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Tag: Segun Ajayi-Kadri

  • Harnessing the Power of the Carbon Market: Private Sector Leaders Chart the Path for Sustainable Development in Africa

    Harnessing the Power of the Carbon Market: Private Sector Leaders Chart the Path for Sustainable Development in Africa

    The Private Sector ESG Forum, a leading platform designed to champion sustainable business practices across Africa, concluded its 2024 edition with a resounding call to action for the private sector to leverage the carbon market as a catalyst for investment to propel a greener, more inclusive future for Africa.

    The 2024 ESG Forum, with the theme “The Carbon Market: Driving Investment for a Sustainable Africa,” was held on Wednesday, November 6th, 2024, at the Civic Centre, Lagos. This year’s forum brought together prominent business leaders, policymakers, and sustainability experts to explore how the carbon market can unlock transformative opportunities for the continent.

    Yarub Al-Bahrani, Managing Director of BAT West & Central Africa, set the tone for the day’s discussions in his welcome address, emphasizing the private sector’s crucial role in addressing the climate crisis and driving sustainable development.

    “Africa stands at the crossroads of unprecedented opportunity and pressing environmental challenges. As the world transitions to a low-carbon economy, the carbon market offers Africa a unique chance to lead in climate action while attracting much-needed investment for sustainable growth. By leveraging the carbon market, we can generate economic opportunities that uplift communities, advance clean technologies, and build more sustainable industries,” said Al-Bahrani.

    Dr. Oreoluwa Finnih, Special Adviser to the Lagos State Government on Sustainable Development Goals (SDG) who represented the Lagos State Governor, His Excellency, Babajide Sanwo-Olu, shared Lagos state’s commitment to sustainability and good governance practices.

    “Lagos state recognizes the importance of ESG principles in driving a green and resilient economy. The state has taken several steps to advance ESG priorities, including pioneering waste-to-energy projects that convert solid and liquid waste into renewable energy sources, and establishing the Lagos carbon registry,” said Dr. Finnih.

    She also highlighted the state’s commitment to leading by example in transparency through its public-private partnerships in areas like infrastructure, healthcare, and waste management, which aim to reduce bureaucratic delays and improve citizen access to services.

    During his keynote address, Paul Muthaura, CEO of Africa Carbon Market Initiative, expressed the need for collaborative actions to drive sustainable development. He said “The carbon market stands as an opportunity for Africa businesses. It is a tool that enables us to harness our rich natural resources while driving investments that empower communities and protect our environment. Together, we can transform the challenges of climate change into pathways for economic growth, ensuring that Africa leads the world in creating a sustainable future”. 

    The forum featured a series of insightful panel discussions that delved into the multifaceted impact of climate change on African businesses, the financial challenges and solutions for decarbonization projects, and the intricacies of the carbon market and carbon credits.

    The speakers shared valuable insights on how companies can navigate the risks and seize the opportunities presented by climate change, as well as the innovative financing mechanisms and business models that can make decarbonization more viable and attractive to investors.

    Key speakers at the event included: Dr. Innocent Bariate Barikor, Director General/CEO of National Environmental Standards and Regulations Enforcement Agency (NESERA); Segun Ajayi-Kabir, Director General, Manufacturers Association of Nigeria (MAN); Mr. Paul Muthaura CEO, Africa Carbon Markets Initiative, Kenya; Titilayo Oshodi, Special Adviser to the Lagos State Government on Climate Change; Ademola Ogunbanjo, President/CEO, Oando Clean Energy; Ejiro Gray, Director, Governance & Sustainability, Sahara Group; Jocelyne Landry Tsonang, Project Manager Africa, Green Bond Corporation, Cameroon; Afolabi Akinrogunde, Snr. Deal Lead/Business Opportunity Manager, Shell Energy Nigeria; Habiba Suleiman, Head of Strategic Partnerships, TGI Group, amongst many others.

    Part of the highlight of the event was the announcement of the Young Professional Mentorship Programme, aimed at gathering young sustainability enthusiasts to expand awareness and build capacity on ESG.

    “This programme is a transformative step towards empowering the next generation of young sustainability leaders by fostering a community of passionate young professionals, we are not only expanding awareness around ESG but also building the capacity needed to drive meaningful change across Africa. Collaboratively, we can cultivate innovative solutions that will shape a sustainable future for our continent,” said Odiri Erewa-Meggison, Director, External Affairs BAT WCA & Chairman, ESG Forum Technical Committee. 

    The forum also emphasized the responsibility of the private sector, policymakers, and the broader stakeholder community to integrate sustainable practices into their operations and strategies. At the close of the event, participants collectively pledged to be more responsible to ESG practices. This aimed at uniting stakeholders in the race for accountability in driving sustainable progress and addressing pressing environmental and social challenges. 

    For inquiries for the ESG Forum and registration for the Young Professional Mentorship Programme, please visit www.esgforumafrica.com

  • MAN Enumerates Impacts of PMS Price Hike on Economy

    MAN Enumerates Impacts of PMS Price Hike on Economy

    The Manufacturers Association of Nigeria (MAN) has enumerated the impact of the increase in the price of Premium Motor Spirit (PMS) on the economy.

    This was contained in a statement signed by the Director-General of the Association, Segun Ajayi-Kadir, mni. According to the statement, “The recent increase in price of petrol from about ₦568 per litre to ₦855 per litre, being implemented across NNPC filling stations, has expectedly attracted a lot of comments across the nation.” From what I can glean, the reasons for the increase are not far-fetched. Globally, there is an increase in crude oil prices. Our refineries are not producing and we import fuel. The increase in cost of crude oil will have direct impact on the cost of importing fuel into Nigeria and expectedly, the NNPC would at some point, adjust domestic prices. Also, right from the time fuel subsidy was either reduced or removed, it became inevitable that the price may rise. You will also note the sharp decline in the value of the Naira and the impact it is bound to have on the importation of fuel.

    So, in terms of what the impact might be and judging from what we have witnessed in the past, the cost of transportation may increase, and so would the prices of goods and services. As the cost of petrol rises, consumers will spend more on transportation and energy, leaving them with less disposable income. This decrease in purchasing power may lead to reduced demand for non-essential goods and services, affecting businesses across various sectors. These are pointers to the high possibility of a rise in inflation figures, impacting household budgets.

    One is naturally worried about the impact on the already lackluster performance of the manufacturing sector. In particular, there is no doubt that it will add to production input and logistics costs. These will lead to higher prices and in the face of dwindling disposable income of the average Nigerian.

    A further deep in consumer demand will see manufacturers’ unplanned inventory rising and reduction in capacity utilization.

    Manufacturing performance would be negatively impacted. Businesses may need to adjust their pricing strategies, which could lead to reduced profit margins if consumer demand weakens. Small and medium-sized enterprises (SMEs), which often operate on thin margins, could be particularly hard-hit.

    The increased costs could force some to scale down operations or even shut down if they are unable to pass on the additional costs to consumers.

  • MAN expresses concern over skewed implementation of National Mass Metering Programme (NMMP) Phase II

    MAN expresses concern over skewed implementation of National Mass Metering Programme (NMMP) Phase II

    … local meter manufacturers and assemblers displaced from World Bank funded project

    The Manufacturers Association of Nigeria (MAN) has expressed concern over the impending displacement of local meter manufacturers and assemblers in downstream of the power sector in the process of the government’s implementation of the NMMP Phase II World Bank-funded supply of 1.2 million smart energy meters.

    According to the statement signed by the Director-General of MAN, Segun Ajayi-Kadri, The advertised financial requirements and the technical specifications by the Transmission Company of Nigeria (TCN) appears to be skewed against local manufacturers as they are outrageously stringent and negate the CBN guidelines for the implementation of National Mass Metering Programme (NMMP). This is a federal government intervention in the power sector to accelerate energy meter supply in the country to bridge the metering gap and ought to be in sync with our overall national economic development objectives.

    This portends grave danger for the power sector as we may be witnessing a repeat of the ugly scenario in 2012 when local manufacturers were sidelined in the meter supply and the nation was greeted with supply of substandard meters supplied by the foreign companies that were awarded the contract that were later removed from the network. The position of the TCN that installation will provide employment opportunities to Nigerians will completely pale into insignificance when compared with a ratio of 1 to 10 jobs that will be created if local manufacturers are included in the scheme.

    It should be recalled that, in keeping with the Federal Government’s backward integration policy and the advent of the NMMP intervention, manufacturers have made huge investments in expansion of manufacturing capacities, trained and promoted highly skilled workforce to meet the demands of the power sector as envisaged in the NESI.

    The seeming intentional denial of the local manufacturers does not take into cognizance their sterling performance of the nascent local manufacturing, vis:

    i) Deployment and installation of a total number of 611,231 energy meters across the country between January 2019 till 31st January, 2021. This is corroborated by the report of the Regulatory Agency, the Nigeria Electricity Regulatory Commission (NERC) under the Meter Assets Provider (MAP) initiative of the federal government.

    ii) The deployment and installation of 1million energy meters across the country under the phase zero of the National Mass Metering Programme (NMMP). This is under the Federal Government intervention aimed at increasing the metering rate to eliminate the inglorious and arbitrary estimated billing and strengthening the local meter value chain, as well as creating jobs. Ofcourse this has also helped in reducing collection losses and increasing financial flows to achieve 100% market remittance obligations of the Discos and improving network monitoring capability and availability of data for market administration and investment decision making.

    It should recall that our members have been denied the opportunity to fully execute the contract for the supply and installation of 4m energy meters under the Phase 1 of the NMMP scheme. This was due to the unrealistic terms that arbitrarily fixed the contract prices extremely and far below the approved regulatory prices of energy meters in the country. Additionally, the contractual term of payment after the supply and installation of the meters have not been adhered to, thereby jeopardizing the financial capabilities of our members participating in the scheme.

    MAN opines that the subsisting Executive order 003 on the patronage of made-in-Nigeria products and the avowed policy of the government to give priority and first consideration to local businesses should have made the government to interrogate the world bank documents and actively consulted/engaged Nigerian stakeholders in the sector with a view mainstreaming their inputs. This is clearly the cardinal aspiration of the NMMP scheme, which is to strengthen the local meter value chain by increasing local meter manufacturing, assembly and deployment capacity and to support Nigeria’s economic recovery by creating jobs in the local meter value chain.

    As a nation that aspires to make progress and improve the well-being of its people, it is unconscionable that we continuously make the same mistakes. The overbearing government control over energy meter procurement and pricing has continued to limit meter availability and almost treacherously hindered the factualization of the forces of demand and supply in determining the prices of meters. It has stifled the emergence of healthy competition in the meter manufacturing and pricing ecosystem, which should have created more job, upscaled technology, innovation and skills, and an expansive value chain across the country.

    The Association counsel that the excellent constitutional amendment that enlisted power generation and transmission in the concurrent list should be complemented with the liberalization of the distribution end of the value chain. The energy meter procurement and pricing should be liberalized. There is no doubt that Nigerians are in dire need of and are desirous of procuring meters, they have only been limited by the unwarranted and stringent processes of applying for energy meters by the DisCos, as well as the indiscretion of some of their operatives.  We are convinced that the liberalization of the distribution end of the value chain will eradicate these bottlenecks and give a fillip to the efforts of government to bridge the metering gap and ensure just electricity billing regime.

  • Nigeria needs to develop an implementable, non-contradictory and well-synthesized Monetary and Fiscal Policy

    Nigeria needs to develop an implementable, non-contradictory and well-synthesized Monetary and Fiscal Policy

    …increase in MPR will lead to imminent recession in the manufacturing sector

    The Manufacturers Association of Nigeria (MAN) has advised the Federal Government to develop an implementable, non-contradictory and well-synthesized Monetary and Fiscal Policy. This was mentioned in a statement released after the Monetary Policy Committee of the Central Bank of Nigeria (CBN) has raised in quick succession.

    The Monetary Policy Rate (MPR) to 18.5 percent in May 2023 from 18 percent that was fixed at the 290th meeting of the committee held in March, 2023. The rate was raised by 50 basis points, while the Cash Reserve Ratio (CRR) and the Liquidity Ratio (LR) were maintained at 32.5% and 30% respectively.

    In his justification for this, Mr. Godwin Emefiele, the Governor of Central Bank of Nigeria, the decision is to curtail the rising inflation in Nigeria, the rate which stood at 22.22 per cent as released by National Bureau of Statistics (NBS) in April 2023. This MPR increase is the 7th in a trend and the inflation rate continues to rise despite the increases. This is a clear indication that the policy tightening is not effective in curbing the inflationary pressures and more needed to be done.

    The statement by the Manufacturers Association of Nigeria signed by the Director General, Segun Ajayi-Kadri, mni revealed that it was evident that the continuous and consistent increase in MPR is not yielding the desired growth in the economy. The Nigerian economy remains fragile and bedeviled with numerous challenges that inhibit growth. Therefore, the monetary authority needs to pay closer attention to rethink the policy mix, bearing in mind the parlous state of the economy, especially the effect of a high MPR on the manufacturing sector and the economy.

    The increase will compound the imminent recession in the manufacturing sector and negatively impact its operations in so many ways, including increase in the cost of borrowing that will further discourage investments in the sector. High cost of production which will lead to higher commodity prices and inventory of unsold manufactured products. The decline in capacity utilization owing to high interest rate and reduction in sales and reduction in the output of the sector which will further reduce the national productivity and per capita income.

    Others are reduction in manufacturing employment, thereby fueling insecurity and social vices. Decline in Government revenue as a result of low productivity of the manufacturing sector and the resulting low taxes. Reduction in inflow of investment owing to increase in cost of borrowing for manufacturing investment. High product prices owing to rising factor costs, which will in turn render the sector less uncompetitive.

    According to the statement by MAN, the increase in MPR from 18% to 18.5% will certainly lead to an increase in lending rates and worsen the uncompetitiveness of the manufacturing sector. The Association has been clamoring for single-digit lending rates to allow manufacturers access needed funds to boost the performance of the sector. This increase, like the previous ones, is evidence that the CBN is either unperturbed about the plight of the productive sector or is unable to fathom out a more creative policy mix that would reflate the sector.

    We are persuaded that monetary authority is oblivious of the fact that the failure of its  tightening policy to address the inflationary pressure is because the hike in inflation is largely caused by a combination of familiar challenges, including low output which is attributed to instability of macroeconomic variables, inconsistent and lackluster fiscal policy regime, incoherent industrial policies, challenging and expensive operating environment, exploitative regulation, external shocks and poor exchange rate management.

     Therefore, there is a need to address the identified root causes of inflation and refrain from intensifying policy choices that hamper the performance of the real sectors of the economy.

     The interrelationship among macroeconomic variables is essential in policy formulation, as the movements of interest rate, inflation rate and exchange rate have direct impact on investment, employment and output of any economy.

     According to the conventional monetary framework that was adopted by the CBN, increase in MPR should increase interest rate and by extension attract financial investment. However, it will also increase the cost of borrowing, crowd out more investments in the real sector and lower the output of the manufacturing sector.

     Therefore, it is necessary for government to think outside the conventional monetary policy framework and take pragmatic steps to quell the inflationary pressure and reposition the economy.

    To avert these undesirable trend, MAN recommends that the cost of lending from the Commercial Banks is expected to increase with the increase in MPR, it is important that priority attention should be given to improving the size of the available special funding windows and making them accessible to the industries at liberal conditionality.

    Also, the Federal Ministry of Finance, Budget and National Planning and the Central Bank of Nigeria should collaborate to develop an implementable, non-contradictory and well-synthesized monetary and fiscal policy that support domestic manufacturing and the productive sector in general. By doing this, the supply of goods and local production will increase relative to current demand thereby improving aggregate output.

    Similarly, immediate and concrete action should be taken to address the manufacturers’ forex needs in order to support and sustain production. There is no doubt that prioritizing allocation of forex to the manufacturing sector to procure raw materials, machines and spare parts that are not available locally is the way to go.

    The implement strategies to encourage local raw material development and procurement, enhance infrastructure development, obviate prohibitive electricity tariffs, and increase productivity in key industries like manufacturing. Efforts should be made to tackle smuggling and insecurity by stepping up capacity building and providing sufficient security equipment and technology for monitoring and intelligence gathering.