Maritime investors, paint firms move to Angola, Ghana, others
Paucity of funds threatens electricity supply
THE nation’s maritime sector is fast losing its position as a safe haven for foreign direct investments. It is becoming a reminder of the nation’s inability to attract and retain foreign investors.
Like investors in the maritime sector, Nigeria’s paint manufacturers are planning to relocate to neighbouring countries.
The Guardian learnt that some multinationals are at the final stage of their plans to set up factories in Ghana, Togo and Republic of Benin to manufacture base paints and export them to Nigeria. Total investment in the industry is about N15 billion with an installed capacity in excess of 150 million litres of assorted paints per year and with about 10,000 people employed in the industry.
Besides, the Federal Government’s transformation agenda, which has improved power generation and distribution as its kernel, is now enmeshed in uncertainty.
This is because most of the independent power projects are in limbo, and the existing government-owned electricity facilities are being undermined by fund paucity.
The inability of the National Assembly to work on the nation’s port legislation bill, “Ports and Harbour Act,” has been identified as the major obstacle to foreign direct investment into the maritime sector. The Act is what ought to regulate all maritime activities in the country. The 1999 Act by the National Assembly has expired and since, there has not been a replacement. So, every activity at the nation’s gateways is deemed illegal.
The concessionaires currently operating the ports are doing that based on a mutual agreement with the government; there is no concrete regulation. Thus, investors are afraid that their businesses can easily be wiped out at the whim of government.
Already, three foreign companies have decided not to invest in Nigeria, thus opting for Angola and Ghana ports.
It was learnt that these three companies, two based in Germany, while the last in Holland, had earlier made their intention to invest in the nation’s maritime industry, but reports and feasibility studies by the Nigerian company facilitating the project might have stalled the investments.
A source at the company, Sadeb Shipping Nigeria Limited, revealed that the investors want a guarantee from the government about their proposed investment, but the non-existence of the legislation at the nation’s ports stalled the project.
“We had hoped that our foreign clients after studying the reports on our nation’s maritime would have gone ahead with the investment but the ports’ legislation was a stumbling-block because they are willing to invest in the sector.
“Their anxiety is that they doubt government’s sincerity in any contractual agreement and since there is no law to back their investment, it would not be right for them to invest in a sector without legislation,” the source said.
But sources at the National Assembly have said that there is no such bill at the nation’s legislative chamber, and that the bill is yet to be presented to the lawmakers by the Executive.
The Federal Government had earlier assured port users and stakeholders in the maritime sector that the “Ports and Harbour Act” would be passed soon as a law.
Due to unexplained reasons, approved allocations for existing power stations and electricity distribution centres are being withheld, or at best, released piecemeal, compromising the objectives and spirit of the budget itself.
An investigation conducted by The Guardian showed that virtually all the government power facilities were yet to receive their respective fourth quarter allocations, even as they were short-changed in the previous quarter’s fund releases, with some of them complaining of disproportional disbursements.
Hardest-hit by the fund paucity saga were Egbin Thermal Station; Eko Electricity Distribution Company; Ikeja Electricity Distribution Company; Port Harcourt Electricity Distribution Company and Jos Electricity Distribution Company.
Some chief executives of the Power Holding Company of Nigeria (PHCN) told The Guardian that the budgetary allocations had not been duly paid to various arms of their respective operations.
The Chief Executive Officer of Egbin Thermal Station, Mike Uzoigwe, said the plant needed more funds to enable it run at full capacity of 1320 megawatts (mw) and carry out complete overhaul of the plant.
According to him, only N1.6 billion was released to the company from the budget. This amount, he said, was insufficient to carry out necessary works on the facility.
He, however, noted that the company had made efforts to improve the plant capacity to 1,080mw from its lowest ebb of about 800mw.
Egbin power plant, which was commissioned in the past 27 years, consists of six units generating 220mw each, with installed capacity of 1320mw. Egbin is the most reliable power plant in the country and contributes about a third of the national grid.
But Uzoigwe said the units operating in the plants now needed adequate overhaul, adding that the “late release of approved funds from budget office made it impossible to hit our targets and plans.”