the establishment of State Police Service Commissions as distinct from the Federal Police Service Commission with clearly defined roles and jurisdictions; a re-calibration of the National Police Council to include the Chairmen of the State Police Service Commissions, emphasising the collaborative and consultative nature of policing in our federal system, a recognition of the possible financial challenges which may be faced by States Police, by empowering the Federal Government to provide grants or aids subject to the approval of the National Assembly, thus ensuring adequate resources for effective policing, etc.”

Shagaya added that the alterations proposed in the Bill are not just alterations to the Constitution of the Federal Republic of Nigeria, but also the building blocks of a more secure, accountable and resilient Nigeria.

Contributing in support of the bill, Hon. Ahmed Jaha stated that the bill is timely as security is the responsibility of all and everybody’s business.

He noted that with community policing and Nigerian police working in tandem, they will rid our communities of all forms of crime.

Also, Hon. Babajimi Benson supported the bill, commending the Deputy Speaker for initiating it.

On his part, Hon. Awaji-Inombek Abiante in supporting the bill noted that Nigeria has had enough of insecurity and establishing state police is a way to improve the situation.

The bill when put to vote got the support of the majority of the members.

It was later referred to the Committee on Constitution Review by the Deputy Speaker who presided over the session.

He urged members who have further inputs on the bill to channel such concerns to the committee.

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MOFI Launches N100bn Fund to Stimulate Investments

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By Tony Obiechina, Abuja

Ministry of Finance Incorporated (MOFI) has launched a N100bn project preparation fund to stimulate investments in Nigeria.

The Managing Director/Chief Executive of MOFI, Mr Armstrong Takang disclosed this at the Public Wealth Management Conference in Abuja on Tuesday.

The conference which was declared open by Vice President Kashim Shettima had in attendance the Minister of Finance Wale Edun, the Chairman of the MOFI Board Dr Shamsudeen Usman, a former Finance Minister Dr Olusegun Aganga, Chairman of Heirs Holdings Tony Elumelu and other top officials in the public and private sectors of the economy.

As part of a broader strategy to deal with these challenges, Takang said MOFI, as the trusted custodian and the shareholder for the Federal Government of Nigeria’s investment assets is executing a number of initiatives aimed at contributing towards building a more inclusive and sustainable economy.

According to him, the conference would foster collaboration among stakeholders, facilitating the exchange of insights, experiences, and best practices in managing public assets.

He said by working together, stakeholders can find innovative solutions to the challenges the economy is currently facing.

He explained that efficiency and transparency and accountability are at the heart of effective public wealth management, pointing out that the conference will be used as an avenue to optimize the performance and returns from federal government’s assets under MOFI’S management, ensuring that they deliver maximum value for the Nigerian people.

He stated that given the importance of public wealth in rebuilding the economy, especially at a time when there is a need for more focus on domestic resource mobilisation, now is the time to encourage the exploration of innovative mechanisms such as public-private partnerships and alternative financing models.

By unlocking hidden value in public assets, Takang said the country can attract investments and drive economic growth for Nigerians.

He also disclosed that the conference would provide potential investors with data-driven insights on federal government assets, noting that by presenting compelling investment opportunities, MOFI can attract the capital needed to fuel economic development and create jobs for Nigerians.

Speaking also at the event, Usman said MOFI will leverage and explore innovative strategies that will unlock the full potential of the government’s public assets.

He said, “We are starting a journey that other nations such as Singapore or Sweden, or more recently Saudi Arabia have undertaken before.

“We will blend the lessons learnt from such country’s experiences with the unique circumstances of Nigeria. We are committed to working collaboratively with all stakeholders to achieve our project.

“From the 10 year plan, we have in line with Mr. President’s emphasis on delivering results, identifying a number of key deliverables, and setting specific key performance indicators to track and report our performance.

“We aim to maximise returns, attract investment, and guarantee sustainable economic growth.”

Foreign Investment Drops by 80 Percent

Meanwhile, foreign investment into Nigeria dropped by 80 percent to $3.9bn in 2023 from the $5.3bn that was invested in the country in 2022, analysis of a report of Capital Importation into Nigeria has shown.

The report which was released by the National Bureau of Statistics (NBS) showed that Nigeria attracted $1.1bn in Q1 2023, $1.03bn in Q2, $654.6m in Q3 and $1,08bn in Q4.

In 2022, $1.57bn was imported into the country in Q1, which reduced to $1.53in Q2. It further went down to $1.15bn and $1.06bn in Q3 and Q4 respectively.

However, the report said the S$1.08bn that was imported into the country in Q4 2023 was slightly higher than the $1.06bn recorded in Q4 2022, indicating an increase of 2.62 per cent.

“In comparison to the preceding quarter, capital importation rose by 66.27 per cent from the $654.6m in Q3 2023,” the report added.

It said other investments ranked top accounting for 54.64 per cent ($594.7m) of total capital importation in Q4 2023, followed by portfolio investment with 28.46 per cent ($309.76m) and Foreign Direct Investment (FDI) with 16.90 per cent ($183.9m).

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Wike Gives Ultimatum to Illegal Land Owners in FCT Communities

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By Laide Akinboade, Abuja

Minister Federal Capital Territory Administration (FCTA), Nyesom Wike on Monday gave ultimatum to illegal settlers in Chika Aleita Abuja Science and Technological Village to leave.

Wike stated this during an inspection tour of the technology village in company of his counterpart in the Ministry of Science and Technology, Uche Godfrey Nnaji, in Abuja.

Issuing the order, Wike said the fast encroachment was aided by inability of the past administration to take action and stop individuals from building illegally despite the payment of compensation.

He noted that the money expended in providing infrastructure to the village will not be a waste.

“I will give Development Control a go ahead to demolish because I heard they have been compensated since 2018.

“We want to take over the place so that infrastructure can come in. It will even attract investors. I can tell you that they have been compensated.

“No amount of propaganda can stop us from doing the right thing,” The FCT Minister said. .

Earlier, the Minister of Science and Technology, informed Wike that leaving illegal settlers that have encroached the buffer of the village constitutes a big risk and loss to the country’s investment drive to the village that is a the replica of London technology village.

He said the government of Great Britain was able to generate 6 billion pounds in six years.

Nnaji noted that the country stands the chance of making more if right environment is put in place.

The Abuja technology village was the creation of Federal Government during the return of democracy to the country.It is a Free Trade Zone expected to incubate science and technology but subsequent administrations failed to execute the project.

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