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Trade and Industry

ICSAN advises on business impact analysis during, after COVID-19

By Anthony Areh

The Institute of Chartered Secretaries and Administrators of Nigerian (ICSAN) has made recommendations to help businesses continue to prosper during and after COVID-19 disruptions.

ICSAN gave the recommendations at a webinar themed: “Business Continuity Planning and Risk Management – during and after COVID-19”.

Speaking at the webinar, Francis Olawale, ICSAN National Treasurer, advised business entities to conduct a business impact analysis (BIA) and choose the business continuity team after identifying objectives of the plan and set goals.

This, he explained, would ensure that a business war chest aimed at preventing dangers and uncertainties with the ability to withstand them in case of eventualities without breakdown or collapse was in place.

“Also, key business areas and its critical functions, pain points and dependencies must be identified.

“Businesses must also create steps to maintain operations, develop a testing and training curriculum and be able to determine ongoing programme maintenance and quality assurance,” he said.

With regards to the ongoing pandemic, Olawale pushed for business adaptation by identifying functions and related resources that were time sensitive.

In working remotely, the ICSAN treasurer urged business entities to beware of cyber-attacks, and create new accounts and access should the need arose.

“Cyber criminals are taking advantage of the fears of the Coronavirus and sending ‘phishing’ emails that try and trick users into clicking on a poisonous link.

“Once clicked, the user is sent to a dodgy website which can download malware onto your computer, or steal passwords.

“If the software to be used at home, it’s different from the one used in the office, you should produce written guides for these features, and test that the software works as described,” he said.

European automakers eye North Africa

By Europe Autonews

Attracted by low cost of production, European automakers are looking to North Africa, a vast region where relatively stable countries sit alongside those grappling with political instability.

Renault, which builds about 400,000 cars annually at two factories in Morocco, has long been the production leader in North Africa. In recent years PSA Group and Volkswagen Group have started production in the region.

Meanwhile, Daimler last year signed a memorandum of understanding to restart production of Mercedes-Benz cars in Egypt after a four-year halt.

On the sales side, analysts expect the region to substantially outperform the global market in the next few years, although volumes remain small in North Africa’s main countries of Algeria, Egypt, Morocco and Tunisia.

PSA in particular has focused an important part of its production in North Africa. A small factory in Tunisia assembles pickups for the African market, and the automaker has plans for a factory in Algeria with a capacity of 50,000 vehicles. It is in Morocco, however, where PSA is expanding most rapidly, centered on its new 557 million-euro ($617 million) factory in Kenitra.

In September, PSA started to build the Peugeot 208, the automaker’s best-seller, in Kenitra, largely for export to Europe. In December, it signed an agreement to conduct some of its R&D in Morocco, and Segula Technologies, an engineering company that works closely with PSA, is opening an automotive “center of excellence” in Agadir, which is about 260km southwest of Marrakesh.

PSA CEO Carlos Tavares announced in February plans to double annual capacity to 200,000 vehicles at Kenitra by the middle of this year, three years ahead of schedule.

By the end of 2022, PSA and Renault could have a total production capacity of about 700,000 vehicles in Morocco. If that happens Morocco would move ahead of Poland.

More

https://europe.autonews.com/automakers/renault-psa-daimler-tap-n-africa-low-cost-exports-rising-local-demand

Africa’s energy transition must be African at heart

By Verner Ayukegba

Africa is at an energy cross-road. On one hand, the most talented, better educated, most entrepreneurial and competitive generation the continent has ever had is rising and taking on leadership positions that will propel African companies to become more competitive.

After many turbulent decades, most corners of the continent have found the necessary political and economic stability to strategize for a better future making use of their natural resources and wealth. Nowhere else on planet Earth are economies and populations expected to grow faster than in the mother-continent.

After such a long time dealing with the problems of the past, Africans can look to the future with the promise of a better life. After all, when it comes to natural resources such oil, gas, coal, diamonds, rare earths, woods, or agricultural potential and legacy-free technological development, there is no place like Africa. Over the last decade, most of the world’s biggest oil and gas discoveries took place on the African continent, and rapidly developing indigenous companies are ensuring these resources serve Africans and African economies more than they ever did before, resources that will power industries, light homes and create wealth.

Our time to rise is finally here

I have had the chance to witness this with my own eyes. From Equatorial Guinea to South Africa, from Angola to Mozambique and from Kenya to Senegal, the energy industry, the one I know best and the one closest to my heart, is revolutionizing life. Political leaders are willing to learn from the mistakes of the past to improve resource management, contract negotiations and environmental protection policies.

Most of all, they have developed local content policies that potentiate the participation of Africans in these industries. Oil and gas training programmes and university degrees that cater to the industry like engineering are now more common than ever. These programs are educating and giving opportunities for numerous Africans to find work in the industry and further, to start their own companies within the industry’s supply chain. While the drive to strengthen the integration of the energy sector and other extractive industries with the rest of the economic system is far from complete, it has certainly been fundamental in developing Nigeria’s indigenous upstream sector or in building a truly native gas industry in Equatorial Guinea. In Nigeria for example, this critical mass of local talent has been instrumental in the establishment of regional energy giants like Seplat Petroleum, Sahara Energy, Atlas Petroleum International Limited and Shoreline Natural Resources, whose influence is felt more and more beyond Nigeria’s boarders.

Local content clauses in contracts are the way African leaders assure that the exploitation of the local natural resources has a trickle-down effect on the local economy, through job-creation and increasing local participation in the value chain the industry brings with it. Furthermore, most recent localization strategies for the oil and gas sector have been successful in developing truly native associated industries, particularly within the natural gas supply chain. As the Africa Energy Chamber has advocated since its establishment, we are finally seeing petrochemical plants, fertilizer plants and gas-fired power plants popping up across the continent. An African natural gas economy is growing where before the plague of flaring stood unmatched.

Intra-African trade in both natural gas and Liquefied Natural Gas (LNG) is also likely to rise significantly, on the back of rapid urbanization and development across the continent which is set to increase energy consumption on the continent by more than 50% before 2040, This will speed up wealth creation and capacity building across borders.

Following the oil price crash of 2014, many countries across Africa have sought to reposition themselves to attract investment into their energy sectors through the introduction of varying incentives. These incentives ranged from granting tax breaks to potential investors to reducing bureaucracy affecting the sector. On the other hand, the recent global climate change discourse which has also intentionally sought to demonize and simply hinder investments into Africa’s oil and gas sector, poses a new challenge to the growth of the sector in Africa.

Worryingly, these two issues are taking attention away from the need to ensure that the African energy industry benefits Africans at large and fulfils its transformative potential to raise the continent out of poverty.

The African energy transition will not be made in the West

The issue of climate change has come to dominate the global debate over the energy sector. An energy transition is necessary to tackle the effects of CO2 emissions on a planetary scale. While Africa has contributed only a miniscule part of those emissions, it stands to suffer the most from the effects of this change, and must as well prepare for a progressive shift in its energy structure. In many ways, the channelling of natural gas for power generation and the upgrading of oil and gas infrastructure and equipment to improve efficiencies and reduce the industry’s carbon footprint is already going a long way to achieve that. New renewable energy projects from Kenya to South Africa will also help balance out the continent’s energy matrix as it expands its electrification rates to reach every African in every corner of the continent.

Many international and foreign institutions have already started to share their expertise and support with African governments and many foreign investors have started to develop their own projects in the mother-continent. Wind farms, solar parks, geothermal drilling, hydropower plants, etc, are taking advantage of each region’s available resources. Here too, these renewable resources must be used for the benefit of Africans, and they must be developed with the participation of Africans and in a manner that is sustainable economically and to a scale that is capable to supporting the growth of industry that provides for good paying jobs.

It is fundamental that these new technologies and sources of energy suit the communities which they are meant to serve. Climate concerns cannot side line discussions over local content and localization strategies. They must go hand in hand, be one and the same, or else we may again find ourselves dependent on foreign knowledge to provide for our energy needs. Such dependence is unlikely to lead to the mass scale of development with the potential to lift large swaths of the population out of poverty.

Education programs and employment clauses are a fundamental step of the energy transition and not a secondary aspect of it. Market-driven local content frameworks need to be designed for capacity building, employment generation and overall enforcing a value-adding multiplying effect in our economies.

This debate is now more important than ever, as Africa opens up to new industries and to greater trade integration. As more and more African nations gain the expertise to explore their natural resources for the betterment of their economies and their people, we need to see further integration and cooperation between them, so that the continent can take advantage of synergies that different regions and industries can offer.

Already, we see examples of gas-poor countries like South Africa investing in natural gas and LNG projects in gas rich Mozambique with the aim of reducing their growing energy deficit. As demand rises, exploration will accelerate and so will the use of the vast gas resources, including those that continue to be wasted through flaring. The African Continental Free Trade Zone is an ideal platform to promote the development of an intra-African natural gas trade that will promote widespread economic growth and access to power. Again, it is fundamental that these developments are pegged to well implemented and designed local content policies, so that Africans can truly benefit from the exploitation of their continent’s resources, and by so doing, ensure that Africa’s energy transition will be driven and made sustainable by those that will transition with it.

Verner Ayukegba is the Senior Vice President with the African Energy Chamber and Director of Operations at DMWA Resources, a pan-African energy marketing & investment firm.

Expert tasks Nigeria on spending as price of oil dips

By Anthony Areh

Prof. Wumi Iledare, former President Nigerian Association of Energy Economics (NAEE), has advised the Federal Government to spend prudently to avoid breakdown of the nation’s economy as global oil price continues to crash.

Iledare said in Abuja on Tuesday that the economy was already in an abysmal situation.

West Texas Intermediate (WTI), the North American Benchmark, on Monday fell to the negatives in trading.

Also, Western Canadian Select (WCS), was below zero at one point but has recovered to around eight dollars a barrel.

The Nigeria Bonny light also fell to 11 dollars in the market on Monday.

“Eleven dollars per barrel is about 50 per cent of the unit technical cost and the 11 dollars does not cover the unit operating cost of a deep water barrel.

“ It is really producing a barrel at a loss. At low oil price, gross revenue at the same production level is dismal, meaning low royalty revenue, low tax revenue implying a significant budget deficit.

“Government of states like the federal government is major employers of labour, wages or salaries may not come on time if they come at all.

“Capital budget for infrastructure would have to be shelved. Nigeria is certainly in an abysmal situation.

“Recession is inevitable and perhaps, it may take two to three years to reverse it.

“The way out in the short run is prudent spending targeted at local consumption and putting on hold in the short run spending that will take a while to generate economic output for the national economy,’’ he said .

Iledare, a Professor of Petroleum Economics and Policy Research, said that the situation required gradual opening up the economy without jeopardising safety.

He also suggested that unnecessary foreign spending should be suspended unless absolutely necessary.

According to him, government must avoid borrowing to support pre-bendalistic life style.

“Bloated budget overhead must be rationalised if not eliminated.

“It is okay to borrow money to sustain access to energy but not for free energy consumption that benefits elite who are able to pay for it.

“The low oil price provides a means to bury subsidy for ever. But this must be by an act of National Assembly and not Executive order on the pages of newspapers,’’ he added

He noted that if NNPC remained the sole importer of Premium Motor Spirit (PMS) – petrol – the price at the depot must be regulated but pricing at the retail end must be deregulated.

He added that there should be no guaranteed or equalised margin at the distribution stations.

“In the long run, this is to think of diversifying sources of government revenue and downsising government economic activity.

“This is why I continue to advocate the passing of the Petroleum Industry Governance Bill (PIGB).

“It is almost a year since the new administration started, nothing has come to fruition on Petroleum Industry reform,’’ he said

Iledare said that the backbone of Nigeria’s economy remained the oil and gas industry, noting that the effect of its collapse would be worse in the long run on the economy than the Coronavirus pandemic.

Branson wants assistance to Virgin airlines

By DPA

British entrepreneur Richard Branson says his Virgin airlines need government financial support if they are to survive the severe impact of the COVID-19 pandemic on the aviation industry.

Branson promised to do everything he could to keep his flagship Virgin Atlantic operating.

“But we will need government support to achieve that in the face of the severe uncertainty surrounding travel today and not knowing how long the planes will be grounded for.

“This would be in the form of a commercial loan – it wouldn’t be free money and the airline would pay it back,” he wrote in an open letter to Virgin staff.

He noted that low-cost airline easyJet had secured a loan of 600 million pounds (746 million dollars).

On Friday, the Financial Times reported that the government had asked Virgin Atlantic to resubmit a request for a 500-million-pound bailout package, feeling the airline had not shown that it had explored other options for extra funding.

Australian broadcaster ABC had said that Virgin Australia is facing insolvency and seeking a bailout of 1.4 billion Australian dollars (890 million dollars).

Branson said: “Virgin Australia is fighting to survive and needs support to get through this catastrophic global crisis.

“The reality of this unprecedented crisis is that many airlines around the world need government support and many have already received it.

“Without it there won’t be any competition left and hundreds of thousands more jobs will be lost, along with critical connectivity and huge economic value.”