Archive | Relocating to Nigeria

Time to Return to Nigeria

Most developed countries are currently in the middle of the worst recession in a century. Unemployment figures are the highest they’ve ever been since the 90”s in the US and the United Kingdom.

Most Nigerians in the Diaspora are finding it increasingly difficult to make ends meet as redundancies and business closures continue to rise.

To make matters worse the usually welcoming western nations are becoming hostile to foreign and migrant workers, perhaps due to the shortage of jobs and the perception that migrant workers contribute little or nothing to their economy, and all they do is drain their housing, health and educational resources.

Nationalist ideologies and Parties are gaining grounds while Immigration laws have been tightened to discourage people from coming in. As a matter of fact, highly placed Politicians are even talking about British Jobs for British workers.

While the developed economies are shrinking, the Nigerian economy has managed to grow by 5% last year according to the recently released figures from the Central Bank of Nigeria, despite the Niger Delta crisis and the epileptic power supply.

You now have to ask the question, where is the proverbial golden fleece? Is it still in the cold cities of Europe? or Is it now in the warm and tropical cities of Lagos or Abuja.

You only have to look at how well some of your colleagues that you left behind are doing, despite all the moans about no electricity, armed robbers and the likes, they still ride the best cars, send their kids to private schools and perhaps still able to afford an expensive family holiday trip to Dubai. What do you think? Time to move?.

Written by David Phillips

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Relocating to Nigeria

Posted by Henry Kester Ewruje
While I believe, the successes of Nigerians abroad who came back home should be emphasised, I must say that I am deeply disappointed by the government of the country because it is insensitive to the yearnings of the people.

All over the world, there is an increased thirst for education. Knowledge is the prime need of the hour. More and more people are taking full advantage of opportunities for learning and education level of the people is at a high point.

Nigerians abroad are making greater use of the priveleges inherent in living in advanced countries in the world. This is the only way to rear increasing numbers of strong, purposeful men and women, equipped with vision, mental clarity, health and education.

The strength of some nations is education where there is near zero illiteracy. Every citizen must go to school on government scholarship. Infact, in some countries, you get paid for going to school.

Many Nigerians came backhome after years abroad with good education and with the courage to struggle and achieve success back home. They came back home to be successful Lawyers, Doctors and other professionals while some kept their certificates and degrees to be Pastors, Entrepreneurs, Farmers, Entertainers, Hoteliers and Politicians.

Those of them who were accomplished came back home after many years abroad with high hopes for a better life. Some of them found disillusionment and it did not take long for those hopes to fade but they were armed with faith and the will to succeed in their fatherland. They had self belief.

Faith is the first factor in life devoted to service. Without faith, nothing is possible. With it, nothing is impossible. Faith in God is the greatest power, but great too, is faith in oneself. Faith, courage, dignity, ambition and responsibility were needed by the returnees, cultivated and used for their success.

These Nigerian men and women, saw the possibilities of a brighter future in the country, generated by vigorous commitment of new dimensions of self help. And that really cost. It required an investment of time, energy and money. To move up, they needed a plan and a formula. Their success was determined by how well they understood their past and where they were coming from and how well they planned their future in their own country.

While they excelled, succeeding against the odds, because they exerted control, some of them are still outside the mainstream of living out their vision of coming back home. Some of these men and women were uneducated and deported back to Nigeria after serving years of imprisonment abroad for various offences. They had gone abroad to husstle.

Faced with disillusionment, most of them developrd a mobid sense of guilt as well as an extremely sesitive attitude towards their past mistakes. The attitude can be tragic. Their problem is one that must find its solution in the domains of psychology and religion. They must somehow turn their vision toward the future rather than the past and concentrate on the heights which they are determined to reach, not look back into the depths which they once fell.

In other words, they can so outlive their past mistakes by giving their lives to certain high and noble pursuits. In doing so, they will be able to concentrate on such challenging and enobling ideas that they will not have time for self pity.

The accomplished and the deported Nigerians both came back home to a country that lacks everything critical to development like industrialisation, electricity, infrastructure, health care and education.

It is unfortunate that Nigerias dream of vision 2020 toward the achievement of the best economy is like building a house without foundation. We cannot develop a nation without human resources. It is only investment in human resources that will ensure and guarantee the progress and development of a nation. Government has not given education the desired attention.

We are talking of the falling standard of education because people graduate from school without having an increased knowledge. The decay did not happen at once. It started a long time ago and gradually eroded the values in the system to the point of despair.

Government needs to declare a state of emergency in the educational sector or the nation risks a bleak future. No nation rises above the level or content of its educational system.

The Minister of Education, Dr. Sam Egwu disclosed that no fewer than 50 million adult Nigerians are illiterates which effectively places the country among the least educationally developed countries in the comity of nations. Over 7 million Nigerian children of school age have not had the privilege of aquiring formal education which has left a yawning gap in the education of the populace.

According to him, Nigeria and Pakistan were the two countries that have remained the least educationally developed countries. The Minister warned that the country’s vision 2020 might be unrealistic in the face of the prevailing situation except an urgent step was taken to revamp the educational sector.

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Foreign airlines charge premium passengers 23% more on Nigerian routes –Investigation

The preference for premium class seats by a lot of air travellers and the inability of the government to regulate the fares of foreign airlines means that passengers on Nigerian routes pay about 23 per cent more than travellers from other parts of the world, OYETUNJI ABIOYE writes.

Passengers on Nigerian routes pay about 23 per cent more on tickets for first class and business class seats than their counterparts in most parts of the world, investigation by our correspondent has revealed.

According to findings, there is a great disparity between the dollar per mile rate that foreign airlines charge premium passengers (first and business classes) on the Nigerian routes and most other international routes.

An analysis of some fares confirms that most of the airlines’ premium fares are about 23 per cent higher in Nigeria than most other global routes with similar flight time, mileage or distances.

A comparative analysis of some first and business class fares shows that Nigerians pay more on most routes.

For instance, a first class return ticket on the Lagos-Dubai route costs $4,695.5 on Emirates Airlines, while the Dubai-Johannesburg with almost the same mileage costs just $3,512. This shows that first class passengers on the Nigerian route pay about 33.5 per cent more.

According to data obtained from an airline global distribution company, the dollar per mile that the airline charges on the Lagos-Dubai route for first class passengers is $1.28, while it charges $0.89 on the Lagos-Johannesburg route.

Similarly, business class passengers pay 23.8 per cent more on the Lagos-Dubai route than their counterparts on the Dubai-Johannesburg route, according to the data.

Also, an average business class fare on the Lagos-Atlanta route, which costs $5,874 on Delta Airlines, is about 32.1 per cent higher than that of the Atlanta-Bombay route, which goes for $3,689.9 on the same carrier.

According to the GDS data, Delta charges its first class passengers $1.01 per mile on the Lagos-Atlanta route and $0.43 per mile on the Atlanta-Bombay route.

The data also shows that first class passengers are charged $1.41 per mile on the Lagos-Atlanta route, while their counterparts on the Atlanta-Bombay route pay $0.97.

The statistics also show that AirFrance charges its first class passengers on the Lagos-Paris route of 2919 miles about $8,984. Passengers pay $3.08 per mile.

However, first class passengers on the Paris-Bombay route with 4,349 miles pay $8,739, and are charged $2.0 per mile.

An aviation expert and airline economist, Mr. Gbenga Olowo, who confirmed this, linked the high fares on the Nigerian route to demand and psychological factors.

He said Nigerians’ penchant for travelling in first and business class cabins might have contributed significantly to the disparity in fares.

Olowo, who is also the President/Chief Executive Officer, Sabre Network, West Africa, a United States-based airline Global Distribution System, said “Empirical regular tariff data to different geographical zones show that demand and psychological factors do largely affect tariff fixing in different markets.

“In market economies, especially aviation, tariffs are not regulated as they are derived from so many factors: demand factors, psychological factors, mark up factors, antitrust competition rules, etc.

“Any profit-driven organisation, such as our foreign airlines, will attempt to maximise gains in any market for that matter. This is slightly evident in the dollar per mile figure for first and business classes en route Lagos and Europe, but not so in regular economy.

“However, the word, ‘discrimination,’ may not apply as airlines’ revenue and yield management technology have improved on passengers’ right to such extent that you can name your price but conditions do apply. Tariff without restrictions does attract higher fares.”

Olowo said the only way out was for Nigerian operators to compete effectively with the foreign carriers.

“If Nigeria seeks lower tariff than it is currently getting, then the indigenous operators must compete effectively. It is, however, unfortunate that Nigerian airlines are all individually very weak and highly indebted. Competition remains the key for improved services and economic tariffs,” he added.

The Coordinator, Akwaaba Travel Market, Mr. Ikechi Uko, said the airlines were only taking advantage of the large size of Nigeria’s market.

He advised government to carry out a comprehensive survey before giving any directive.

Enumerating the causes of the high fares, the Head, Research and Statistics, Zenith Travels, Mr. Olumide Ohunayo, said, “Nigerians are naturally ego-tripping and enjoy swimming in affluence, whether it is economical or not. Also, public travel expenditure is deregulated without ceiling; all what public officials pass to their audit departments is the ticket coupon or receipt.

“Moreover, lack of travel planning by most Nigerians and delayed approval and processing, which have become a norm, make those fares inevitably expensive. This, however, improves the yield and profitability of the foreign airlines.”

However, a prominent travel agency operator, who spoke under condition of anonymity, said the Nigerian government should be blamed for the exorbitant fare regime being implemented by the foreign airlines.

The operator, an executive member of the National Association of Nigerian Travel Agents, noted that even the economy fares are equally very expensive.

He said, “Our government should be blamed for this rip-off. Government is meant to regulate the foreign airlines’ fare regime, but they are not doing so. In other climes, the fares are regulated by the government. Our indigenous airlines too have joined them.

“One of the ways you can know is that, during the off-season when demand is low, you see some of these foreign airlines halving their fares in the name of promotional fares. Almost half of the seats in the planes are sold at this amount (a little less than 50 per cent of what is charged in normal seasons). Yet, they still make profit. The fact is that even if government, after a comprehensive investigation, decides to slash foreign fares by 25 per cent, the foreign airlines will still keep coming to Nigeria.”

A former spokesman of the liquidated national carrier, Nigeria Airways, Mr Chris Aligbe, said the government should take a cue from Ghana by engaging the foreign airlines in business discussions that would lead to reduction of fares.

Aligbe, who is the Managing Director, Belujane Konsult, an airline consultancy firm, said the majority of the foreign airlines operating in Ghana had low fare regime for their premium classes because the Ghanaian government engaged them in business discussions.

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Obtaining student visa with tears

In this report, SEGUN OLUGBILE who visited some foreign embassies in Abuja highlights the challenges being faced by young Nigerians in search of student visa to further their university education abroad

Frustration, anger and utmost apprehension were written boldly on the faces of youths, who gathered at the Ukrainian Embassy in Abuja on this hot Wednesday afternoon. Their mission was the same. They were there to obtain visa that would enable them to go and continue their studies in various universities in this eastern European nation.

Some of them from various states across the country had been there for as many as 20 times. The Nigerian security agents attached to the embassy had hectic time controlling the surging crowd of youths and some parents who accompanied their children. The embassy located on Parakou Crescent, off Aminu Kano Street, Abuja, did not provide shelter and seats for them. So they were left to the vagaries of the inclement weather that Abuja experienced in December.

Once in a while, an official of the embassy would come out to call out a number, the lucky applicant would rush in. And most of the few lucky ones that were given date for the oral interview, our correspondent gathered, had paid agents between N300,000 and N400,000. The same scenario played out at the Russian Embassy where frustrated prospective  students of universities in Russia were struggling to outdo one another to gain the attention of security operatives in the embassy.

One of the candidates, who simply identified herself as Oyin, said the embassies were capitalising on the increasing number of Nigerians seeking admission to universities in their countries to make more money from desperate Nigerians. This is true as findings revealed that each of the embassies had hiked the application form for visa from $45 in August to $90 in October.

Lucky applicants, it was gathered, paid between $1,000 and $1,200 after the application must have been granted. Due to the stringent conditions, most applicants were denied visa and subsequently lost their admission. Oyin, who had been admitted to the Lugansk State Medical University, Lugansk, Russia to pursue a degree in medicine, said she could not make the admission because she could not even secure a date for a meeting with the Russian Consul in Abuja let alone securing the visa.

“I had wanted to study medicine when I finished secondary school but I could not make the cut off point and therefore settled for a degree in Human Physiology. So, as soon as I completed my programme in 2010, I applied to Lugansk State Medical University in Russia. I was happy the day I got my letter of admission. I thereafter applied for visa and was asked to come and pick a date for the interview. The first day I came, what I met was an eyesore. Over 500 of us were there shoving and pushing ourselves, the security agents were not helping matters.’’

Though she got to the embassy around 6:30am, she left by 5:30pm after she succeeded in picking a number. That was on a Monday. The following Wednesday, she left her uncle’s place around 4am thinking she could get to the embassy early, do the interview early and left for home. But her assumption was wrong.

“When I got to the embassy around 4.45am, it was like a market. I was surprised to meet people there. It was as if people slept there. I waited till about 4.30pm when a Russian official just came and said they had  finished for the day. I was furious just like the other guys that I met there. That was how I have been visiting the embassy until one day in October, I did not get home until around midnight. This infuriated my parents and they stopped me from going there again. That was how I forfeited my admission.’’

Though she was expected to resume on November 15, her inability to get the visa had frustrated her ambition. When asked whether her university intervened on her behalf, she said yes. “The university wrote, I submitted all the necessary documents, I paid the visa application fee but unfortunately, I could not just get the visa,” she said.

Oyin had decided to go back home and participate in the mandatory national youth Service Corps scheme after which she might try to go to Canada for a degree in medicine.

At the Ukrainian embassy too, some young Nigerians narrated their travails to our correspondent. A graduate of the University of Nigeria, Nsukka, Enugu State, Chima Ndukwe, said that though he had spent over  N250,000 on transport and hotel accommodation to and from Abuja from Lagos, he had not been able to secure a date for the interview.

He alleged that corruption and influence peddling by “some big men” and the lack of respect for Nigerians by the Ukranian Embassy officials were some of the factors frustrating  young Nigerians desiring foreign education.

“Nigerian government should do something about higher education in this country. These people treat us with disdain. When Nigerian university system was good, how many Nigerians  would go to Ukraine to go and study? Look, these people have no respect for us and unfortunately, our Nigerian brothers who are posted there as security agents are not helping matter. I’ve spent over N250,000 on transportation and accommodation from Lagos to Abuja.

“I’ve been coming since September and this is December and by rule I’m supposed to resume on November 15 although the university has said that I could come in January but with the way things are going, I don’t think that the visa application would be successful because as I’m talking to you now, what I have been able to do is just to get the number and as at now (3.43pm) only about three applicants had been called in. They would soon come out to tell us to go,” he said.

When our correspondent attempted to take a photograph of the crowd, one of the mobile policemen attached to the embassy prevented this, saying that  doing so was illegal. He threatened to give our correspondent the Boko Haram treatment if his order was disobeyed. The security man only directed our correspondent to the notice board placed at the fence of the embassy for information about the visa application process. “Mr. Journalist, you cannot enter the embassy and you must not take any photograph,  if you need any information go to that notice board,” he said.

On the noticeboard, the embassy just listed the procedure for student visa  and this include submission of letter of admission, letter of the sponsor and statement of account, identification letter as a Nigerian from the Federal Ministry of Foreign Affairs and the approval of education certificates presented by applicants by the Federal Ministry of Education.

However, it was alleged that sharp practices involving some top Nigerian officials in the Federal Ministry of Education and the finance ministry were some of the factors that enhanced the stringent conditions for the visa application.

One of the applicants, who pleaded not to be named for fear of possible persecution, said that top officials of the Federal Ministry of Foreign Affairs were colluding with some officials of these foreign embassies to compromise the process.

“I know people who bribed their way with about N250,000 to secure the visa after which they still have to pay the official visa fee,” he said.

But when our correspondent visited the ministry, officials, who spoke on condition of anonymity, denied the allegation.

“We don’t issue visa, the only thing we do is to confirm the identity of applicants as Nigerians while the Federal Ministry of Education authenticates the certificates presented by applicants. On the issue of bribery, I cannot say anything about that,” the source said.

However, a parent, who simply identified herself as Mrs. Ogunnoiki, said though she did not give anybody bribe, it was not impossible that some highly placed Nigerians could be compromising the process.

“What I don’t like about the whole process is the way and manner these oyinbo people are treating Nigerians in Nigeria. They are using policemen and soldiers to harass us and our children, thereby subjecting us to psychological trauma. All through the period I went there, apart from the money we wasted, we were made to sit in the sun for hours all the time we were there.

Her daughter had secured admission to Crimea Medical University, Crimea in Ukraine to study medicine and since she got the admission letter, they had been shuttling between Port Harcourt where Ogunnoiki works as a lawyer and Abuja, where the Ukrainian embassy is located.

“Unfortunately, we couldn’t  secure the visa. We had to give up. We will try another university in another foreign nation in Europe in 2012,” she said.

Ogunnoiki, therefore, called on the Federal Government  to develop the nation’s universities. Our  lecturers are good but we lack equipment and teaching facilities. The Federal Government should provide them with tools to work with and motivate them with good welfare package, then all these foreign nations will stop treating us with disdain,” she said.

But why are Nigerians seeking foreign education? Some Nigerians, including the Executive Secretary, Association of African Universities, Prof. Olagbemiro Jegede; and the President, Nigerian Academy of Science, Prof. Oye Ibidapo- Obe, said that inadequate access, irregular academic calendar and preference for foreign certificates by employers of labour had combined to make foreign university education attractive to Nigerians.

Jegede, however, warned Nigerians seeking foreign university education to be wary of where they go to in search of such education. “We don’t cherish what we have but I will not blame people who go in search of foreign education, I will only warn that they should be careful in making their choices because not all foreign universities are good,” he said.

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Cashless Lagos takes off amid anxiety

Written by Odidison Omankhanlen

The much talked about cashless Lagos formally commenced on Sunday amid further clarifications from industry regulators and top state government officials.
The cashless policy, an initiative of the Bankers’ Committee, was introduced by the Central Bank of Nigeria (CBN), to drive development and modernisation of the nation’s payment system in line with the Vision 2020.
It is meant to gradually move the nation away from a cash-based economy to electronic payment system in line with what obtains in developed economies of the world.
Lagos State had been chosen as the pilot project before spreading to some key cities in the country by June this year.
Investigations by the reporter showed that though the policy took off during the public holiday when banks were not open for business, the CBN, banks and Lagos State government officials had spent the last few weeks enlightening members of the public on the desirability and modalities for effective implementation of the policy.
Only last week, the apex bank shifted the service charges/fees for those transacting cash above the stipulated amount in Lagos to March 30, 2012, stressing that it was in order to give people time to migrate to electronic channels and experience the infrastructure that had been put in place.
“Therefore, banks should continue to encourage their customers to migrate to available electronic channels, and where possible demonstrate the costs that will accrue to those that continue to transact high volumes of cash from March 30th, 2012 in Lagos State.”
CBN explained that the service charge for daily cumulative deposits above the limit into an account would be borne by the account holder, noting that during the pilot in Lagos, individuals paying money from Lagos, into an account outside Lagos, would bear the charges for any single transaction above the daily limit.
“Charges/fees shall apply for all transactions in Lagos, and on Lagos State based accounts. Transactions initiated out of Lagos State, and affecting a Lagos based account shall not attract charges/fees, and shall not be counted as part of the daily,” it stated.
The limits are cumulative daily limits each for withdrawal, and for deposits. For individuals, the daily free withdrawal limit is N150,000; while the daily free deposit limit is N150,000. The limits apply to the account so far as it involves cash, irrespective of channel for example over the counter, ATM, 3rd party cheques encashed over the counter, etc in which cash is withdrawn or deposited.
For instance, if an individual withdraws N50,000 over the counter, and N150,000 from the ATM on the same day, the total amount withdrawn by the customer is N200,000, and the service charge will apply on N50,000 – the amount above the daily free limit). The limit also applies to cash brought through CIT companies, as the CIT company only serves as a means of transportation.

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Philippines extends ban on workers to Nigeria

 

The Philippines said yesterday it would extend a ban on sending workers to
Nigeria after Christmas Day bombings in the country left 35 people dead.

The two-year-old ban was to have been lifted by January 1 to allow the
movement of thousands of Filipinos seeking to work in Nigeria’s booming energy
sector. But the wave of bombings has raised fresh security fears, and the ban
will now remain in place for at least three more months, the foreign department
said in a statement.

The Philippine government imposed the ban after a
series of Filipino workers were kidnapped in the Niger Delta region between 2006
and 2009. The labour ministry had recommended the ban be lifted days before the
bombings occurred. The attacks were blamed on the Islamist group Boko
Haram.

The mainly Catholic Philippines is a major labour-exporting
country, with about 10 percent of its 94 million population working abroad, many
as maids, seamen, construction workers and labourers.

 

 

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The cost of one Litre of Petrol

A revealing, fresh, factual perspective to the ongoing debate on fuel subsidy. Dr. Izielen Agbon, a petroleum engineer and an economist, here says there is no fuel subsidy rather, Nigerian petrol is over prized at N65 a litre.

ON December 10, 2011, if you stopped at the Mobil Filling Station on Old Aba Road in Port Harcourt, you would be able to buy a litre of petrol for N65 or $1.57 per gallon at an exchange rate of $1/N157 and 3.875 litres per gallon. This is the official price. The government claims that this price would have been subsidized at N74/litre and that the true price of a litre of petrol in Port Harcourt is N139/litre or $3.35 per gallon. They are therefore determined to remove their subsidy and sell the gallon at $3.35.

But, On December 10, 2011, if you stopped at the Mobil Gas Station on E83rd St. and Flatlands Avenue in Brooklyn, New York, U.S., you would be a able to buy a gallon of petrol for $3.52. Both gallons of petrol would have been refined from Nigerian crude oil. The only difference would be that the gallon in New York was refined in a U.S. North East refinery from Nigerian crude exported from the Qua Iboe Crude Terminal in Nigeria while the Port Harcourt gallon was either refined in Port Harcourt or imported. The idea that a gallon of petrol from Nigerian crude oil would cost nearly the same in New York as in Port Harcourt runs against basic economic logic. Hence, Nigerians suspect that there is something irrational and fishy about such pricing. What they would like to know is the exact cost of one litre of petrol in Nigeria. We will answer this question in the simplest economic terms despite the attempts of the Nigerian government to muddle up the issue.

What is the true cost of a litre of petrol in Nigeria?  The Nigerian government has set aside 445,000 barrels per day throughput for meeting domestic refinery products demands. These volumes are not for export. They are public goods reserved for internal consumption. We will limit our analysis to this volume of crude oil. At the refinery gate in Port Harcourt, the cost of a barrel of Qua Iboe crude oil is made up of the finding /development cost   ($3.5/bbl) and a production/storage /transportation cost of $1.50 per barrel. Thus, at $5 per barrel, we can get Nigerian Qua Iboe crude to the refining gates at Port Harcourt and Warri. One barrel is 42 gallons or 159 litres.

The price of one barrel of petrol at the depot gate is the sum of the cost of crude oil, the refining cost and the pipeline transportation cost. Refining costs are at $12.6 per barrel and pipeline distribution costs are  $1.50 per barrel. The distribution margins (retailers, transporters, dealers, bridging funds, administrative charges etc) are N15.49/litre or $15.69 per barrel. The true cost of one litre of petrol at the Mobil Filling Station in Port Harcourt or anywhere else in Nigeria is therefore ($5+$12.6+$1.5+$15.7) or $34.8 per barrel. This is equal to N34.36 per litre compared to the official price of N65 per litre. Prof. Tam David-West is right. There is no petrol subsidy in Nigeria. Rather the current official prices are too high.

Let us continue with some basic energy economics.  The government claims we are currently operating our refineries at 38.2 per cent efficiency. When we refine a barrel of crude oil, we get more than just petrol. If we refine one barrel (42 gallons) of crude oil, we will get 45 gallons of petroleum products. The 45 gallons of petroleum products consist of four gallons of LPG, 19.5 gallons of gasoline, 10 gallons of diesel, four gallons of jet fuel/kerosene, 2.5 gallons of fuel oil and five gallons of bottoms.  Thus, at 38.2 per cent of refining capacity, we have about 170,000 barrels of throughput refined for about 2.57 million litres of LPG, 12.55 million litres of petrol, 6.43 million litres of diesel and 2.57 million litres of kerosene/jet fuel, 1.61 million litres of fuel oil and 3.22 million litres of bottoms. This is not enough to meet internal national demand. So, we send the remaining of our non-export crude oil volume (275,000bpd) to be refined abroad and import the petroleum products back into the country. We will pay for producing the crude oil, shipping the crude oil to the foreign refineries, refining the crude oil and shipping the petroleum products back to Nigeria.

The Nigerian government exchanges the 275,000bpd with commodity traders (90,000bpd to Duke Oil, 60,000 barrels per day to Trafigura (Puma Energy), 60,000bpd to Societe Ivoirienne de Raffinage (SIR) in Abidjan, Ivory Coast and 65,000bpd to other sources) in a swap deal. The landing cost of a litre of petrol is N123.32 and the distribution margins are N15.49 according to the government. The cost of a litre is therefore (N123.32+N15.49) or N138.81. This is equivalent to $3.35 per gallon or $140.74 per barrel. This is the price that the Nigerian government wants its citizens to pay. However, the landing cost is made up of the international cost of a barrel of crude oil, the shipping cost of the crude oil to the foreign refineries, the refining cost and the shipping cost of the refined products back to Nigeria (North West Europe to West Africa – WS100). Let us explain further.

A barrel of Nigerian Qua Iboe Crude oil cost $107 at the North European Rotterdam market. In technical terms, one barrel of Qua Iboe crude oil has a volume yield of 6.6 per cent of AGO, 20.7 per cent of gasoline, 9.5 per cent of kerosene/jet fuel, 30.6 per cent of diesel, 32.6 per cent of fuel oil /bottoms when it is refined. Using a netback calculation method, we can easily calculate the true cost of a litre of imported petrol from swapped oil. The gross product revenue of a refined barrel of crude oil is the sum of the volume of each refined product multiplied by its price. Domestic prices are $174.48/barrel for AGO, $68.53/barrel for gasoline (PMS or petrol), $172.22/barrel for diesel oil, $53.5/barrel for kerosene and $129.68/barrel for fuel oil. Our gross product revenue per swapped barrel would be (174.48*0.066 +69.55*0.207+ 172.22*0.306+ 53.5*0.095+129.68* 0.326) or $125.20 per barrel. We have to remove the international cost of a barrel of Nigerian crude oil ($107 per barrel) from this to get the refining gross margin of imported swapped petroleum products. The refining gross margin is the difference between the gross products revenue (the sum of the volume of each refined product multiplied by its price) and the cost of the crude oil. The refining gross margin of swapped petroleum products would therefore be $125.20 -$107 or $18.20 per barrel.

The total cost of the petroleum products from swapped crude oil is the sum of the cost of production/storage, pipeline distribution cost, the cost of shipping the crude to the foreign refineries, the gross refining margin and the distribution margins. It cost $5 per barrel to produce and store the crude oil and $1.50 per barrel pipeline distribution cost to get it to the Qua Iboe Crude Terminal. The freight cost to Europe (the furthest refinery is Trafigura) is $2.50 per barrel. The refining gross margin is $18.2 per barrel and the distribution margins (retailers, transporters, dealers, bridging funds, administrative charges etc) are N15.49/litre or $15.69 per barrel. Thus the total cost of the imported PMS is ($5+$1.50+$2.50+$18.20 +$15.69) or $42.89 per barrel. This comes out to be a total cost of N42.36 per litre. This is the true cost of a litre of imported swapped petrol and not the landing cost of N139 per litre claimed by the government.

The Nigerian government did not sell the 275,000 barrels per day to Duke Oil, Trafigura (Puma Energy), Societe Ivoirienne de Raffinage (SIR) in Abidjan, Ivory Coast and other commodity traders at international prices in its swap deal. Rather, it wants Nigerian citizens to pay for the swapped oil at this price. This is the economic logic defined by the ideological prism of the World Bank. The pro-subsidy Nigerian government imbeds the cost of the swapped crude oil at international prices into the landing cost of $140.74 per barrel (N139 per litre). The government therefore argues that the “subsidy” is N139-N65 or N74 per litre. By imbedding the cost of crude oil at international prices in the landing cost, the Nigerian government is trying to sell the crude oil to Nigerian citizens (including indigenes of oil and gas host communities in the Niger Delta) at international prices as if they are foreigners in their own country with no claims whatsoever to their natural resources. This is the political implication of the government economic calculations and its demand for the removal of a non-existent petrol subsidy. We are foreigners in our own motherland. Therefore, we must pay for Nigerian crude oil like foreigners do.

So let us conclude this basic economic exercise. If the true price of 38.2 per cent of our petrol supply from our local refinery is N34.36/litre and the remaining 61.8 per cent has a true price of N42.36 per litre, then the average true price is (0.382*34.36+0.618*42.36) or N39.30 per litre. The official price is N65 per litre and the true price of petrol in Nigeria is N39.30 per litre (even with our moribund refineries and imports). There is therefore no petrol subsidy. Rather, there is a high sales tax of 65 per cent at current prices of N65 per litre.

The labour leaders meeting the President should go with their economists. They should send economists and political scientists as representatives to the Senate Committee investigating the petroleum subsidy issue. The labour leaders should not let anyone get away with the economic fallacy that Nigerians must pay international prices for Nigerian crude oil as if we are foreigners in our own country. The government should explain why it wants to sell Nigerian crude oil at international prices in a domestic market. It should explain why we must become foreigners in our own country because it promises to develop the country with the excess funds just like the Abacha regime had promised to do.

We have done this simple economic analysis of the Nigerian petroleum products market to show that there is no petrol subsidy what so ever. In the end, this debate on petrol subsidy and the attempt of the government to transfer wealth from the Nigerian masses to a petrol cabal will be decided in the streets.

• Dr. Agbon spent the last 30 years working in academia and the oil and gas industry.

Posted in Nigerian News, Relocating to Nigeria0 Comments

Zungeru: Nigeria’s neglected birthplace

Zungeru is a town in the present Niger State and can be said to be the birthplace of Nigeria and many prominent Nigerians. The pact bringing Nigeria into being was signed there and a number of colonial relics scatter all over the town.  The first Nigeria’s indigenous Governor-General, Dr. Nnamdi Azikwe, Ikemba Nnewi, Chief Odumegwu Ojukwu and the incumbent Senate President, David Mark, were all born there, yet the historic community, which ought to be a tourist centre, begs for development. ADELOWO OLADIPO reports.
LITTLE was known about it prior to the advent of the British colonialists who were undoubtedly looking for a conducive place to settle down. With its clement weather and proximity to Kaduna River, Zungeru, a historical town in Niger State where the Northern and Southern protectorates of Nigeria were later amalgamated, easily caught the attention of the colonialists who used the town as their operational base.
The colonialists, some of whom employees of the Royal Niger Company, had combed towns and villages in a place later to be named Nigeria, prospecting for the company. Lord Lugard, the Governor-General of Nigeria between 1914 and 1919, for instance, was in Jebba and Lokoja where he settled down for a while before he later shifted his base to Zungeru, the then emerging trading point in Nigeria.
With the coming of the colonialists, Zungeru, an erstwhile Gwari-Nupe settlement, shot into limelight and drew people from the length and breadth of the country who settled down there. Being an emerging base of a yet-to-be-created nation and the European lifestyle as well as the desire of many to seek a greener pasture outside their towns and villages, people from different parts of the country were motivated to migrate to the town.
Zungeru served as the birthplace of the Nigeria’s first indigenous Governor-General, Dr. Nnamdi Azikwe, the late Biafran leader, Chief Emeka Odumegwu Ojukwu, the incumbent Senate President, Senator David Mark and many other Nigerians who later rose to stardom in the country. The town is home to European military cemetery, a colonial market,  the amalgamation office, colonial prison, colonial Government House and a bridge built by colonialists as well as many other historical centres.
Sunday Tribune visited the town recently and discovered that Zungeru has been abandoned. All the structures have either collapsed or taken over by the federal highway that passes through the community. However, some of these colonial buildings, though collapsed, still have their foundations intact, except that during the raining season, they are usually overgrown with weeds.
According to Alhaji Abubakar Yusuf, the spokesman of the community, Zungeru has become the shadow of its former self. He said the problem of the town started when late Queen Elizabeth of England instructed Lord Lugard to leave Nigeria for India and Hong Kong with a view to introducing indirect rule in those two countries.
“Thereafter, somebody came to take over from him in Nigeria and the person was Brigadier Thomson Wallace, also of blessed memory. It was this man that complained of harsh weather as well as saying that so many members of the then Armed Forces were falling sick as a result of malaria caused by mosquito bites.
“He was asked to select other suitable places in Nigeria at the period and he chose Kaduna. That was exactly the foundation of what has led to the abandonment of Zungeru till date. Thereafter, Lord Lugard moved to Kaduna, after the completion of his action plan in 1916.”
He stressed that the British military cemetery in the community contained the remains of the first detachment of soldiers of the West African Frontier Force who were buried there, especially those who fought in the World War II. The military cemetery, according to him, consists 50 burial grounds of foreign soldiers and five Nigerians that were buried close to the enclosed cemetery. The Nigerian Railway Corporation (NRC), he said, started in Zungeru.
“We used to have a locomotive engine called Wushishi, now at Minna railway station. We also had a town hall where Lord Lugard used to assemble the community members, which is now a market square in the middle of the town,” Alhaji Yusuf added.
A prominent researcher resident in Zungeru, Malam Mohammed Jibrin, stated that the parents of late Emeka Odumegwu Ojukwu worked with the colonial masters for several years as clerks before leaving for Lagos in 1918 after the white men left for Kaduna in 1916.
Malam Jibrin, who took this reporter to the relics of the family compound where late Emeka Ojukwu was born, said even though (he) Emeka and his parents did not come back to Zungeru since they left the town, the fame the family brought to the town and even Nigeria as a whole was enough for the people of the community to identify with him even in death.
“Let us not deceive ourselves; Emeka played an important role in Nigeria and across. I remember him with this simple quotation, ‘How can we be immigrants in our father’s land? We fought to unite, why should we fight again to disunite?’”
He lamented the abandonment of the town, noting that the relics of the colonial buildings in Zungeru ought to have been rebuilt and turned into tourist centres for people within and outside the country.
He said the office where the amalgamation took place in 1914 was still there and not renovated.  According to him, “Zungeru is the home of Nigeria, but unfortunately it has been disowned by its own people. The British High Commissioner to Nigeria, Andrew Lloyd, was here recently. His counterpart from Australia, Ian Mccogvilce, also visited this town to inspect the relics scattered all over Zungeru. Some people from the United Kingdom came back to Zungeru with enthusiasm to inspect the tombs of their grand parents who died during the colonial days in the town. So, you can see the role this town played and can still play as a tourist centre for both Nigerians and foreigners alike if properly developed.”

Posted in Nigerian News, Relocating to Nigeria, Tourism0 Comments

US Government in support of fuel subsidy removal in Nigeria

The United States Ambassador to Nigeria, Terence McCulley has said that  his country’s government is in support of the planned removal of fuel subsidy in the country.
The ambassador made the statement in Abuja on Monday during a visit to the Minister of Labour and Productivity, Chief Emeka Wogu.
A statement signed by the Assistant Director for Media in the Ministry, Samuel Olowookere, said the visit was to enable the ministry to sensitise the U.S. embassy on the challenges  facing the Federal Government with regards to job creation and to  seek ways to collaborate in solving them.
The U.S. ambassador said the creation of jobs through diversification of the economy was a welcome development.
‘’We will look for ways to partner with you to bring in the U.S business people to invest in this area and create jobs as Nigeria is central to President Barack Obama’s National Export Initiative designed to export goods and machinery to the country . This  would benefit the Nigerian economy,’’ the News Agency of Nigeria quoted Mr. McCulley as saying during the visit.
Wogu said although unemployment was  not peculiar to Nigeria, ‘’job creation and employment generation is at the fore-front of the transformational agenda of President Goodluck Jonathan.
‘’Unemployment is a global thing and the U.S government is also battling it the same way we are tackling this problem in Nigeria’’.
According to him, the removal of fuel subsidy would create revenue for capital projects which would result in job creation.

Posted in Nigerian News, Relocating to Nigeria0 Comments

Unhappy families: UK is third worst in Europe for home life

By Jonathan Owen

Government has let down parents and children as debts and long working hours exact a major toll on Britons, says new research.

Britain is one of the worst countries in Europe for families, according to a study released today by the Relationships Foundation. High levels of debt and poverty, coupled with long and unsocial working hours, are major contributing factors, the report, Family Pressure Gauge, reveals.

Its research paints a picture of a country where, in stark contrast to David Cameron’s pledge to make Britain the “most family-friendly” nation in the world, British families are among the most pressured in Europe, only ahead of Bulgaria and Romania.

Stress from money and work worries, along with a lack of support for parents and poor living conditions, are all factors, the report finds. It recommends urgent reform to the way families are helped, with one in five families struggling to make ends meet.

The report also reveals that 14 per cent of families are suffering “critical” levels of debt, compared to 1 per cent of Swedish, Finnish and Norwegian households.

In addition, almost a quarter of the average British working family income goes on childcare costs – double the percentage spent by French families and three times that for German families.

One in seven families spend more than 40 per cent of their income on the rent or a mortgage. In contrast, just 1.8 per cent of the French population are in this situation.

Britain also ranks as the second worst country in Europe for maternity and paternity leave, with new parents receiving less than ten weeks fully paid time off on average.

One in 20, or 340,800, British families live in “severe housing deprivation” – in overcrowded homes in poor condition, without a bath, shower or indoor toilet, for example. This is 12 times more than in the Netherlands, and significantly worse than in the Nordic countries, Germany and Spain.

The report provides the most comprehensive picture to date of how British families fare compared with counterparts in 26 European countries, based on an analysis of 25 indicators, including pressures of money, work, parenting and living conditions. It draws on data from the European Union, the Organisation for Economic Co-operation and Development and the European Commission.

Although work is seen as a route out of poverty, it can also be a source of additional pressure, with Britons working some of the longest hours in Europe – on average, 43 a week.

Long working hours can affect health and time for family relationships, according to the report. It states that 78 per cent of British workers do not have flexible working hours.

It accuses the Government of a lack of focus on its family agenda, noting that the Childhood and Families task force, set up in June last year, had “delivered nothing”, that pledges on flexible working had been “reneged upon”, with a Budget that “did little to engage with pressures on families”. It added that the plight of families, already buckling under the strain of debts, is set to worsen.

This comes at a time when a record 2.1 million children in Britain live in poverty, despite the fact that one or both of their parents work, according to the Joseph Rowntree Foundation. The figure has soared by 400,000 in the past five years, undermining the mantra that people can work their way out of poverty.

The Government’s “warm words on family friendliness are fast becoming cold comfort,” according to Michael Trend, executive director of the Relationships Foundation.

He added: “Sideline family policy and you court systemic failure… A year on from the general election, it is time the Government got its act together on family policy.”

Rhian Beynon, head of policy at Family Action, warned: “Changes to welfare support and high inflation mean that family finances are increasingly tight, placing a strain on families. If the Government doesn’t sort this out the pressure on families will only increase.”

‘We’re under such pressure’

Former IT manager Stephen Russell, 53, lives in Cheltenham with his wife, Susan, 50, and children Lauren, 25, Ethan, 17, and Eleanor, 16

“I worked in IT for 17 years and was unexpectedly made redundant last summer. We had a daughter going through university, and losing my job was one squeeze too far. We had developed debt over the years, making some financial mistakes like so many do, with one too many credit cards, things like that. We aren’t drinkers, don’t gamble or go on foreign holidays; we don’t run an expensive car. We live fairly simple lives but it’s got expensive. The mortgage is the killer. We owe £160,000 and are paying the interest only right now. We also have debts of about £32,000 – it sounds horrendous every time I say it. I work as a night carer for a 97-year-old lady, something of a turnaround. I needed to prove to myself that I could generate income for the family and I didn’t mind what I did.

Before, I was on a salary of about £35,000 a year plus benefits. I now earn about £350 a week – a considerable change in circumstances – and I’m working 50 hours a week for that.

My wife has two jobs and, between us, we’re doing an average of 100 hours a week at the moment. Time with all of us together is unusual.

I don’t think David Cameron’s vision of a family-friendly Britain is realistic, but it’s a great soundbite. As far as families are concerned, I think we’ve never been under so much pressure, both financially and economically.”

‘We struggle to pay the bills’

Gemma Dawson, 21, lives in Wakefield with her partner, Chris, 31, and their two young children, Summer, 15 months, and Bradley, two

“I used to be a claims adviser for a car insurance company, but I left to start up my own business selling party supplies online. The cost of childcare – about £900 a month – forced me to work from home.

I work about 10 hours a day. Chris works as a bingo caller four days a week, for 14 hours a day. He earns about £14,000 a year and at the moment I earn only around £1,000 annually because I’m still in the process of building up the business.

We struggle to pay the bills, like a lot of families.

We don’t spend much time really together, maybe one night a week. The main pressure is definitely financial, to afford things, and I think money is probably the main factor we argue about. It’s like we are working just to pay the bills. We scrimp by but we’re not actually working to live a life.”

 This is in contrast with most African countries where even though they are on a much lower income they are much happier as a family unit. Nigeria was recently rated as the country with the happiest people on earth.

Posted in Nigerian News, Relocating to Nigeria1 Comment

Swaziland: We want Nigerian Investments and professionals: Envoy

 

Swaziland has urged Nigerians to invest in its banking, telecommunications and agriculture sectors, Nigeria’s Acting Commissioner to South Africa, Mr Bassey Archibong, has said. 

 

 

Archibong told the News Agency of Nigeria (NAN) yesterday in Johannesburg that the Swazis’desire to do business with Nigerians was discussed with the leadership of its investment promotion authority during his visit to the country.

“For now, the only banks in Swaziland are South African banks and they want Nigerian banks to come on board, while in telecommunications, they have only MTN,” he said.

Archibong said the country was optimistic that the investment would boost Swaziland’s economy.

Apart from investors, Archibong said he also held discussions with authorities in the health and education sectors on the possibility of restarting assistance through the Technical Aids Corps (TAC) scheme which was stopped in 1999.

“The last set was in 1999. So now, they want us to send science and mathematics teachers and doctors and they are so enthusiastic,” Archibong said.

The envoy said many Nigerian professionals were doing well in the country.

Archibong, who described his visit to Swaziland as “very fruitful,’ said no fewer than 3,000 Nigerians were resident in the country.

He said the immigration unit at the Consulate planned visits to Swaziland to ease the acquisition of the new passports by Nigerians there.

The Acting High Commis-sioner restated his resolve to ensure that Nigerians were treated fairly in the country.

Posted in Nigerian News, Relocating to Nigeria1 Comment

Lagos unfolds blueprint for homeownership mortgage scheme

written by Tunde Alao

FOLLOWING the clamour for the introduction of best practices in mortgage finance, Lagos authorities have unfolded guidelines for residents who want to own houses through its home ownership scheme.

Under the initiative tagged Lagos State Home Ownership and Mortgage Scheme (LSHOMS), the state plans to provide funds for the mortgage facility, apart from providing the pool of houses.

The scheme affords the first time homebuyers, who are resident in Lagos, the opportunity to own their homes. Features of the scheme include a tenor minimum of 10 years and maximum of 20 years, while the Facility Amount will be subject to the 70 per cent balance of the cost of the type of houses purchased.

The scheme, promoted by the state’s Ministry of Housing, allows the applicant who must be first time buyers to provide an equity contribution, which is a minimum equity contribution of 30 per cent value of the property he/she intends to buy with interest rate of six per cent. For instance, the beneficiaries of the pilot scheme – civil servants, are expected to pay an initial fee of N10,000, and administrative charges N25,000.

According to an official of the ministry, Mr. Shina Odugbemi, the scheme tends to provide a standardisation for administering the LSHOMS to all residents of Lagos State. “Though priority will be given to civil servants in Lagos State ministries and parastatals, with the overall target being residents of the state irrespective of tribe or language”.

The purpose of the scheme, according to ministry officials, is to encourage first time homebuyers with verifiable source of income to own their own houses.   “Affordability implies that for low and medium income earners to be able to buy houses, there must be in place a mortgage finance system and one of the major challenges that impedes home ownership in Nigeria is the inadequacy of the mortgage sector.

“There is provision for equal periodic principal repayment, with interest to be paid on reducing balance or equal monthly installment of both principal and interest.

The Guardian learnt that already, three banks, namely First Bank of Nigeria Mortgages, Skye Mortgages and Zenith Bank Plc are to administer the scheme.

In fact, successful applicants who have submitted their application forms will be directed to any of these banks for pre-qualification bid.

“All applicants pre-qualified and recommended by any of the receiving banks will be issued with letter of offer while such applicants are expected to pay the 30 per cent equity contribution to any of the three collaborating banks”, he said, adding that applicants would submit proof of payment and an acceptance letter to Ministry of Housing.

Similarly, to ensure that the legal aspects are duly followed, the Ministry of Housing would refer all documents to Ministry of Justice to prepare and execute “Contract of Sales and Deed of Mortgage Agreements”, after which the Housing Ministry releases letter of confirmation of allocation to the successful applicants for possession.

Condition and eligibility for qualification for the scheme are that applicant must reside in Lagos and must be under 60 years of age. He or she must have a verifiable means of income and “should be credit worthy”.

“Successful applicants are expected to pay 30 per cent of the value of the house they intend to purchase and it should be noted that houses purchased under the scheme must be occupied by the beneficiary and cannot be transferred or rented out until all obligations have been fulfilled.”

Apart from the above, beneficiaries are to pay six per cent interest rate on the mortgage loan and must have been working for current employer for at least six months, which must be confirmed.

According to the ministry’s document – “Global Term Sheet for Lagos Ownership and Mortgage Scheme”, objectivity of the scheme, the state government will first pre-qualify the intending beneficiary who must be a first time home owner in Lagos and the claim of first time home ownership must be administered under an oath.

Other criteria include the pre-qualified individual must open an individual current account with the bank. The account will serve for both the purpose of paying the 30 per cent equity contribution and also for monthly repayment.

Secondly, the beneficiary will submit his/her allocation paper from LASG to the bank along with request letter and apply for a mortgage scheme under Lagos State Home Ownership Mortgage Scheme. Upon meeting the Risk Acceptance Criteria (RAC), approval will be conveyed via an offer letter and monthly repayment schedule communicated to the beneficiary.

Thirdly, for proof of affordability, salary earners are to submit pay slips for the past six months and salary account statement for the past one year while self-employed would submit company profile, three years audited account statement and business/personal account statement for the past 12 months.Lastly, monthly repayment as stated in the repayment schedule commences as soon as offer is accepted and condition precedent to commencement of monthly repayment is met. Thereafter, the bank will communicate acceptance and approval to LASG for release of keys to the beneficiary to take possession.   Update on monthly repayment will be given to LASG on monthly basis while a dedicated account will be opened, which will warehouse all monthly payment from the buyers, which would have joint signatories from the Ministry of Housing and Ministry of Finance.

“Event of default may occur if the beneficiary fails to make repayments for three consecutive times and if repayment has not been regular, which in the opinion of the banker has raised doubt on the ability of the beneficiary to continue with the repayment. In such situation, such issues will be reported to the government who will take steps towards foreclosure,” according to the document.

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