1 / 46

Explanatory Notes

Explanatory Notes. Central Bank of Nigeria (CBN) Supported National Sub-Structure Private Sector Integrated Support Framework(PSISF) Development Model For Real Sector Development in Nigeria. Anthill Concepts Limited 8B Kayes Street Zone One Abuja. Executive Summary.

alaula
Download Presentation

Explanatory Notes

An Image/Link below is provided (as is) to download presentation Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author. Content is provided to you AS IS for your information and personal use only. Download presentation by click this link. While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server. During download, if you can't get a presentation, the file might be deleted by the publisher.

E N D

Presentation Transcript

  1. Explanatory Notes Central Bank of Nigeria (CBN) Supported National Sub-Structure Private Sector Integrated Support Framework(PSISF) Development Model For Real Sector Development in Nigeria Anthill Concepts Limited 8B Kayes Street Zone One Abuja

  2. Executive Summary • The present global socio-economic realities in the light the Nigerian import substitution model has placed the economy in a precarious situation • Oil rents together with the distributional, consumption oriented politics that developed around them have not only underdeveloped Nigeria but also emasculated the prospects for future prosperity. • Recent reports show that the economy stands the risk of complete system collapse if the international oil price falls at below $30 per barrel • The NEEDS document and WORLD BANK reports identify the Solid Minerals and Agriculture Sub Sets as critical to National development and Mass employment . • The NEEDS document states that the earnings from Solid Minerals can supersede that earnings from the Oil sector • The national sub structure model using the Private Sector Integrated Support Framework( PSISF) is presented as an alternative to the perennial economic challenges afore-listed

  3. Sources of Prosperity Inherited Prosperity Created Prosperity • Prosperity results from increasing productivity in producing goods and services • - Prosperity is unlimited • Prosperity is derived from inherited natural resources • - Prosperity is limited if: • Companies are the central actors in the economy • Government’s role is to create the enabling conditions for productivity and foster private sector development • Government is the central actor in the economy • - Resource revenue /allocation practices that fuel corruption and allow unproductive policies and practices exist PSISF DRIVEN SUBSTRUCTURE MODEL

  4. Overview of the Prevailing National Economic Structure • Agriculture though the largest contributor in the entire non oil sector is still bogged down by poor data and low quality private sector investment inadequate funding ,seasonal cropping, desertification dysfunctional land ownership and tenure • The Solid Minerals (which has the capacity to do more) and indeed the Manufacturing sectors contributes minimally to the GDP and is bogged down with weak or non existent industry linkages, low demand and high cost of local products, influx of cheap and sub standard goods, low access to finance and high interest rates • Consequently, Nigeria's social safety net is very weak, it is estimated that 44 % of the urban residents are poor while 64% of the rural dwellers live below the poverty line

  5. The CBN Supported (PSISF) Driven National Sub Structure Model • Off Taker • Component • (Infrastructure) • Establishment of demand critical human and social infrastructure on clear cut and defined private sector driven, project based finance models and partnerships • Establishment of integrated processing facilities in contigual locations in Nigeria • Upstream • Component • (Power/Energy) • Effective utilisation of available power and development of demand driven of off grid power plants on available hydro /Gas potentials to drive energy needs of value added facilities • Downstream • Component • (Solid Minerals/ • Agriculture) • Establishment of solid mineral projects for the production of strategic materials for Nigeria’s economic growth • Establishment of Animal husbandry with a target of 50 million livestock across eleven states of Northern Nigeria • Planting of energy, food and cash crops(jathropha cactus, rice, cow pea sorghum to create Major and Minor belts across 11 northern states

  6. PSISF FRAMWORK

  7. Expected Outcome of (PSISF) Framework on the National Economy

  8. Achievable Milestones of the (PSISF) National Sub Structure Model • REPOSITIONING NIGERIA AS A PRODUCTION BASED ECONOMY • CREATION OF NEW ECONOMIC CENTRES IN NIGERIA IN COLLOBRATION WITH LOCAL AND INTERNATIONAL FINANCE AND DEVELOPMENT AGENCIES • ERADICATION POVERTY AND PURSUE A MASS EMPLOYMENT PROGRAM THROUGH( PPP) ON MINERAL EXPLORATION AND EXPLOITATION PROGRAMS WITH STATES AND LOCAL GOVERNMENT COUNCILS • DIVERSIFICATION THE ECONOMY FROM OIL TO NON OIL PRODUCTS EVEN IN THE OIL PRODUCING AREAS

  9. THE MINERALS METALS AND STEEL SUB- SET

  10. Overview of the Minerals, Metals and Steel Sector • The threshold of industrialization is measured in terms of steel consumption on a global average of 130 kilograms (per capita). • Our Nations steel consumption average with its population of one hundred and forty million persons is 10 kilograms (per capita) which translates to approximately 1.5 million tons per annum • To be rated among the 20 industrialized nations Nigeria must improve its steel consumption from its present 1.5 million tons per annum to 18 million tons per annum • This could only be attainable if our local production capacity is improved through the integration of the Minerals, Metals and Steel into a definitive production, consumption and infrastructure development program.

  11. A typical Mining Value Chain

  12. A TYPICAL MINERAL DEVELOPMENT PROCESS

  13. A TYPICAL MINING PROJECT FUNDING CURVE

  14. Sources of Mineral Resources Dev Funding • Debt • Equity • Majors • Juniors • Venture Funds • Capital Market • Slush Funds • Multilateral/Donor Agencies • Mineral Development Funds (Government)

  15. THE NIGERIAN MINERAL RESOURCES SITUATION

  16. Nigeria’s Minerals/Metals Sector Commercial Operations Policy/Regulation Capacity Building Council of Nigerian Mining Engineers & Geologists (COMEG) Upstream Downstream MMSD (Ministry of Mines & Steel Development) Nigeria Mining Corporation (NMC) Ajaokuta Steel Co. Ltd. Nigerian Institute of Mining & Geosciences (NIMG) Dept. of Mines Inspectorate Mining Cadastre Office (MCO) National Iron-ore Mining Company (NIOMCO) Delta Steel Metallurgical Training Institution (MTI) Mines Environmental Compliance (MEC) Artisanal & Small Scale Mining Nigerian Coal Corporation (NCC) Inland Rolling Mills National Metallurgical Development Centre (NMDC) Artisanal & Small Scale Miners Aluminium Smelting Company of Nigeria Met Inspectorate & Raw Materials Steel & Non-Ferrous Metals Dept. Nigeria Geological Survey Agency (NGSA) National Steel Raw Materials Exploration Agency (NSRMEA)

  17. Overview of the Components Upstream Section(Commercial operations) • Scrapping of the NMC/NCC • Capacity of Niomco • The super concentrate is not required for ASCL but DSCL which is presently sold, the existing lines in NIOMCO can take the Iron ore to 64% fe which is what is required for steel production in ASCL .The Implication is that unless Itakpe can improve on its production or new mines are opened, Itakpe might not meet the requirements of ASCL on its present production capacity Downstream Section • Low utilisation of the Engineering work and lime facilities in ASCL • Privatisation of Inland rolling mills and Alscom Policy/ Regulation • Lack of Technical and financial resources for effective monitoring of mines inspectorate, artisanal mining and environmental compliance • Licensing issues with MCO Capacity Building • Lack of capacity of institutes like COMEG , NMDC ,MTI • Wrong placement of National Steel Raw Materials Exploration agency as a capacity Dev Agency

  18. SPECIFIC CHALLENGES OF THE SECTOR 3 PRONG

  19. Prong 1 Absence of definitive private sector driven business projects that tie the development mineral and natural resources to the development support infrastructure:- power rail, roads through a clearly defined value added chain model

  20. Prong 2 Absence of External Financial and Technical Partnerships and Joint Ventures due to: • Lack of defined exploration and project development programs (risk, exploration and venture funds windows in local finance institutions) • Lack of proper definition and understanding of the “front and “back ends” (exploration and exploitation) in the value chain (infrastructure development)

  21. Prong 3 ASCL/NIOMCO

  22. Explanatory notes • Lack of understanding of the diversified industrial portfolio of ASCL Ajaokuta project is actually the most diversified industrial development portfolio in the entire federal economic development program and is equipped with over 37 (thirty seven) industrial manufacturing and utilities sector

  23. Explanatory notes contd. • Inappropriate back-end programs for raw materials due to: • Lack of defined exploration and project development programs (risk, exploration and venture funds) occasioned by low understanding of the synergy between the (exploration and exploitation of key minerals:-Dolomite, Manganese, Lime stone and other minerals) in the value chain (minerals, metals and steel development) The result of this is that even in event of government commissioning all the lines in Niomco to produce foundry grade iron, the plant would still require equal if not larger amounts of other mineral products like limestone, Coal, Manganese, Dolomite to commence local production

  24. Explanatory notes ContdStructural defects of Ajaokuta Steel Plant and Itakpe Iron ore mining company • The Coke oven and the Iron Blast furnace in ASCL are complex and expensive and require continuous 24 hours operations for at least five(5) years. • ASCL is designed to process at least 1.3 million metric tonnes of Iron ore annually • Any shut down as a result of unsustainable production will result to the destruction of the two facilities with all is cost implications. • The Itakpe project is believed to have produced 3 million tonnes of iron ore with 200 thousand metric tonnes upgraded to foundry grade ore • It is not clear what % the 3 million tonnes was supplied to ASCL, but even then the quantity is still insignificant for the blast furnace requirement

  25. CONCLUSION

  26. The New Thinking: (PSISF) Mineral Development as the Sub Structure of the Nigerian Economy Increased Private sector Investment in Infrastructure etc in Mineral cluster areas due to Mining activities & Support industry Increased Spending on Social & Infrastructure projects Education, Health, roads etc Economic growth + Wealth/Employment creation + Internally Generated Revenue (IGR) Exploration & Exploitation work to develop Solid Mineral Clusters areas

  27. katsina Rolling Mill Integrated Mineral/Infrastructure Development Matrix Jos Rolling Mill Oshogbo Rolling Mill Ajaokuta Steel Plant (primary product) billet Coal production facility Delta steel plant Feasibility on Mine Development & Value added (Appropriate funding) Solid Mineral Exploration program for Iron-ore, Coal, Manganese, Dolomite, Limestone, etc

  28. Offtakers National Rail track Rehabilitation prog, Trans Sahara Gas & National gas pipeline Prog, Offtakers IndustrialParks IndustrialParks katsina Rolling Mill Jos Rolling Mill IPPs IndustrialParks Offtakers Delta steel plant Oshogbo Rolling Mill Ajaokuta Steel Plant (primary product) billet IndustrialParks IndustrialParks Offtakers Offtakers Mines: Iron ore, Coal, Zinc, Tin Offtakers Offtakers Offtakers

  29. The Proposed National Sub-Structure Matrix • Gausau Cluster comprising states of Sokoto, Kebbi and Zamfara States • Kano Cluster comprising of Kano, Kaduna and Katsina States • Guyuk Cluster comprising, Adamawa. Bauchi, Taraba. Gombe ,Yobe and Borno States • FCT Cluster FCT, Niger, , Kogi States • Lafia Cluster comprising of Benue, Plateau and Nassarawa States • Calabar Cluster comprising Akwaibom, Cross river, Rivers, Bayelsa and Delta states • Abakaliki Cluster comprising of Abia, Enugu, Ebonyi Imo and Anambra States • Ado-Ekiti Cluster comprising Lagos, Ondo, Edo, Ogun , Osun ,Ekiti, and Oyo states for the: • Establishment integrated solid minerals projects for essential raw materials for existing front end facilities • Establishment of major and minor belts for the planting of cash and food crops that would drive a food chain for human and animal consumption • Establishment of Animal husbandry and bio-fuel belt • Establishment of Gas gathering and distribution facilities • Establishment of cash crop belts of cocoa, palm ,forestry and integrated aquaculture projects • Establishment of minor belts for food and cash crops • The Super Structure • These projects would be used to support existing infrastructure in the Power, Transport, Agriculture and Solid Minerals Sub Sectors of the Nigerian Economy and also promote the use of alternative power generation, especially the existing small hydro power potentials and the integration to the existing 12,000 km rail network in the country.

  30. A PSISF Driven Economy 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 Kaura Namoda Nguru Nguru Offtakers IndustrialParks Maiduguri Maiduguri kano katsina Rolling Mill Offtakers IndustrialParks Dadin Kowa Kaduna Kaduna Jos Rolling Mill Shiroro Shiroro Kainji Offtakers Minna Minna Ajaokuta Steel Plant (primary product) billet Jebba Jos Jos IndustrialParks Keffi Abuja Abuja Trans-Sahara pipeline Lafia Lafia Oshogbo Rolling Mill (Geregu) Obajana IndustrialParks Mineral Deposits Iron Ore Coal Bentonite Gypsum Barite Gold Phosphate Limestone Marble Diamonds Feldspar Talc Lead/Zinc Columbite Tantalite Chromium Salt Offtakers Mambila IndustrialParks Delta steel plant Enugu Enugu Offtakers Oben Gas Field Existing Gas Pipeline Proposed Gas Pipeline Existing Hydro Power Station Proposed Hydro On-going Gas Power Station Potential Mining Site Existing Gas Power Station

  31. Next Steps The Hon Minister is invited to approve access for the utilization of existing data in the Ministry and its Departments and Agencies for the CBN supported Sub Structure model. The Hon Minister is further invited to consider a collaboration between the Ministry and Anthill Concepts Ltd, to develop an integrated business model that would be used for the development of the Minerals, Metals and Steel on a (PSISF) basis in Nigeria Thank you for the Kind Attention

  32. AGRICULTURE SUB-SET

  33. Nigerian Microeconomic Competitiveness Business Environment Strengths Weaknesses • Home market • Favourable location • Abundant resources and agricultural potential • Electricity • Land transport • Air transport • Land use • Workforce skills • ICT capacity • Business regulation/red tape • Tariff and non-tariff barriers • Monopoly/lack of open competition • IP protection

  34. Nigerian Microeconomic CompetitivenessSelected Rankings from the Global Competitiveness Report Competitive Disadvantages (rank versus 134 countries) Patents per million population 134 Quality of electricity supply 133 Ease of access to loans 124 Burden of customs procedures 122 Regulatory quality 122 Quality of railroad infrastructure 121 Personal computers per 100 population 117 Quality of port infrastructure 115 Domestic credit to private sector 114 Mobile telephone subscribers per 100 population 111 Internet access in schools 105 Quality of roads 104 Tertiary enrollment 103 Low tariff rate 100 Internet users per 100 population 99 Intellectual property protection 96 Pay and productivity 93 Ease of starting a new business 93

  35. Executive Summary Agri-business represents not just a major component of the economy but a way of life for millions of Nigerians that must be reckoned with. Agribusiness in Nigeria however is plagued by myraid infrastructure challenges. Fixing the infrastructure needs for development of agribusiness in Nigeria will require a holistic approach that will involve governments at all levels, regulatory bodies as well as other stakeholders. This will require enactment of enabling laws, overhauling of relevant agencies as well as deployment of mechanisms that will ensure substantial infusion of fixed investment and working capital towards sustainable infrastructure development.

  36. Competitiveness and Cluster DevelopmentTourism Cluster in Cairns, Australia Public Relations & Market Research Services Travel agents Tour operators Local Retail, Health care and other services Food Suppliers Local Transportation Restaurants Attractions and Activities e.g. theme parks, casinos, sports Property Services Souvenirs, Duty Free Maintenance Services Hotels Airlines, Cruise Ships Banks, Foreign Exchange Government agencies e.g. Australian Tourism Commission, Great Barrier Reef Authority Educational Institutions e.g. James Cook University, Cairns College of TAFE Industry Groups e.g. Queensland Tourism Industry Council

  37. Cluster in Developing countryKenya’s Cut Flower Cluster Government Agencies, NGOs & Industry Associations Horticultural Crops Development Authority (HCDA) Government Export Policies targeting Horticulture Government Policy for Revitalizing Agriculture; National Export Strategy; Export Promotion Council Non-Governmental Organizations The Rural Enterprise Agri-Business Promotion Project (USAID, CARE, IFAD) Horticultural Produce Handling Facilities Project (JBIC) Post-Harvest Cooling Technology Plantstock Trade & Industry Associations Kenya Flower Council (KFC) Fresh Produce Exporters Association of Kenya (FPEAK) Regional Growers Associations e.g., North & South Kinangop; Lake Naivasha, etc Grading/Packaging Sheds Greenhouse; Shading Structure Packaging & Labeling Materials Irrigation Technology Flower Farming Post-Harvest Handling; Transport to Market Refrigerated Trucks Pre-Cooling Technology Freight Forwarders Fertilizers, pesticides, herbicides Clearing and Forwarding Agents Education, Research & Quality Standards Organization Agricultural Cluster Research Institutions: Kenya Agricultural Research Institute (KARI) International Centre for Insect Physiology and Ecology (ICIPE) Air Carriers (Commercial/Charters) Horticultural Cluster (Fruits & Vegetables) Tourism Cluster Public universities with post graduate degrees in horticulture: University of Nairobi; Jomo Kenyatta University of Agriculture & Technology Quality & Standards: EUREGAP Standard (UK & Dutch Supermarkets) Kenya Plant Health Inspectorate Services (KEPHIS)

  38. Nigeria’s Cluster Export Portfolio1997 to 2007 Change in Nigeria’s Overall Growth in world Export Share: -0.162% Business Services Leather and Related Products Oil and Gas (-0.22%, 2.73%), $50.5 billion Nigeria’s Average World Export Share: 0.353% Publishing and Printing Marine Equipment Agricultural Products Transportation and Logistics Tobacco Fishing and Fishing Products Footwear Plastics Building Fixtures and Equipment Textiles Forest Products Metal Mining and Manufacturing Processed Foods Chemical Products

  39. Nigeria’s Cluster Export Portfolio1997 to 2007 Change in Nigeria’s Overall Growth in world Export Share: -0.162% Business Services ().57%) Publishing and Printing (0.37%) Leather and Related Products (0.51%) Marine Equipment Transportation and Logistics Agricultural Products Tobacco Footwear Fishing and Fishing Products Plastics Building Fixtures and Equipment Textiles Forest Products biopharmaceuticals Processed Foods Metal Mining and Manufacturing Heavy Machinery Chemical Products Production Technology Financial Services Automotive

  40. OVERVIEW AGRIBUSINESS IN NIGERIA Farming input supply companies Un-integrated and Delinked Cut across formal and informal sector of the economy Producing farm firms Food processing agribusinesses firms Food marketing and distribution agribusiness organizations

  41. MDG 8 PRONG GOAI IN NIGERIA • GOAL 1Eradicate Extreme Poverty and Hunger • GOAL 2Achieve Universal Primary Education • GOAL 3Promote Gender Equality and Empower Women • GOAL 4Reduce Child Mortality • GOAL 5Improve Maternal Health • GOAL 6Combat HIV-AIDS, Malaria and Other Diseases • GOAL 7Ensure Environmental Sustainability • GOAL 8Develop a Global Partnership for Development

  42. The agriculture sector is central to Nigeria’s economy, accounting for 40 percent of GDP and providing 60 percent of employment. Agriculture is a major source of employment growth: Between 2001-2007 it accounted for 51 percent of job creation in Nigeria. • Since the 1960s, Nigeria has lost a dominant position in exports of key crops such as cocoa, groundnuts, ground nut oil and palm oil. In the 1960s, Nigeria had over 60% of global palm oil exports, 30% of global ground nut exports, 20-30% of global ground nut oil exports, and 15 % of global cocoa exports. By the 2000s, Nigeria global share of exports of each of these crops was 5% or less. • Today, Nigeria is a net importer of agricultural produce, with imports of some major food products like wheat (NGN 635.5 billion – USD 4.1bn), fish (NGN 96.9 billion – USD 625 million), rice (NGN 356.5 billion – USD 2.3 billion) and sugar (NGN 217 billion – USD 1.4 billion) totalling NGN 98.08 trillion (USD 632.8 billion) of food import bill for the period 2007 t0 2010. • Nigeria’s agriculture sector has enormous potential – with an opportunity to grow output by 160%, from NGN 15.345 trillion (USD 99 billion) today to NGN 39.68 trillion (USD 256 billion) by 2030. This growth potential comes from potential to increase yields to 80-100% of benchmark countries; increase acreage by 14 m ha new agricultural land, approximately 38% of Nigeria’s unused arable land of 36.9m ha; and shift 20% of production to higher value crops’. • Nigeria faces a large and growing global agricultural market – Rising commodity prices, growing demand for food, and opportunities in bio-fuel all present significant opportunities for Nigeria. For example, global cereal demand will grow by between 31% and 150% by 2050 depending on the region, and global commodity prices are in their second major spike in three years. Agriculture can become the main driver for more equitable income growth, compared to oil and gas sector. • Challenges of the Agro-Allied Sub-Sector • The agro-allied sector was a key contributor to the pre and post colonial administrations in Nigeria, accounting for 40 percent of GDP and providing 60 percent of informal employment. • Out of 2.9 million hectares of arable land, only about 974,900 hectares is currently irrigated in Nigeria • Due to the nature of the post colonial agriculture development models and programs, Nigeria has lost a lot of grounds in the production and exports of key crops such as cocoa, groundnuts, ground nut oil and palm oil. • Hitherto, In the 1960s, Nigeria had over 60% of global palm oil exports, 30% of global ground nut exports, 20-30% of global ground nut oil exports, and 15 % of global cocoa exports and by the 2000s, Nigeria global share of exports of each of these crops was 5% or less. • The loss of production capability has turned Nigeria into a net importer of agricultural produce, with imports of some major food products like wheat (NGN 635.5 billion – USD 4.1bn), fish (NGN 96.9 billion – USD 625 million), rice (NGN 356.5 billion – USD 2.3 billion) and sugar (NGN 217 billion – USD 1.4 billion) totalling NGN 98.08 trillion (USD 632.8 billion) of food import bill for the period 2007 t0 2010. • Consequently Nigeria faces a large and growing global agricultural market – Rising commodity prices, growing demand for food, and opportunities in bio-fuel all present significant opportunities for Nigeria. For example, global cereal demand will grow by between 31% and 150% by 2050 depending on the region, and global commodity prices are in their second major spike in three years. Agriculture can become the main driver for more equitable income growth, compared to oil and gas sector. • This growth potential can be driven by increasing the acreage by 14 m ha of new agricultural land, which is approximately 38% of Nigeria’s unused arable land of 36.9m ha; and this will in turn shift 20% of production to higher value crops’. Overview of Agriculture in Nigeria

  43. challenges of agro-allied sector to be Correctedby the Sub Structure Model

  44. Benefits of Sub Structure development Model to the Public/ Private Sectors • Creation of economic activities (including service industry) and organized settlements within the country’s rural and semi urban centres so as to create employment opportunities and stem population explosion in the metropolis. • Provide alternative (non-oil) source of internally generated foreign exchange that can be used to fund critical infrastructure projects. • Provide an incentive for private sector investment in supplementary infrastructure projects e.g. roads, housing, schools, power plants, water etc around the mining clusters to service organized settlements that will evolve from the mining clusters. e.g. Jos city evolved and developed as a result of tin mining activities.

  45. Sustainable Benefits of the Program • JOB SECURITY • SUSTAINABLE HOUSING DEVELOPMENT • BOTTOM UP SOCIAL SERVICES SCHEME • NATIONAL INTEGRATION • MASS EMPLOYMENT • SUSTAINABLE INFRASTRUCTURE DEVELOPMENT

  46. THANK YOU FOR THE KIND ATTENTION QUESTIONS

More Related