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How Nigeria can disrupt trade in Africa [III]

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Nigeria digital economy
Victor Uche Obioma

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1. Stimulation of Local Production Enabled System:

Nigeria is gradually finding her competitive edge in massive local processing, production and conversion of her abundant raw materials into finished products like cement, floor tiles, flour, paint etc.  

Also bagging and packaging core crops she has massive comparative advantage to produce like cassava, palm oil, maize, root and tuber crops etc. to enable local production.

Typical examples of impressive developments in this line abound: Operational lines of Nigeria’s biggest cold-pressed coconut oil factory have been completed in Akwa Ibom. Some 300,000 coconuts will be processed there per shift to produce 66 tons of coconut oil daily.

The factory will be supplied by an 11,000 hectare plantation in Akwa Ibom. Nigeria’s approach of equipping local industries to grow the economy from the inside out, gets a major prop as Bagad Oil Mills in Borno was resuscitated after 6years by NEXIM Bank to produce 30,000 tons of cooking oil- in addition to upgrade the facility to full production capacity within 1 year.

There is also a newly built King Flour plant by Onur Kumral in Akwa Ibom, which is now producing 500 metric tons of flour daily with employment opportunity for over 200 persons.

Farmers are encouraged to plant wheat to meet the demand of the factory to save Naira on import. The chairman of Innoson Vehicles Manufacturing Factory, Dr. Innocent Chukwuma, commissioned three new production plants in Nnewi, Anambra State with the capacity to produce 32,000 vehicles per year and would employ about 1000 Nigerians.

Innoson MOtors

Dr. Innocent Chukwuma, chairman, Innoson

The plants are manufacturing plants and automated robotic spraying booth which includes the Innoson Small/Minibus plant for manufacturing of 1.5-litre engine capacity between 7-seater and 10- seater buses (also known as Innoson Shuttle) and the Innocent Connect/Caris Plant for the production of sedan cars branded Innoson Connect and Innoson Caris, the plants were funded by the Bank of Industry.

There is also the story of an Enterprising Indigene, Oluwatobi Ajayi FICA who is founder of Nord Automobiles Limited, a fast-growing Nigerian automobile assembly company.

Oluwatobi Ajayi FICA thoughts of changing the narratives about Nigeria and Africa at large to make the world know that Nigeria can impact the world and do something great collaborating with Partners from other Nations.

His journey began during his National Youth Service Corps (NYSC) program when he served at West Associate Limited, Mercedes Benz Nigeria where he garnered skills, experience, exposure and knowledge about Vehicle Manufacturing.

He was retained and confirmed as a full staff at Mercedes Benz Nigeria after his NYSC program, he was placed in the Mercedes-Benz Van division where he was responsible for and oversaw the Nigerian branch division. He championed sales of hundreds of units of Mercedes vehicles during his two years tenure in the Department.

In 2015, Oluwatobi Ajayi FICA together with some investors started Jetvan Automobiles Limited to take the Mercedes-Benz vans sales and after-sales to the next level in Nigeria and Africa at large, he being the Managing Director of Jetvan Automobiles Limited.

Nord Automobiles Limited is fast becoming Nigeria and Africa’s first premier automobile corporation that provides world- class quality vehicles with world-class warranties on all their vehicle models with service stations nationwide at a lower and affordable price.

Nord Automobiles produces various designs of vehicles; across all segments ranging from commercial vehicles (bus, trucks, pick-ups) and passenger vehicles with standard quality, durability for Nigerian roads at international standard, they are currently also planning to champion the use of electric vehicles in Nigeria with the building of its designated charging structure with a wide network nationwide.

Nord Automobiles Limited is worth about NGN 5 billion Naira. On July 30, 2021 (“Thor Explorations” or the “Company”) announced the first gold pour from its Segilola Gold Mine located in Osun State, Nigeria.

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The process plant ramp up will continue over the next six weeks with commercial production targeted for September 2021.

At commercial production, the plant will run at a processing rate of 715,000 tons per annum, targeting c.85, 000 ounces of gold per annum.”

At same period was the launch of biggest tile factory in Nigeria- The Virony factory to produce 70,000 square meters of tiles daily, out of Ogere – Remo in Ogun State to cut Nigeria’s imports of Italian tiles and employ hundreds of Nigerians. Additionally, the paper industry in Ogun State got a big boost of $500 million USD investment on tree plantation for paper production from the Dahua Paper Company Nigeria Limited, Owiwi in Ewekoro LGA.

Stimulating local production enabled system within all sectors in Nigeria is surely a pointer to Trade Disruption in Africa from Nigeria; going by the ripple effect it will have on mass production of locally made International Standard Products, goods and Services across all sectors and Industry.

2. Stakeholders Engagement and Inclusion In Policy Formulation:

In July 2021 the Nigeria Startup Bill- NSB came ALIVE allowing Industry Experts, policy experts, Startup Founders, MSME Stakeholders make entry and input to capture their thoughts, Interests, Requests and Expectations to the Nigeria Startup Bill which is currently at Committee review stage.

Nigeria Startup Bill

Attendees at the MDA Consultation Session for the NSB

The Nigeria Startup Bill project is a joint initiative by Nigeria’s tech startup actors and players and the Presidency to harness the potential of our digital economy through co- created regulations.

The Bill will ensure that Nigeria’s laws and regulations are friendly, clear, planned and work for the tech ecosystem.

This, we believe, will contribute to the creation of an enabling environment for growth, attraction and protection of investment in tech startups.

The step by step schedule of the bill from draft to submission are:

. Validate First Draft by July 2021 where Ecosystem Leaders and representatives review the first draft as well as the Presidential Working Group composed of MDA decision makers critical to implementing components of the bill.

. Town Halls by August 2021 is phase where Presidential Announcement and Town Hall meetings take place for public consultation and validation of the second draft of the bill with ecosystem stakeholders at state level in all geopolitical zones.

. Final Draft Produced by September 2021. At this stage Drafting teams take all the inputs and make revisions to feed into the final bill.

. Bill Submitted by October 2021. Here Bill is submitted to the President who then submits Executive Bill to the National Assembly. This is to ensure a robust draft that captures all inclusive Startup Sector Players and Actors opinion is turned in to the National Assembly of Nigeria for review and accent by the President; keeping sight to formulate laws that are collectively thought out with Inputs from Key Sector Players like Enterprise

Business Owners, Members of Trade Associations, Organized Private Sector, Informal Sector Representatives, Govt. SME Support Agencies like SMEDAN, NIRSAL etc. and Policy Makers- Interesting developments as this are POINTERS that trade, commerce, production and service delivery will see mileage beyond Nigeria’s Borders into other African communities to stir up a disruption in Africa like has never been witnessed

3. Revival of Big Impact Projects/Investments: 

Nigeria is witnessing massive impact project revival and investments which is seemingly a key interest of the current Muhammadu Buhari Administration.

Typical amongst these are The construction of the 10,000 tonnes per day methanol plant and a 500 million standard cubic feet per day gas processing plant, in Odeama, Brass, Bayelsa State- will be the largest methanol plant in Africa.

Methanol can be used for different purpose and can also serve as a key chemical agent in pharmaceutical and agro-chemical industries, also gas is key to food processing and can lead the nation to food sufficiency, industrialization, increase in Gross Domestic Product and power sufficiency.

Nigeria

Newly commissioned Lagos-Ibadan Standard Gauge Rail line ( File Photo)

An examples of a stalled big-impact investment/infrastructure project that the Buhari Administration revived which is now bearing fruit is the NLNG Train 6 completed in Q3 2021.

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The process began in July 2018 with search for an EPC contractor for Train 7, then signing of Front End Engineering Design (FEED) with two consortia, B7 JV Consortium and SCD JV Consortium, in a Dual FEED Process. Guaranty Trust Bank of Nigeria and Sumitomo Mitsui Banking Corporation (SMBC) were appointed as Financial Advisers for the Project.

By March 2019: Nigeria LNG Limited and Nigerian Content Development and Monitoring Board (NCDMB) signed off an approved plan for Nigeria Content (NC) for NLNG’s Train 7 Project.

By September 2019: Nigeria LNG Limited issues Letter of Intent for the EPC Contracts of the Train 7 Project to SCD JV Consortium, comprising affiliates of Saipem, Chiyoda Corporation and Daewoo.

On 27th December 2019, Nigeria LNG Limited takes the Final Investment Decision (FID) on Train 7, at a ceremony in Abuja, Nigeria.

In  April 2020: Approval of the Nigerian Content Compliance Certificate (NCCC) and Approved Vendors Lists (AVLs) by the Nigerian Content Development and Monitoring Board (NCDMB).

On 13th May 2020: Nigeria LNG Limited (NLNG) awards the Engineering, Procurement and Construction (EPC) Contracts for the Train 7 Project to SCD JV Consortium, comprising affiliates of Saipem (Italy), Chiyoda Corporation (Japan) and Daewoo (South Korea).

On June 15th, 2021: President Buhari performs NLNG Train 7 Groundbreaking Ceremony, to formally mark the commencement of construction.

Train 7 will increase the capacity of NLNG’s current six-Train plant by 35% from the current 22 million Tonnes Per Annum (mtpa) to 30mtpa.

The Project is anticipated to create more than 12,000 new direct jobs (and as many as 40,000 new indirect jobs) during the construction stage and will attract $10 billion USD in new investment in/into Nigeria, it will also increase the tax base.

The project will support the development of local engineering and fabrication capacity.

The total in-country engineering man-hours is set at 55 per cent, while 55 per cent of all procurement for the execution of the project will be done by Nigerian vendors and 100% of all installations and construction will happen in Nigeria.

On fabrication, over 70,000 tons of fabrication materials covering condensate stabilization units, tanks, pipe racks, flare systems, non-cryogenic vessels and many other pipe spools and fittings will be made in-country.

Other opportunities for local content include procurement, logistics, and equipment leasing, insurance, hotels, office supplies, aviation, haulage and many more.

Nigeria LNG Limited look forward to other trains—8, 9, and 10. The top 10 global LNG producers are currently Australia, Qatar, United States, Russia, Malaysia, Nigeria, Indonesia, Algeria, Trinidad and Tobago and Oman.

Other landmark Impact Projects of the The Buhari Government include Resuscitation of Port Harcourt, Calabar and Warri ports ongoing; new Bonny seaport linked to rail in the pipeline.

Refurbishment of Port Harcourt to Maiduguri railine with a new spur to Owerri been sealed; these are contained in The Federal Executive Council (FEC) approval of $11.17 billion USD to link all Nigeria’s coastal cities by rail in six years which Minister of Transportation, Rotimi Amaechi, presented two memos about Federal Government’s commitment to expanding and consolidating on the rail project-

The first Memo has to do with the Kano – Jibia rail and Port Harcourt – Maiduguri rail which received funding approval to ensure that work starts immediately on the two railways.

The second memo was about ratification of the president’s approval for the award of contract for the Lagos-Calabar Coastal Standard Gauge.’’

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Estimated to cost $11.17bn USD rail project to link all coastal cities- from Lagos to Sagamu, Sagamu to Ijebu-Ode, Ijebu-Ode to Ore, Ore to Benin City, Benin-City to Sapele, Sapele to Warri, Warri to Yenogoa, Yenegoa to Port Harcourt, Port Harcourt to Aba, Aba to Uyo, Uyo to Calabar, Calabar to Akamkpa to Ikom, Obudu Ranch with branch lines from Benin-City to Agbo, Ogwashi-ukwu, Asaba, Onitsha and Onitsha Bridge and then Port Harcourt to Onne Deep Sea Port.

This particular route is very important especially for

Nigeria’s coastal economy- See Announcement on YouTube HERE

Funding and Expansion of Innovation Hubs: 

Nigeria has recorded impressive funding support for Innovation hubs from Philanthropic individuals, organizations and elites leveraging her 174 Universities (79 Private, 43 Federal and 52 State Universities) as lunch pads and spring board for stimulating innovation to drive cluster support outward.

Good Examples are NGN 1 Billion Naira Grants by BUA Group to University of Maiduguri- UNIMAID and University of  Ilorin-  UNILORIN  respectively  for  Enterprise  Development- BUA  GROUP plans to build 1 billion naira center for Innovation and Product Development for UNIMAID Entrepreneurship  and  Enterprise  Development  (UM-CEED) Complex as part   of     initiative     to     give  back  to the community.

capital flow

capital flow through startup funding

This is in addition to University of Ilorin; also not       left    out one  key  constraint  Innovation  Hubs  in  Africa  face  is  the  lack  of adequate funding.

Hubs represent a lot of potential in terms of facilitating growth and creating synergies across the entrepreneurial ecosystem, they have provided the backbone of Africa’s tech ecosystem, but like African fund managers and startups they support – they need funding.

Though,  Africa’s tech hubs have grown to a new record of 744 across the continent in 2020, 41% of these facilities are incubators, 24% are Innovation hubs, and 14% are accelerators and 39% offer co-working space.

Nigeria has the most hubs per country, with 101, followed by South Africa’s 93, Egypt’s 56 and Kenya’s 70.

Majority of these hubs received less than $100k USD in funding from various sources, while 62.2% of hubs have less than 10 paid employees. When it comes to startup funding, 191 were funded by hubs in 2018.

The fact that only 40% of the surveyed hubs offer funding to startups denotes the high diversity in the type of support that such organizations provide.

Just as Silicon Valley attracts more money than other US geographies, or as the UK entices larger contributions than Estonia; Africa’s ecosystem is concentrated.

The degree of this consolidation is indicative of the scene’s relative immaturity with 80% of total funding going to just four countries- Nigeria, Kenya, Egypt, and South Africa.

Essentially  there  has  been  progressive  inclusion  of  new  landmark  Industrial, Manufacturing and MSME growth stimulation activities connected to continuous innovative thinking, application of technology and support policy implementation framework within Nigeria’s estimated 208+ million population characterized by abundant human capital which will trigger mass production of goods and services, commerce, inter-country trade and service penetration, new export channel development and overall disruption of trade in Africa by Nigeria. Quotes below by Africa’s Richest Industrialist buttress this!

-End-

About the Author:

Victor Uche Obioma is Chairman, Victfaus Integrated Solutions Limited (a division of Views Group Co.). He is International Partner for Nigeria – World Business Angels Investment Forum (WBAF); and Member, Global Start Ups committee.

He is Member, Global Chamber of Business Leaders-GCBL; Global Entrepreneurs Network (GEN) Startup Founders Mentor at Tony Elumelu Foundation (TEF), TAKWEEN Accelerator- his Mentee placed 03rd to WIN $15K USD Seed Fund, He is Advisor at Prosper Advisors Network, Kenya; Ambassador for Western Africa at Global Startup Awards- GSA. He is Founder of STARTUP AGENDA, Judge at 2021 Africa’s Business Heroes- Jack Ma Foundation & Draft/Research Committee team Member of The Nigeria Startup Bill.

You can find out more about him here

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