The Nation Newspaper

Category: Discourse

  • Financial Discipline… making every naira count

    Financial Discipline… making every naira count

    Discipline… it is all in the detail

    Economists have long found Nigeria to be something of a conundrum. The macro picture has always appeared compelling large population, oil reserves, mineral reserves, endless tracts of arable land, land and sea borders for regional domination. Indeed the absurdity of our underperformance is only surpassed by our ability to accurately quantify our losses and missed opportunities.

    In the short period that I have been privileged to serve as Minister of Finance, I have observed that even the most basic systems and controls over the management of our resources are in dire need of strengthening. While we are regaled with and shocked by details of amounts stolen, diverted or wasted, we must face the cold reality that such acts are facilitated by weaknesses in our systems. Even if we successfully prosecute and jail every looter, ghost worker and other economic saboteur, there is every risk that those caught will only be replaced by persons who are just as bad, or worse – unless we radically strengthen our systems and institutions.

    Our President’s brave and committed fight against corruption and waste is as much an economic crusade as it is a moral one. The objective is not just to stem the corruption and loss but to execute an economic plan to channel those monies into much needed areas that will support and reposition the economy.  In short, the fight against corruption is not about “retribution” and meting out punishment, it is about releasing funds for our economy. I am humbled to be part of the ongoing work on recovery and can report that the urgency in the work, especially our interface with nations where our money has been stashed, is propelled by our need for funds to invest into our economy.

    Our economic plans are not about austerity and frugality; if that were the case then we would not be attempting an expansionary budget. We could have pursued fiscal consolidation and maintained 2015 budget size, and then introduced severe public spending cuts to balance the books by laying off workers and cutting projects. Had we done so, we would by now be the darling of the IMF and other multi-laterals.

    Conversely, we are undertaking an ambitious counter cyclical strategy to stimulate our sluggish economy and expanding government spending with a focus on infrastructure, the true catalyst for economic growth. This will have contractors returning to site and re-engaging workers, it will see new projects commencing, arrears released and economic activity reinvigorated across the nation.  We plan to take advantage of low global prices for commodities and contract prices. Existing contracts are being renegotiated downwards, with significant savings recorded and new projects priced to reflect current commercial realities. Our spending stimulus is private sector driven, supported by a robust procurement system that will see permanent local capacity built in a number of sectors including oil and gas, housing construction and agriculture. However, and this is the key differentiator, we plan to spend in a disciplined manner that will extract the maximum value for every naira spent.

    The process of building the internal control framework to support this need for disciplined spending has begun in earnest. Our Efficiency Unit has reviewed four years of detailed expenditure data to identify trends and is already negotiating volume discounts that appropriately reflect the buying power of government. Personnel remains our largest cost. In addition to the BVN driven cleaning of our payrolls that has so far removed 23,000 fraudulent entries, we have initiated significantly stronger controls over our payroll.  These efforts will exert a constant downward pressure on personnel costs until such a time as we have assurance that every payment is accurate and valid. A similar process is now commencing in Pensions. The N160 Billion spent monthly on personnel and pensions related costs demands this as an absolute minimum.

    The revenue focus is non oil. We are revisiting historical decisions that are no longer in the best interests of the national economy. The establishment of various Boards and Parastatals to undertake the operational and revenue generating business of government was a well-intentioned attempt to provide separation from policy makers. However, as the economy has grown, so too has the revenue earned in these agencies and their financial autonomy has grown in a manner that no longer fully serves the public interest. Port charges, maritime charges, airport landing fees, visa charges, passport charges, telecoms licence fees, among many others, must be tracked and accounted for. While the Fiscal Responsibility Act was designed to provide control, actual compliance has been poor. The result has been leakage on a staggering scale, as findings from our ongoing audits suggest. This is a serious issue. The upside is a significant revenue opportunity which the TSA implementation has given us sight of, and which we are supporting with a proactive drive for improved accountability.

    At the same time, our traditional revenue sources are being supported to be more effective. In Customs, we are making the necessary investments in container scanners and other equipment required to improve collection efficiency. This is combined with the results of a compensation survey which will see the introduction of performance related pay, to reduce corruption and create an alignment of interest that will enhance revenue generation. With FIRS there is a well-defined plan to enhance compliance by widening the tax net. Using data to drive tax compliance, we will ensure that the tax regime is efficiently administered and that everyone pays their fair share.

    There is a need for disciplined and effective system of managing our financial resources to ensure maximum value. We will no longer measure performance by the size of our budget or the amount disbursed; we must measure by the impact of that expenditure on the lives of Nigerians. To measure and manage this we have already made some key changes in the way funds are released. We have abandoned the old system of capital releases that funnelled a proportional share of available funds released to each Ministry, Department and Agency. We have a robust system in place where funds are tied to specific outcomes as documented by each agency. This is being supported by follow up reviews to ensure implementation.

    As Benjamin Disraeli once said, “We are not creatures of circumstance; we are creators of circumstance.”  I am firmly convinced that Nigeria is on the right path. The path of discipline will confront some age old destructive habits. It will challenge some unwritten rules, and I personally will step on some highly placed toes on this journey. All this I am fully prepared for, and so I do not expect nor do I particularly want to be popular.

    However, I will act in the best interest of all Nigerians to ensure that we build the economy that we desire and richly deserve.

     

    • This is the second of three articles by Mrs. Kemi Adeosun, Minister of Finance, Federal Republic of Nigeria.
  • Nigeria: The imperative return to Agriculture

    Nigeria: The imperative return to Agriculture

    By Owoola Wasiu Abiola

    In the 1960s, Nigeria was a beacon of agricultural prosperity. Renowned for its palm oil, groundnuts, cocoa, and rubber, the nation thrived as a leading exporter of these commodities. However, the discovery of oil in the 1970s shifted the country’s focus, leading to a significant decline in agricultural investment and output. Today, as Nigeria grapples with economic instability and a growing population, there is a compelling need to rekindle its agricultural sector.

    Economic Diversification

    Nigeria’s economy has long been heavily reliant on oil, which accounts for over 90% of its export revenue. This dependency has made the country vulnerable to global oil price fluctuations. In contrast, agriculture offers a more stable and diversified economic base. By investing in agriculture, Nigeria can reduce its economic volatility and create a sustainable growth model.

    Agriculture has the potential to generate substantial revenue and reduce the nation’s dependency on oil. Revitalizing this sector can stimulate economic activities, create jobs, and enhance food security. With arable land covering around 40% of its territory, Nigeria has the resources to become an agricultural powerhouse once again.

    Job Creation

    Unemployment remains a significant challenge in Nigeria, with millions of young people entering the job market each year. The agricultural sector can absorb a large portion of this labor force, providing employment opportunities and reducing poverty. From farming to food processing and distribution, agriculture offers a wide range of job prospects.

    Moreover, the development of agro-based industries can spur technological advancements and innovation. Training programmes and investments in modern farming techniques can empower the youth and equip them with the necessary skills to thrive in the agricultural sector.

    Food Security

    Food security is a critical issue in Nigeria, with a growing population and increasing demand for food. Despite its vast agricultural potential, the country still relies heavily on food imports to meet its needs. This dependency exposes Nigeria to global market fluctuations and threatens its food sovereignty.

    Revitalizing agriculture can enhance domestic food production, ensuring a steady supply of affordable and nutritious food for all Nigerians. By focusing on sustainable farming practices, Nigeria can achieve food self-sufficiency and reduce its reliance on imports. This, in turn, will

    stabilize food prices and improve the overall quality of life for its citizens.

    Rural Development

    Agriculture is the backbone of rural economies, where the majority of Nigerians reside. Investing in this sector can spur rural development and reduce the urban-rural divide. Improved infrastructure, access to credit, and supportive policies can transform rural areas into vibrant economic hubs.

    Enhancing agricultural productivity can also lead to better living standards in rural communities. Farmers can enjoy higher incomes, better healthcare, and improved education for their children. This holistic development approach can alleviate rural poverty and create a more balanced national economy.

    Conclusion

    Nigeria’s return to agriculture is not just an economic necessity but a strategic imperative. By diversifying its economy, creating jobs, ensuring food security, and fostering rural development, the country can build a more resilient and prosperous future. The agricultural sector holds the key to unlocking Nigeria’s full potential, and it is high time the nation reclaimed its agricultural heritage. Investing in agriculture today will sow the seeds for a thriving and sustainable tomorrow.

    Nigerian Government can create an enabling environment for agriculture to thrive by providing loans and facilities to farmers; boost mechanization; storage facilities; introduce Agriculture as a compulsory subject in Secondary Schools to catch them young; resuscitate Agricultural Board across the States to secure favorable agreements to purchase and subsequently sell to meet domestic needs.

    Owoola Wasiu Abiola is a professional in the Oil and Gas sector with over 21 years experience and holds a Master of Business Administration Degree from Rivers State University of Science and Technology.

  • Developing sustainable infrastructure

    Developing sustainable infrastructure

    Concluding text of paper presented by Chairman, Bresson, Mr. Gbenga Olawepo-Hashim, titled: Nigeria: facilitating resilient and sustainable infrastructural development,  during the Nigerian Students Society’s Annual Symposium at the Imperial College, London.

    The participation of new Independent Power Producers (IPPs) in the sector are specially very crucial because whilst privatisation of existing utilities merely transfers ownership to the new operators, it is the new greenfield IPPs that add capacity to the network. Unfortunately, in the past five years no new IPP has been inaugurated in Nigeria. As a matter of fact last year no single turbine was imported to Nigeria and none has been imported this year, compared to 15 GE turbines that were shipped to Egypt this year alone.

    Ten years running, this reform has been hampered by the difficulties associated with the private sector participation in infrastructure development identified previously. The difference here is, the sense of urgency that the resolution of these issues in the power sector demands. They are questions to which answers cannot be delayed further; they must be addressed right now! Policy formulators only lament and sing the power inadequacy like a song and failing to take the practical executive actions that do not even require legislation to achieve.

    As an operator in this sector, I have outlined hereunder some immediate steps to be taken to recalibrate the power sector reform:

    1. Dismantle the delay in licensing of IPPs and the signing of Power Purchase Agreement (PPA) through an executive guideline for the industry that defines Standard Operating Procedures for agencies and institutions. Processing licence applications and signing of Power Purchase Agreements should not take more than 90-120 days. Currently, it takes two to three years when, in fact, a complete Power Plant could be delivered between 18 and 24 months.
    1. Federal Government should make Sovereign Guarantee available to all PPAs that the Nigeria Bulk Electricity Trading Company (NBET) concludes and with the requisite 90-120 days LC to ensure bankability of such agreements.

    III. Distribution companies and eligible customers, once licensed, should be able to sign PPA with the Generating Companies (GENCOs) and IPPs for the supply of Power without the undue meddlesomeness of the Nigeria Electricity Regulation Commission (NERC). This is the provision of the Electricity Sector Reform Act and this is what it should be.

    1. NERC should be professionalised and focused on effective regulation of the sector; meting out punishment for infractions in the sector rather than attempting to administer the sector as it is doing.
    1. More attention should be paid to sanctioning operators, particularly in the distribution sector who have not delivered on their terms of purchase of their network as the entire value chain depend on effectiveness at this level.
    2. A cost-reflective and fare electricity tariff must be put in place that guarantees reasonable return on investment and satisfies the consumer that he/she has been fairly charged. It is my assumption that an Industrial consumer will be willing to pay a reasonable price for what he/she consumes rather than spend N90/kw on self-generation. The wide spread use of pre-paid meter must be implemented immediately to make this regime work.

     Surmounting the challenges to rapid infrastructural expansion

    Ladies and Gentlemen, though the obstacles to accelerated infrastructural expansion in Nigeria are daunting they are surmountable. Once policy makers and implementers summon the will to immediately take far-reaching actions that are focused and sustained along the following lines;

    1. Reordering government expenditure to allow for commitment of at least 50 per cent of government revenue to Capital Expenditure in the 2016 budget and with the aim of increasing to 60 per cent and 70 per cent in 2017 and 2018 budget cycle respectively.
    1. The Federal Government should embark on Contractor financed infrastructure projects based on internationally benchmarked pricing; in the construction of rail tracks, supply of locomotives and coaches, and other critical infrastructure. Such selected projects must have the necessary projected cashflow to pay back to qualify for approval.

    III. There should be an immediate bid process for the concessioning of two sites for the construction of two green field ports in areas with the natural port depths.

    1. Immediate elimination of bureaucratic curtains, red tapes and elimination of duplication of regulatory approvals for private sector direct investment in infrastructural development as now common in the power sector. This is to be achieved by the instrumentality of a sectorial guideline that institutes a Standard Operating Procedure detailing timeline for processing applications with a high-level audit system of the processes.
    1. The Federal Government should use its Sovereign Financial Instruments to give credit guarantees to strategic private sector investments in key areas such as power generation and transmission as well as other urgent infrastructural priorities. The external debt profile is comparably low and puts Nigeria in a good position to leverage its sovereign instruments for infrastructural growth. Nigeria’s debt to GDP ratio is 10 per cent compared to Brazils 58.91 per cent, South Korea’s 35.98 per cent, China’s 41 per cent, India’s 66 per cent, Euro zone’s 91 per cent and US’ 102 per cent.
    1. Global Infrastructural spending is predicted to have a rebound within the next ten years. An Infrastructure-starved economy such as Nigeria, should position itself to receive a good slice of the funds. According to a research by Oxford Economist and Price water House Cooper about $78 trillion USD is to be spent on infrastructure globally within the next 10 years. Only 10 per cent of the money will be spent in Europe, 60 per cent in China and the Asia Pacific, the remaining will be spent in the rest of the world. Nigeria is in a good stead to attract a significant portion of the funds projected for the rest of the world especially those emanating from private funding institutions and infrastructure funds including pension funds. The IRR on Infrastructure investments in the country, which averages between 15-21 per cent after taking into account the allowance for risk premium and insurance makes the Nigerian market competitive if the manmade obstacles are immediately removed. IRR on projects in Nigeria, which could hit 25-40 per cent in oil and gas infrastructure compares favourably well in the emerging markets; a typical IRR trend in emerging markets is 12-19 per cent.

     Restructuring the economy for a task of building a resilient infrastructure and an all-       round socioeconomic development

    Ladies and Gentlemen, whilst the above suggestions would suffice to kick start the process of rapid infrastructural development, they are inadequate to do so on a sustainable basis. The task will require the restructuring of the national economy with new set of goals, objectives, organisation and structure. The economy will have to be organised in a manner that can make the needed quantitative and qualitative leap.

    Indeed, every economy in history that has witnessed transformation from a primary producer status to a modern industrial economy has had to undergo a rapid leap over an identifiable historical epoch. It is at such a time that the technical capacity for mass production of steel, machine tools, and chemicals are acquired. It is at such a time that manufacturing appears on a mass scale and solid minerals and agricultural are linked to industry.

    For the Nigerian quantitative leap to be achieved the economy must target a double digit growth over at least ten years period; at such a time, the financial sector will be re-directed and aligned to the goals of financing a modern industrial economy.

    We have listed below some important policy objective and goals that will form the direction of a new economy imbued with the capacity for achieving sustainable development;

    1. a) Monetary and Fiscal Policy must be geared towards the growth of the Infrastructure, Manufacturing, Industry and Agriculture.
    2. b) Tax and Revenue collection must be reformed to increase nationally collectable revenues.
    3. c) Interest rate must be kept at single digit between six and eight per cent.
    4. d) Economic planners must prioritise massive investment in iron and steel, meteorology, machine tools, glass production and petrochemicals.
    5. e) SMEs and small agricultural producers should enjoy concessionary lending rates.
    6. f) Foreign Exchange Regime must be stable to attract long-term investment.
    7. g) Proprietary rights of individuals must be respected as well as the sanctity of contracts and agreements to make Nigeria an attractive destination for private sector investment.
    8. h) Protection of Intellectual Property must be given high priority to spur innovation and the creative sector of the economy.

    Bridging the social divide

    Nigeria as a country cannot pull together in peace and stability for the goals of sustainable development if majority of her people still live in squalor and poverty whilst we relish in impressive GDP figures. The fact that more than 70 per cent of the population live in poverty and 60 million are illiterates [UNESCO] is both a scandal and a tragedy.

    It is no longer news that our country is growing apart like an apartheid State. It is true that the middle class has grown six-fold in the past 12 years; so also are the numbers of complete illiterate citizens, mostly young people without any skill to participate in the modern world because we have in the recent past, surrendered the welfare of our people to market forces – the survival of the fittest! No wonder our impressive growth figures are blighted by massive upheavals in the underbelly of our country.

    The social problems are not going to abate except Nigeria invests immediately in the welfare of the people. According to a recent study by the African Development Information Centre, by 2030, Nigeria’s population will grow to about 210 million; 70 million of this forecast population will be living in Northeastern Nigeria where there is an extremist insurgency; 35 million of which will be under the age of 15 and would not have received any form of formal education. This is alarming!

    We must invest now to bridge the social divide by making primary and secondary education  free of all cost with feeding and welfare support at primary school levels. This must be a federally financed program worked out with local authorities for effective implementation. Free education must be entirely free indeed without hidden cost such as examination fees and cost of uniforms.

    The quality of educational and health institutions must be upgraded through the recruitment of qualified professionals, training and retraining of existing hands making available needed equipment and infrastructure and improving productivity and output through a scientific audit system that ties reward and emoluments to performance.

    Nigeria must quickly introduce a comprehensive program of accessible, cost-free and qualitative health service coverage for all Nigerians. Nigeria can afford these programs right now as we are already spending billions of naira managing the social upheavals that are caused by decades of ignoring the welfare of the people especially the young and the vulnerable.

     Conclusion

    Ladies and gentlemen, Nigeria has all it takes to confront the urgent task of turning around her infrastructure and building an economy that will surpass all predictions. The country has the most important asset a nation needs to be at the top – a very determined people – never giving up when even no one gives them a chance to pull through. Just 17 years ago Nigeria had only 400,000 phone lines today Nigeria has about 100 million. Last year Nigeria pulled a peaceful election even when some predicted her disintegration. The country has the energy to confront her challenges coming up stronger and better even sometimes from behind. With strong determination and positive actions we will surmount our challenges!

    Thank you for listening. God bless Nigeria, God bless her friends too!

    • Concluded
  • Developing sustainable infrastructure

    Developing sustainable infrastructure

    Text of paper presented by Chairman, Bresson, Mr. Gbenga Olawepo-Hashim, titled: Nigeria: facilitating resilient and sustainable infrastructural development, during the Nigerian Students Society’s Annual Symposium at the Imperial College, London.

    I am delighted to speak to this very distinguished audience on the occasion of the fourth Annual Symposium of the Nigerian Society here at the Imperial College London, an exceptional centre of learning and research.

    We have gathered here to talk about a great country Nigeria. Nigeria is great not just because it is the seventh most populous country on the planet. It is an important nation not only on account of her oil wealth. Nigeria is significant more because of the energy of her people, whose creativity and resilient spirit of enterprise continues to assure her progress even in the face of seemingly hopeless situations.

    It is due to the hard-work and industry of the ordinary Nigerians- the nation’s greatest asset, that Nigeria attained a GDP rebased at $510 billion in 2013 exceeding that of South Africa to become the biggest African economy even in the face of her parlous infrastructure.

    The feat is the result of the toiling of small scale   entrepreneurs, who continue to create value without adequate electricity, cottage food processors, without affordable financing, farmers without the scantest of state support; artisans, bold and imaginative business men and women, dynamic financial managers, young innovators creative artistes and hardworking professionals.

    Remarkably, Price Water Cooper predicts that the country’s economy will probably grow to be the 9th largest economy in the world by 2050. The basis for this has already been laid over the past ten years with the country recording 6-7% annual growth consistently. In 2015, even with the collapse in oil price – the country’s major export – the economy still managed to grow at 2.8% compared to 1.2% of South Africa; 1.5% in the Euro Zone;  -2.6% in Brazil and 2.0 % in the US last quarter. These occurred despite more than fifty per cent collapse in oil revenue and slowdown in government business due to the inauguration of a new government.

    Growth in the Nigeria Economy is expected to be sustained as the economy has acquired a resilience beyond oil and natural resource exploitation which accounts for only 14% of GDP as long as the political and security situation remains stable.

    Nigeria has also recorded a robust expansion of her middle class, which Standard Bank reported has grown by six-folds between the year 2000 and 2010.

    The Nigerian diaspora community is an integral part of the Nigeria growth story. In 2013, foreign remittances to Nigeria was a record $21billion USD.  This forms part of the incredible contributions of Nigerians abroad, innovators, small business operators and ordinary folks eking out a living for themselves the hard-way – picking off tough jobs that a lot of people in their host communities ignore.

    Brilliant people of Nigerian decent stand up daily to be counted as part of the positive pages of the rising Nigerian story. The Imafidon twins Paula and Peter broke the world mathematic record passing the Cambridge Advanced Level Math at age eight, the youngest ever to do so. Chinedu Echeruo, founder of Hopstop.com, purchased by Apple at a price of $1billion USD is blazing the trail in the ICT world.

    Dr Victor Olalusi who scored 5.0 CGPA at the Faculty of Clinical Sciences at Russian National Medical University in 2013, arguably the first in the world to do so are among a growing list of sterling performers.

    Back home in 2012, four Nigerian teenage girls namely Duro Aina, Akindele Adeola, Faleke Oluwatoyin and Bello Eniola figured a way to generate electricity from urine to power a generator for six-hours.

    Recently, 24-year-old Oluwatobi Olasunkanmi won the William Charnley Prize for the best First Class in Law at the University of Cambridge. Right here in this hall, we have Mervin Azeta, a female Chemical Engineer, who has just completed her Master’s here at Imperial with a distinction, having achieved a first class honour in her first degree from the University of Benin, Nigeria, and I know there are similar more stories of great achievers in this gathering today.

    This is the Nigerian spirit that turns out outstanding achievers from the harshest imaginable environment. Your guesses are as good as mine, where Nigeria can be in the next ten years if her hardworking people can enjoy the infrastructure support that their peers in comparable middle income countries take for granted. I suspect this is one of the reasons why the ICNS has invited us to explore the topic: ‘’Facilitating Resilient and Sustainable Infrastructural Development‘’.

     State of Nigeria’s infrastructure

     A number of studies in the recent past have highlighted the extent of decay and decline in the Nigerian Infrastructure. A 2014 World Economic forum report ranks Nigeria 140th out of 160 countries surveyed. A 2013 AFDP publication titled: ‘’An Infrastructure Action plan for Nigeria’’ reported that the Nigeria infrastructure accounts for 20-25% of the GDP compared to 70% of the GDP in most other middle-income economies with comparable size to that of the Nigerian economy.

    To drive the story home, one only needs to compare Nigeria’s 4000 MW available electricity capacity to South Africa’s 45 000 MW to a population of 53milion. To be at the same electricity generation capacity per head, Nigeria will need to achieve an estimated 160 000 MW available capacity for her 170million population. Water supply is not any better, as only 4% of the citizens had access to pipe borne water as at 2012 compared to 16% average for Sub-Saharan Africa.

    On Transportation infrastructure, while road transport remains widely in use with the countries road network expanding from 6000 km at independence to 197,000km in 2012 only about 18% of the roads are paved. The roads and bridges are in various states of disrepair; air and water transportation are below acceptable standards and our ports and railways services are in a near state of complete abandon.

    As a matter of fact, the country has not witnessed the construction of any new green field port over the last four decades despite a rapidly expanding economy. According to the AFDP 2013 study, of all the freight that arrived Nigerian port, only 0.2% throughput travelled by rail.

    The oil refineries are in an incredibly bad shape. Nigeria, the fifth largest producer of oil has turned into a net importer of petroleum products due to the shameful state of gas and pipeline infrastructure. Hospitals and Educational facilities are in a state of decay crippled by the manacles of poor maintenance and underdevelopment.

    The reasons for the infrastructure decay are not far-fetched. They include; lack of adequate investment from both the public and the private sector, lack of adequate maintenance programme and capacity building issues.

    To upgrade the nation’s infrastructure to support the desired economic growth target and socio-economic development objectives, the AFDP forecasts Nigeria requires $350 billion USD CAPEX investment over a period of nine years. It also estimates that $100billion USD is required over the same period as OPEX investment.

    A recent McKinsey projection on the cost of upgrading Nigeria infrastructure is not too far from the AFDP assumptions.McKinsey projects that $31 billion USD is required yearly over a period of ten years. Both studies expect most of CAPEX investments to come principally from Federal Government Infrastructure Funding commitment, Public-Private Sector collaboration through the PPP and direct private sector investment. Unfortunately, the funding commitment from the Federal Government to infrastructure has been disappointing as only a meagre $3.6 billion USD commitment to Capital Expenditure was provided for in the 2014 budget. Private sector commitment has also been small and slow in coming.

     Challenges of building a resilient and sustainable infrastructure

    The task of building a resilient infrastructure that will meet the developmental needs of the country are many but I will limit myself to five critical areas as I assume that this audience will be more interested in how to scale the hurdles than an exhaustive list of the problems.

    For our purpose I have identified:

    1. Funding
    2. Administrative and Bureaucratic impediments to private sector participation in infrastructure development

    iii. Man-Power challenges

    1. Lack of industrial base to locally produce the component of infrastructural facilities
    2. Re-calibrating the Electricity Sector Reform

     Funding

    Though Nigeria has been severally referred to as a rich country whose income has been ravaged by rampant corruption accounting for its abysmal level of infrastructural development; this assumption is only half the truth. The revenue collected by the Federal Government, even when not stolen, is grossly inadequate to cater for a population of about 170 million people.

    During the season of high Oil price, the country’s total receivables from oil sales amounted to about $50 billion USD in twelve months. This revenue is comparable to the 2014 earnings of Disney World, Florida, USA which was a record $48 billion USD.

    Ancillary to the small revenue base of the country is the misapplication of the revenue collected through a consistent disproportionate allocation of about eighty per cent of revenue to recurrent expenditure leaving little or nothing for Capital Expenditure. Lack of funding for Infrastructure, Manufacturing and Industrialisation is compounded by the shallowness of the Nigerian Banking system. The existing banks have proved incapable of lending to Infrastructure and the real sector.

    Policy makers will have to examine whether it makes sense for Banks to hold licences for merely charging a premium on the economy without adding the needed value for infrastructural growth and development of manufacturing. It may be time for decision makers to examine the propriety of encouraging successful global banking brands with reputation for infrastructure financing to bring more depth to the Nigeria banking sector.

     Administrative and bureaucratic impediments to private sector participation in infrastructure development

     There is no doubt that given the size of its market, the high rate of return that investment in the economy commands compared to other emerging markets, the country should be one of the best destination for private sector investment in infrastructure. The country also has clearly defined laws and institutions that spell out the path to private sector participation in the economy. Nigeria’s electricity sector reform Act 2005 for instance, is one of the most advanced reform laws in the emerging markets. Yet, the bureaucratic civil service, which most of the economic liberalisation laws seek to keep out of the way of private sector investment, struggles everyday to return to reckoning keeping investors applications for permits and licenses unattended to for years.

    Dismantling the unnecessary administrative red tapes and multiple agencies’ interventions in administrative processes is one of the simple but crucial step Nigeria must take immediately in order to receive the desired private sector investment in her ailing infrastructure.

     Manpower challenges

    Project developers in the country frequently bemoan the lack of qualified and technically competent hands for project implementation. The cost of engaging expatriate hands with requisite skill-sets is unsustainable and also creates cost over runs. There is an urgent need to reform educational curricular with a desire to emphasise the acquisition of technical skills required for the development of infrastructure and industrialisation of the country. Particular attention must be paid to the development of middle level manpower such as welders, mechanics, builders with up to date certification in modern vocational training centres. The training of Accountants, Engineers, Lawyers with project development and management skills are also urgently required. The pool of qualified Engineers and other professionals of Nigerian decent in the diaspora are crucial to the task of building local manpower capacity for industrialisation and development.

     Lack of industrial base to locally produce the component of infrastructural facilities

     It is trite fact that most modern infrastructure, machines tools and equipment are largely- after invention and design- a product of the coupling together of metals, iron, steel, glass, aluminium and petrochemicals. The absence of sufficient local production of these items means that a nation will be forever consigned to mass importation of finished goods at prohibitive cost and condemned to the status of a primary producer.

    This particular challenge of the Nigerian economy is perhaps its most fundamental impediment to industrialisation and infrastructural growth. The quantity of steel produced in a country is a signal to its technological and industrial advancement. Nigeria produces only 2.5 million tonnes per year and imports about 17million tonnes – very low quantity produced and consumed- compared to other middle-income economies. Turkey produces 34 million tonnes per year, India 86.5million tonnes and Brazil 33.9m tonnes per year.

     Re-calibrating the electricity sector reform

     Building Sustainable Infrastructure and a new industrial economy is impossible without adequate electricity supply at the point of need. Most manufacturers, particularly small scale producers in Nigeria, have had to bear huge cost through self-generation of electricity using diesel and petrol as fuel. The self-generating energy supplier mode has a price tag of N90/kw compared to N22/kw grid price of electricity.

    Given that prevailing interest rate to assess finance in Nigeria is 22% compared to 8.5% in South Africa, 7.8% in Egypt, China 3.4% and in the US 2.33%, the Nigerian manufacturer is already not competitive. The burden of high cost of production could be lighter if electricity supply can be assessed at the grid price on a stable basis and even at a price a little higher than the current grid cost.

    The electricity sector reform inaugurated by the 2005 Electricity Sector Reform Act in Nigeria was designed to address the challenges facing the sector with a view to making private sector the driver of investment and efficient management of the power sector. The reform rests on two legs; privatisation of the existing utilities on one hand and the licensing of Private Independent Power Producers on the other.

    • To be concluded
  • Chioma Adeoye at 60: An Amazon with a heart of gold

    Chioma Adeoye at 60: An Amazon with a heart of gold

    A public affairs analyst Olumide Lawal, in this piece, extols the virtues of Mrs Chioma Adeoye, an Evangelist and wife of Elder Adedayo Adeoye, retired Deputy Inspector General of Police who clocks 60 today.

    Women are nation builders. They are the real instruments of change in national affairs because; they provide the enabling environment at the home fronts for their husbands to excel in their different elective and appointive positions. Infact, the world revolves around women. The saying goes, that train a girl and you build a solid nation.

    To this writer, who is a childhood family friend of the ADEOYES, over a long period of years, the Matriarch of the family, Evangelist (Mrs.) Chioma Adeoye, who turns 60 years old on November 27,, 2015, is an epitome of a virtuous woman, in its true sense of it. She has remained a rock of gilbrater behind her amiable husband, Elder Adedayo Adeoye, a Retired Deputy Inspector General of Police.

    Of her 60 years sojourn so far on earth, she has spent a beautiful, eventful and lovely 38 years, matrimonially with our friend, Adedayo Adeoye as a jewel of inestimable value. A wife and mother of no mean repute. She came all the way from Mbaise, Imo State – to build an unshakeable bridge of affection across the Niger, with us in Ede, South-West, Nigeria. Evangelist Chioma Adeoye, has defied all odds, to be where she is today – a totally detribalized cultural ambassador per excellence. She has won accolades for herself because of her respect for family values, (in-law of whatever description inclusive), and various social traditions as obtained in her husband home stead – the Yorubaland.

    Give it to Evangelist (Mrs.) Chioma Adeoye, she has remained and still is, the indefatigable and supportive wife of Adedayo Adeoye, who held the home front contended for the 38 years, that her husband was on official postings to different parts of Nigeria and beyond as an Officer and Gentleman of the Nigerian Police.

    Evangelist (Mrs.) Chioma Adeoye, saw to it, that their matrimonial home was at peace with itself as well as with God. She saw to it, that their children’s education was not interrupted as a result of the husband official duties across the country. To the glory of God Almighty, her efforts in this regard, has tremendously paid off, with sterling qualities of her children, all of whom are today, holding solid and enviable career positions in their different callings. What could be more satisfying and salutary to a mother and indeed a father!

    This is not to lose sight of the all-round protection, solid discipline and unfailing financial support, lavishly thrown at the family by its Patriarch, DIG Adedayo Adeoye (Rtd.) to make for his official absence from the home. That effort, would have paled into insignificance, if there was no responsible wife and mother, like Evangelist (Mrs.) Chioma Adeoye, to give due attention to what was going on around the children at their formative years. Somebody say Halleluyah!!!

    In Ede, which is now the first home of Evangelist (Mrs.) Chioma Adeoye, she is well loved and admired by the majority of the people. The reason for this is not far-fetched. This woman of tremendous substance relates with absolute ease and candour with the low and mighty, never looking down on anybody. Though, she is mischievously misunderstood by a negligible few, because she will not suffer fools gladly. She is very firm and Godly thorough, as far as asserting her rights are concerned. A situation, which apparently may not have gone down well with those, who may want to lord it over her unjustly, with a view to reaping where they do not sow.

    I am an authority, as a close family friend, to state unequivocally, that Evangelist (Mrs.) Chioma Adeoye, have been rightly over protective of her husband and his interests, out of genuine concern for the sustainability of the family heritage and legacy, so as to avoid a situation of ‘hosannah today, crucify him tomorrow parlance’. For this, she has no apology to offer anybody, because he or she who wears the shoe, know where it pinches.

    One thing you cannot take away from Evangelist (Mrs.) Chioma Adeoye, is her total submission to the service of her Creator – the God Almighty and her chosen religion, Christianity. Despite her privileged status and social disposition, she cares a lot about those around her, particularly, the less-privileged, to the extent that, she runs a Pastoral Ministry, to help some Pastors improve on their callings. Despite overtures from traditional rulers to give her chieftaincy tittles, she has politely declined them, preferring instead to work in the Lord’s Vineyard, winning souls for Christ. Evangelist (Mrs.) Chioma Adeoye, is a prayer warrior, that has helped her family to believe entirely in God Almighty for the realization of all they crave for in life.

    It is to her eternal credit, that when her husband retired gracefully from the Nigerian Police in April 2009, at the age of 60, she joined efforts with him, to institute a scholarship scheme to immortalize the family name. That singular and patriotic love for mankind has seen over 200 students benefiting from the scheme. This writer, served as the Master of Ceremony at the maiden edition of the scheme in 2008. That scheme to the glory of God, has translated into an Adedayo Adeoye Foundation. Let somebody again shout Halleluyah!!!

    A close look at Evangelist (Mrs.) Chioma Adeoye,  our wife of 38 years, does not indicate her to be 60 years old. A sure-footed woman at peace with herself and her God. Very articulate and composed in her dealings with fellow human beings. Why then must she look 60? This ‘little girl’ of 20, no doubt, is an exemplary study in virtuous womanhood. She bears nobody any grudge and goes further, to ask God to forgive those who might have wronged her, as she has since forgiven them. This is the stuff, women with hearts of gold, of which Evangelist (Mrs.) Chioma Adeoye is one are made of Evangelist (Mrs.) Chioma Adeoye, like her husband is fulfilled in life, with many grandchildren dotting over her. This gives her tremendous joy.

    Evangelist (Mrs.) Chioma Adeoye, has resolved, that her next 60 years or more on earth, when she will be truly ‘sixty’, will be committed more vigorously to the service of God, improvement of mankind and giving back more to the society, that has been very kind to them. In years gone by, Evangelist (Mrs.) Chioma Adeoye, was a bit active in politics, not for elective purposes, but to enable women assert their rights, particularly, the Police Officers Wives Association, where she served as Chairperson Zone 2 and Jigawa State Police Command, when her husband was in service.

    This is to wish our own Mother Theresa, an ebullient, charismatic, truly loving and loveable strong woman, cast in the mould of Indira Gandhi of India, Bandranaike of Ceylon, Magaret Thatcher of England, a more rewarding and positively purposeful years ahead. Enjoy your day, our dear wife and caring mother.

    • Olumide Lawal

    Writes From Ede, Osun State.

     

  • The modern port, global supply chain optimisation

    No matter how information technology advances, the world trade cannot be materialized without ports. This is exactly why every country needs to develop much more advanced and efficient ports for its prosperity

    – Dr. Mahathir, former Prime Minister of Malaysia

     

    INTRODUCTION

    Ports today face two competitive challenges the large increase in volumes and the need for greater efficiency. This paper will identify catalysts for optimum future development of port infrastructure as well as the implication on export competitiveness, port commerce, inter-port co-operation and competition. It will also provide a framework for improving integrated logistics network as a tool for utilising the full capabilities of modern ports, provide some insights on the cost of poor logistics to country competitiveness and the sources of those higher costs. Beyond cost and time taken to deliver goods, it will also delve into the predictability and reliability of supply chains.

     

    Seaports and Supply Chains

    Ports, as members of a supply chain and a part of a cluster of organisations, have a huge role to play for seamless operations. These roles include:

    • relationships between the port operators and the focal firm
    • supplied services that add value
    • information and communication technologies
    • performance measurement indicators common to supply chain partners and
    • introduction of the logistics concepts of lean and agile

    The challenges facing shipping and the world’s ports today are not only related to the quantity but also the quality of services. The continuous progress of globalization of shipping and trade business is resulting in increasing pressures on ports cost and improve operational efficiency.

     

    The Role of Modern Seaports

    The role of modern seaports involves integration in the supply chain. Fulfilling this role means greater ability of the port to satisfy customers and achieve its objectives. On this basis, it is hypothesised that specific measures of integration in the supply chain will be positively related to specific measures of port performance and competitiveness the measures themselves reflecting contemporary logistics goals and not merely traditional efficiency measures.

     

    Key Challenges Faced in  Global Logistics Network

    Achieving True Excellence within a Global Supply Chain is as much a journey as it is a goal. The key challenges which ports face within the global logistics network include:

     

    • lengthening of the supply chain
    • difficulty & cost inefficiencies in transportation execution
    • lost sales/mismatch in supply & demand
    • import/export compliance procedures
    • disconnect between international and domestic transportation
    • lack of strong technology support
    • lack of experience and skill sets

     

    Characteristics of a World-Class Transportation Logistics Network

    The characteristics of a World-Class Transportation Logistics Network include:

    • optimal design of global supply chain
    • integrated planning and execution processes
    • integrated international and domestic logistics
    • global logistics visibility
    • dynamic logistics routes
    • logistics process automation
    • collaboration with supply chain partners
    • compliance to changing regulations
    • making the financial supply chain connection

     

    Competitive Performance Measures for Ports

    Marlow and Paixao (2003) and Tongzon and Heng (2005), among other writers, had identified the following five competitive performance measures for ports:

     

    1. Price (Cost Advantage)
    2. Quality
    3. Reliability
    4. Customisation
    5. Responsiveness

     

    Laggards are taking the full brunt of rate increases and capacity/performance shortfalls while leaders are taking action to avoid these problems by:

    • trying to improve overall service and financial performance
    • investing in the right place
    • focusing on value
    • thinking end to end
    • Leverage technology (network design, logistics, visibility, analytical solutions, etc.)
    • tapping local talent
    • manage risk

    In other words, Leaders act as internal XPL s or even as profit centers and every transport move has a buy-side and a sell-side .

     

    Contemporary Developments

    Contemporary developments in maritime transport and logistics indicate that ports should play an important strategic role as a member of a supply chain that involves sea and inland transportation.

    There are six parameters that account for most of the variation in the degree of seaport integration in logistics and supply chain management.

     

    These parameters are:

     

    1. adoption of information and communication technologies,
    2. relationships with shipping lines,
    3. value added services,
    4. inter-connectivity/inter-operability with inland modes of transport,
    5. relationships with inland transport operators and
    6. channel integration practices and performance

     

    Infrastructure and Export Competitiveness

    Infrastructure development is a key element of a country s ability to produce and move   goods. O Rourke and Williamson (1999) argue that all of the commodity market integration in the Atlantic economy after the 1860s was due to the fall in transport costs between markets….

    Weak infrastructure is a major impediment to trade, competitiveness and sustainable development in most African countries. Recent literature has emphasised the dependence of trade costs on infrastructure.

     

    Trade costs

    Trade costs can be defined as the cost of transaction and transport associated with the exchange of goods over and above the marginal cost of production. Broadly defined, trade costs include all costs incurred in getting a good to a final user other than the marginal cost of producing the good itself.

    • Continues next week

  • Nigerian logistics infrastructure: Challenges & prospects

    Nigerian logistics infrastructure: Challenges & prospects

    Abstract

     

    For organisations and companies to be competitive in a globalised  market, they need to move their products and services around the globe so as to meet customer demands and needs. In the light of this, competitiveness cannot be delinked from efficient infrastructure chief of which a competitive logistics transport system is crucial.  Thus, the importance of efficient infrastructure and logistics transport system to economic development cannot be over flogged if countries and organisations want to attain economic prosperity in a now globalised world.

     

    Introduction

    Infrastructure is defined as part of a structure; material or economic base of a society or an organisation.  Therefore, infrastructure can be seen as the basic structure that fosters the good performance of cities’, states’ or countries’ essential services.  In this sense, for a country to have a good logistics infrastructure system in the different modes of transportation, constant investments from both public and private sectors are needed.

    Organisations, especially in a competitive and globalised world, require infrastructure compatible with their needs and demands, in order to transmit their products and services to different producers and demand centres in different parts of the globe.

     

    Infrastructure as a

    competitive factor

    Infrastructure as defined above can be understood as the basic structure directly responsible for the efficient functioning of the transport, education, healthcare, sanitary, security, communication, energy systems and others that support a country’s economic development. Thus, the fundamental factors to competitiveness are established by economic performance, government, business and infrastructure efficiency.

    We will look at the different segments of infrastructural requirement for a virile logistics system.

     

    Transport infrastructure system

    The existing transport infrastructure in Nigeria for obvious reasons is affecting the economic performance and organisations competitiveness.  The transport infrastructure in Nigeria consists of the following modes: road, rail, maritime, pipelines and air.  From available statistics, the bulk of cargo transported round Nigeria makes use of the road system. The pipeline system basically is used to transport oil, gasoline, diesel, natural gas and others, the air system are probably the less used in comparison with rest.

    We will discuss them under the following headings:

    Maritime/shipping;

    Rail transportation;

    Inland waterways

    Road transportation.

     

    Maritime/shipping:

    One of the major challenges facing Nigeria at present is that it has no meaningful participation in the shipping industry on which Nigeria depends, both for exports and Imports.   Practically all Nigerian Exports are shipped “Free on Board” (FOB), while its Imports are shipped ‘Cost Insurance Freight’ (CIF).  The oil rigs in Nigeria waters and the vessel which service them are owned and controlled by foreigners.  Even the vessels involved in coastal trade and Inland Waterways covered by the Cabotage Act are mostly controlled by foreign Ship owners.

    Statistics show that Nigeria pays over $2 billion in freight each year to foreign ship owners either to export oil or to import finished goods.  Presently Nigeria derives no benefit from the freights incurred.  From available records the value of vessels engaged in the three areas of Nigeria’s shipping business namely: offshore rigs and support vessels, coastal cabotage trade and import and export trade, amount to well over $20 billion.  The consensus is that if Nigeria can gain a foothold in its Shipping Industry, the potential would be enormous:

    Job creation;

    Foreign exchange earning;

    Wealth creation;

    Indigenous shipping capacity.

     

    Rail transport:

    The problems of Nigerian railways are many including insufficient locomotives, rolling stock, poor working capital, obsolete signalling and communication equipment, narrow gauge system, poor financial and managerial support base and lack of political will.  Government needs to re-launch the 25year strategic rail vision for Nigeria, change from narrow to standard gauge, strengthen the curves and gradients of the existing narrow gauge and professionalize the management structure.  In spite of the conscious efforts at ensuring prompt and timely maintenance of assets, the main constraint of effective infrastructural assets management in the Nigerian Railway Corporation remains inadequate funding by successive governments resulting in:

    • Poor infrastructural assets management
    • Delays in accident clearance resulting from non-availability of needed materials and tools.
    • Poor mechanization of track maintenance
    • Inadequate number of inspection vehicles
    • Delay in the rehabilitation of washout sites in the North Eastern section of the NRC (between Bauchi – Gombe)
    • Lack of adequate maintenance spare parts for locomotives and rolling stocks

     

    Inland waterways

    transportation

    The Nigeria Inland Waterways Network is reputed to be one of the longest in the world spanning over 3000 kilometres.  It consists of 50 Rivers, including Rivers Niger, Benue, Cross River, Kaduna, Imo, Ogun, Sokoto and Lakes in Oguta and Chad.  However, this great transport resource is still underutilized.

    Development and utilisation of Inland Waterways in Nigeria will improve logistics to a large extent, which explains recent efforts by the government to dredge the River Niger by the Nigeria Inland Waterways Authority.

    The authority says successful conclusion of the dredging project indicate great economic benefits to Nigeria and populations along the waterways.

     

    Road Transportation:

    Since 1960, Nigeria’s road transportation infrastructure has enjoyed the largest outlay of foreign investment compared with other modes and remains the preferred option for door to door linkage.  Until recently our policy initiative on road infrastructure development, funding, maintenance and even operations have been the sole responsibility of the various tiers of government.  The on-going initiative in encouraging private sector participation in the transport chain and logistics optimisation is encouraged.

    Generally, a holistic strategy involving the overall improvement of not only the road mode, but also the rail, water, and air modes are developed.  In this connection a blue print should be evolved instead of the current sub-sectoral and uncoordinated approach.

    It is also recommended that the private sector should be involved in the planning and development of transportation as part of the Public Private Partnership initiative of the present Government.

    Other Infrastructure Issues:

     

    Logistics education

    The key to corporate growth and profitability in years to come is to provide top customer service at lowest overall logistics costs.  This requires logistics professionals, with analytical and technology skills, supply chain knowledge, practical down-to earth logistics experience and line management leadership. There is a demand for top quality logistics professionals at all levels, including analysts, line supervisors, sales professionals, managers, directors and vice presidents. Salaries range from entry-level positions in the high twenties / low thirties to senior executives, earning well into the six-figures.

    A broad base of business skills, knowledge of the logistics process, and relevant work experience will give you ample opportunity to begin your career with a manufacturer, retailer, logistics service provider or other organization. One could begin at an operator level e.g. stock controller, fork-lift truck driver or warehouse operative. One might even begin as a management trainee, analyst or first level supervisor, and as one demonstrates management capabilities, one can assume positions in logistics or in other arms of the organization.

    One key to success in this field is flexibility. In logistics you will work closely with people throughout your company – manufacturing, marketing, finance etc. Depending on the size of your company, your initial responsibilities may include one or more of the logistics functions. Some positions will require you to specialise in a specific area of logistics. There are numerous opportunities and career paths in this field it is up to you to seek them out and develop appropriate skills to be successful

    Infrastructures are very important to any country in terms of attracting investment and business and to organizations when it is time to decide where to locate an investment, build a factory, establish a regional office, etc.

    How easy a country is to travel to and the modernity and efficiency of its air and seaports is always something a company and its executives need to consider.

    Logistics in the developed countries is very efficient because they have highly developed infrastructure.

    For instance, the United States, Japan, Canada and EU nations all have highly developed national highway systems, port facilities, state of the art air freight handling, and sophisticated information systems, advanced communication facilities, elaborate rail and multimodal transportation.

    Intelligent distribution and logistics aims to change the nature of the trade-offs in supply chain management by:

    • Improving the visibility of planning and control information across the supply chain, and hence improving the quality and speed of decision making;
    • Improving the robustness of logistics processes, making them less variable and more accurate;
    • Creating novel transportation solutions for distributing goods.

    Efficient supply chains for private industry are often very dependent on many public infrastructure assets.

    The overall logistics infrastructure of a nation can be evaluated on the basis of ten categories of major metropolitan indices including:

    Transportation and distribution industry,

    Transport and distribution work force,

    Road infrastructure,

    Road congestion,

    Road conditions,

    Interstate highway access,

    Vehicle taxes and fees,

    Railroad access,

    Water port access

    Air cargo access.

     

    Transportation and distribution industry – This category attempts to get a feel for the depth and strength of the metro-wide transportation and distribution industry and includes the number of companies in the metro area engaged in the transportation and warehousing  industry sector, along with the annual revenue generated by the transportation and distribution industry sector.

    Transportation and distribution work force –  This category attempts to get a feel for the depth and cost of the metro-wide transportation and distribution work force and includes the total annual payroll of companies in the transportation and distribution industry sector, the total number of employees, the average salary and the transportation and distribution revenue per employee.

    Interstate highway access – This category focuses on the interstate highway infrastructure and includes the number of interstate highways that pass through the metro area, as well as the number of interstate auxiliary routes such as bypasses, etc.

    Road conditions – This category includes the average roughness of the metro area’s roads, as well as the percentage of bridges that are obsolete or structurally deficient.

    Road congestion – Whether a metro area has adequate roads depends upon the amount of traffic using those roads. This category includes such things as roadway miles per capita, total miles of freeways, average daily freeway traffic and average daily traffic per freeway lane.

    Road infrastructure – This category attempts to look into the future in terms of keeping up with an adequate road infrastructure. It includes public roads mileage, capital outlay for roads and bridges, highway maintenance per mile and spending for highway law enforcement.

    Vehicle taxes and fees – This category includes highway user taxes and fees, as well as motor fuel excise taxes.

    Railroad access – This category includes the number of railroad carriers that service a metro.

    Water port access – This category includes total tonnage for all ports located within the confines of the metro area.

    Air cargo access – This category includes the number of air courier companies, as well as the total air cargo tonnage for the metro.

    Due to the rapid advancement of technology such as pervasive or ubiquitous wireless and internet networks, connective product marking technologies like RFID and emerging standards for the use of these defining specific locations using Global Location Number(s), the basic supply chain is rapidly evolving into what is known as a Supply Chain Network.

    All organisations have or can purchase the components to build a supply chain network, it is the collection of physical locations, transportation vehicles and supporting systems through which the products and services are managed and ultimately delivered.

    Investing in a country’s physical infrastructure can contribute to economic growth, improve human welfare and has considerable potential for directly reducing poverty.

    Yet current investment in the poorer developing countries, whether internally or externally sourced, is insufficient to fund infrastructure needs, leaving logistics at unacceptable levels.

    Although the public sector will remain the major provider of infrastructure services in most developing countries for the foreseeable future, an increasing number of those countries are now considering ways of attracting increased private sector investment and Nigeria is not left out here.

    This article will be followed with another crucial one on THE URGENT NEED FOR A NATIONAL LOGISTICS POLICY.

     

    • Dr Madu can be reached on ceo@multimix-academy.com

     

  • Dangote Industries strengthens relationship with CNN International

    Dangote Industries strengthens relationship with CNN International

    Amajor Africa’s largest business conglomerates, Dangote Industries Limited, is deepening its relationship with CNN International by renewing on-air and digital sponsorship of the prestigious ‘Facetime’ segment within CNN Marketplace Africa.

    CNN Marketplace Africa is a weekly show on CNN International which offers a unique window into African business. The new edition of the show is hosted by British-Nigerian CNN anchor Zain Asher, who breaks down the economic trends affecting Africa, interviewing business leaders making and shaping the continent.

    The ‘Facetime’ element within the programme is a high-profile segment in which a major player from the global business community is interviewed about Africa business matters. On-air content is complemented by distinctive online editorial at a ‘CNN Marketplace Africa’ microsite, where popular and innovative content is shared across a range of social channels.

    Since taking over as full-time host in May this year, Zain Asher has interviewed esteemed ‘Facetime’ guests including: Patrice Motsepe, founder and Executive Chairman, African Rainbow Minerals; Russell Stokes, CEO, GE Transportation; Kofi Anan, former UN Secretary General; Taleb Rifai, Secretary General, UNWTO and Maria Ramos, CEO, Barclays Africa.

    In addition, Dangote Industries Limited is sponsoring a new segment, ‘Africa Now’, to air within ‘The Business View’.

    Dangote Industries Limited’s sponsorship of ‘Africa Now’ is aimed at raising the profile of the business across the continent and outside of Africa among CNN’s unrivalled affluent audience. The campaign spans TV sponsorship, spot advertising and digital components.

    Africa Now examining how business in Africa has an impact beyond the continent, will air as part of CNN’s dedicated month focusing on Africa, a series of special features and programmes about Africa throughout October.

    It started early this month and airing each subsequent Monday throughout the month, Africa Now will cover topics such as: innovation, workforce trends, education and economics, with a particular emphasis on empowering Africa; growth and development on the continent.

    Speaking on the development, Antonio Canto, Vice President, Advertising Sales, EMEA, CNN International said: “This is an ideal time for Dangote Industries to consolidate its presence on CNN through the renewal of Facetime on CNN Marketplace Africa and the launch of   Africa Now. At a time when there is a thirst for content on Africa, the sponsorships reflect Dangote’s role in promoting pan African business and its corporate social responsibility activity through the Dangote Foundation.”

  • Integrated corporate governance as millennium model of leadership

    Integrated corporate governance as millennium model of leadership

    Profiling Corporate Governance

    Corporate Governance is a Leadership/Management course that is less about two decades old. Its modules are informed initially from three sources: Law, Economics and Organizational Theory. It is a neo-modernist instrument used principally by decision-makers.

    Decision-Making in the 21st century is made complex among other things by the ICT revolution in its mode, modem and media of information generation and transaction and delivery. These have the effect of multiplying the drivers of the market economy, and increase its operational variables. Also, decision-making process becomes more cumbersome due to obligations of ethics, profession, faith, government, or other relationships, thereby bringing the human mind under intense pressure and thus increasing the valence of error. How can these be contained, or in fact turned around?

    Lately, research by renowned neuro-scientist, Adele Diamond (UBC, Vancouver) provided decision-makers with 21st century tactics for coping with all the above. This proves that apprehension, comprehension and dissemination of information for interaction, transaction or reprocess have entered a new mode in the new millennium, but how much of these are being mainstreamed for the accompanying mass market? Or articulated by the relevant institution, the academia, to help mankind not only in theory but in real time?

    Beyond the much-touted “core” concepts of Corporate Governance (as dealt with in the 2009 CU-FISL International Conference) and which have now thrown up our latest enquiry into the subject, the latter comprises two areas: the “grey areas” (Ethics) and now the “millennial/exponential dimension” that introduced innovation. For the future promises of research these are found in NEUROSCIENCES, MINDFULNESS, MONTESSORI, et al.

     

    Contemporary Study

    It is noteworthy however that concerned institutions of the world have lately turned their attention to seriously consider Corporate Governance, often by tentative other names. The HARVARD BUSINESS REVIEW (HBR) in its February, 2012 edition, vide a template of posers had sought a make-over for capitalism, titled The Capitalism Challenge. The intro of that subject is further sub-titled (as QUERY, RESPONSE and URGENCY) below:

    HBR/McKinsey (M-Prize for Innovation: THE CAPITALISM CHALLENGE

    QUERY: “Capitalism might be the greatest engine of prosperity and progress ever devised, but in recent years, individuals and communities have grown increasingly disgruntled with the implicit contract that governs the rights and responsibilities of business. The global economy and the Internet have heightened our sense of interconnectedness and sharpened our awareness that when a business focuses only on enriching investors, it implies that managers view the interests of customers, employees, communities and the fate of the planet as little more than cost trade-offs in a quarter-by-quarter game.

    RESPONSE: “It’s time to radically revise the deeply-etched beliefs about what business is for, whose interests it serves, and how it creates value. We need a new form of capitalism for the 21st century, one dedicated to the promotion of greater well-being rather than the single-minded pursuit of growth and profits; one that doesn’t sacrifice the future for the near term; one with an appropriate regard for every stakeholder; and one that holds leaders accountable for all of the consequences of their actions.In other words, we need a capitalism that is profoundly principled, fundamentally patient, and socially accountable.

    URGENCY: “This isn’t a new challenge, but it’s more urgent than ever, not just as an effort to escape reform and regulation from the outside, but to restore the public trust, to repair the moral fabric of the system, and to unleash the innovation required to tackle the world’s most pressing and important challenges.”

    (-The HARVARD BUSINESS REVIEW, February, 2012)

    Deconstructing the above simply breaks up into: INTEGRATION; CORPORATE GOVERNANCE; MILLENNIUM; APPROACH and LEADERSHIP.

    Expatiating, “Integration” means reassembly into one functional or organic whole; “Corporate Governance” is simply the acceptable morality of the marketplace to which every participant in a society is subscribed; “Millennium” is that out-large phenomenon of Time that arrived on every citizen of the globe since year 2000 heralding many factors of Change to which we have all been struggling to accede or subdue for control or at least manage for our own good; “Approach” is simply methodology or system of arranging our strategies and response to all these challenges with responsibility; while “Leadership” is acting that responsibility to the joy of all, that is man and God.

    In every human society, above is what a responsible daily activity tries to achieve variously through the sectors of Education, Business, Governance, Hospitality, Faith, Sports, et al. How can they be brought altogether in one comprehensible whole…. avoiding the confusions enumerated by HBS above?

    That “lacuna” is the template of our enquiry, a foil. The solution will fill it.

    “MANAGERIALISM” HERALDING CORPORATE GOVERNANCE

    On the verge of the great depression (cross-over from late 19th century) Berle and Means gave account of economic development in the US in the early 20th century, which tended to breed a powerful class of professional managers in whose hands were concentrated unprecedented economic power that were insulated from pressure of both stockholders and the larger public. In their postulation the warnings of Berle and Means even inferred that certain tenets of the democratic foundation were under threat of eventual eclipse by this new phenomenon, and this invariably triggered a trail of intellectual inquiry.

    MOTIVE

    By “distrust” or loss of trust, Harvard in the excerpt above is querying, what is truly in the heart of (a) man? Motive is crucial to business and ethics. Therefore compliance to business conduct no matter what is specified cannot be enforced on a rule and regardless of the myriad of legislations available. A Z. Mizruchi (University of Michigan, 1976) rightly discovered in his critique of the originating suspicions of Berle and Means about the notion of “Power and Control” (Managerialism) that there are various strands of consciousness emanating from the same phenomenon that makes it virtually impossible for any school of thought, his own among the others, the sociologists school, to categorically pitch their tent with the hypothesis of Berle and Means. Without a much better idea however they had to tamely agree in the end that this new system (Managerialism, precursor to Corporate Governance) was kind of a further extension of democracy.

     

    Research, Analysis and Results

    The second half of the 20th century however was rife with novel Management ideas especially of the humanist school, a trend that gave vent to such amusing behavioral descriptions as “peoples’ capitalism”, “soulful corporation”, etc. One common factor among them was the issue of Motive which was controversialised. What would be my motivation for taking a job for instance before I find myself(re)acting in a particular way? Many studies were conducted which queried severally the basis of motivation. At the end motivational impulse was variously thought to no longer be an outright economic factor. Values could mutate, and satisfaction become derivative. Upon this result however there are two different things to test for: (i) the research question which is Motivation and (ii) the Methodology of measure. The latter is perhaps more pertinent to the SCIENCE of Corporate Governance while Motivation deals with the curriculum that makes it up. Both will add up for Delivery.

    Methodologically speaking what these series of tests and result meant was that the linear-onlymentality of deductions till that point was failing and could lead the train of discourse astray. Reliability was gone. In fact beginning from this premise the imagination of the thinkers dilated wild, some adducing that entrepreneurial motivation were no longer strictly profit-driven. This was beginning to hit at many ultra-classical economic views, but the question then was could they sustain this tempo?  Sociologists, in one of their splinter schools chose to arm themselves rather with extant theories of class and social stratification, relying on Max Webber or Karl Marx. For instance  Blau and Duncan’s view  on  Class: “defined in terms of economic resources and interest… is no longer adequate for differentiating…(those) sic in control of the large capitalistic enterprises from those subject to their control, because the controlling managers of the largest firms today (mid-20th century) are themselves employees of corporations”.

    In other words a mentality emanates from this “employee” status and there is a pattern in which its implications can multiply in the operational structure in such a way that they manifest unaligned variables. After all the on-board structure which some professional managers have to present even in the face of the 2009 economic disaster is all that the world  actually expects, not the conundrums of uninvestigated moral (or more correctly, amoral) biases that led to their decision making.

     

    Verdict

    Thus came the qualitative round-off to the multitude of tests and data applied to measure and then to draw inferences from those study and comparisons done on the relations of power within corporations and their implications on democratic development, in the second half of the 20th century; conclusion today being that the airspace have become far expanded and the options made available are multiplied so greatly as to completely overwhelm the streamline of ordinal mentalities in its mode and measures. The demise here of ‘one- subject approach’ to research problems was already hinting at the beginning of many factors that would later crystallize as corporate governance.

    The inference here is that Corporate Governance as a discipline does not only bring together relationship among human reactants in the workplace, it also atomizes the failure of the institutions that were designed to regulate or control them. Corporate Governance also measures progress not only against expectations (or deliverables) but often against certain hidden keys that may bubble up time and again to surprise the enterprise. In this wise it means that even in the academia the velvet garbs that were once draped around the one-subject approach to problem-shooting are newly found inadequate to deal with the infinite variety of choices inherent in our time and need.

    Sociologists had thought to claim their space as the discipline that was found closest to behaviourism, perhaps, but being unable to prove it (by figures and numbers) had them hitting at the blank wall inadvertently. Corporate Governance as a discipline does now make offer of a new framework for the operationalization of measured reality, as may be found for instance in the mission statement or vision statement of an organization. How each one arrives at this statement though is yet a different issue.

    However the discipline of Corporate Governance is not a benevolent hydra-headed monster, only that it has its own ethical compliance framework against which the success of an organization can be measured, just as the honourable enterprise of academics does too. They are both systems, except that in the CG system output is more than the sum of the input integers, and the system may perform without necessarily subjecting self to the internal equilibrium of that entity (recall the introduction of SPVs); there are always “grey” areas to consider. And right now the latest risqué factor has been this “exponential” dimension of the new millennium. So, whether it is Ownership or Control or whatever any other issues that may be broached all are just but mere patterns of behavior among the interacting units, all sunk in an environment which is bound to throw up certain variables in the end that they themselves cannot completely appropriate.

     

    • 08037250343

    greenhavenfoundation@gmail.com

     

  • Reinforcing your CV with a persuasive cover letter

    Reinforcing your CV with a persuasive cover letter

    Beyond packaging a great curriculum vitae (CV), you also need the reinforcement of a persuasive cover or application letter to boost your chances of being invited for a job interview. A cover letter, variedly called letter of application, letter of introduction, transmittal letter and broadcast letter is a letter that no wise job-seeker should send his or her CV without.

    A cover letter is an important job search tool. Its purpose is to attract attention to you and prove your suitability for a job. The cover letter is also where you state why you are interested in the job or the company. Findings show that only few employers seriously consider a CV that is not accompanied by a cover letter; thus, a dynamically persuasive cover letter needs to be part of your job-search strategy.

     

    ICT-induced competition

    It is a known fact that the world is now a global village occasioned by the Information and Communications Technology (ICT) explosion. The implication of the ICT explosion is that there is now increased competition in business, job-search, etc., as more awareness is created. Also, as opposed to what obtained in those days in Nigeria when jobs were waiting for applicants, applicants now go through a rigorous process to get jobs.

    The import of this is that the era of packaging a chronological CV or writing a passive and informative cover or application letter is gone and you now need the creativity of persuasive communication to write your letter and stand out from the crowd. Even business people need to write a persuasive proposal to stand out and win business.

    I deployed this skill to write proposals to MTN and Union Bank in 2011 and the corporate communications managers then were so impressed that they called and commended me.

     

    Persuasion

    If we now need persuasive communication in job search and business transactions, what then is persuasion? Persuasion can be variedly defined. At one level of definition, it is conceived as the process by which a communicator tries to influence the attitudes, values, belief system or action of his or her listener(s) or audience.

    Simply put, it is about convincing people. It is noteworthy that the beginning of successful persuasion is to build trust and credibility so that you can be accorded attention by your audience or recipient(s). That is, you need to quickly include information about them to show you have knowledge of their operations.

    As an applicant, for example, you need to quickly show some knowledge about the company you are applying to by including something like, “It is impressive that since you started operation in Nigeria on 15th May, 1990….”; “It is commendable that you made a profit after tax of N- million in your last financial year….”, etc.

    Another thing you do in persuasion is to concentrate on issues that are important to your audience. For instance, focus on how you will contribute to the productivity and profitability of the organisation not on benefits you hope to get upon employment.

    Note: We will X-ray components of a persuasive cover letter later in this discourse.

     

    Benefits

    A cover letter is so important because a CV is useless to an employer if he or she does not know the kind of job you are seeking, especially if you do not have a (combined chronological) functional CV that shows the kind of job you like in the objective section. A persuasive cover letter tells the prospective employer the type of position you are seeking and how you are qualified for that position.

    It highlights the aspects of your experience that are most useful to the prospective employer, and you can earn points for knowing what those aspects are. There is no disputing the fact that prospective employers receive a lot of CVs, especially when they advertise a (vacant) position. These employers are also very busy.

    Often the person screening CVs skims through each for just a few seconds. Your cover letter can draw attention to the skills, talents and experience the prospective employer is looking for. Your letter can explain things that your CV cannot. If you have large gaps in your employment history or you are re-entering the job market or changing the focus of your career, a cover letter can explain these circumstances in a positive way.

     

    Comparison of function

    A cover letter can serve the same function as the Objective part of your CV, and expatiate on it. Some applicants are reluctant to “limit” themselves by putting an Objective in their CV. It is better for a job-seeker to target the type of job being specifically looked for and  you may be open to more than one option. As I said during the CV discourse, you can have different CVs targeting different jobs.

     

    You can simply have your CV on the computer and just adapt it to fit the requirements of each job you are applying for. Note that your CV is not a record of your life history that is already fixed, so you can adapt it (CV) as you like. A cover letter is a little window into your personality. A well-composed cover letter can suggest to a prospective employer that you are just the right type of dynamic person the company is looking for.

     

    Cover letter contents

    A typical cover letter contains address(es), salutation, etc.

     

    Addresses: You will write two addresses. That is, your personal address and that of the recipient.

     

    Salutation: Here, guard against the error that may manifest as a result of jumping into conclusion about the recipient’s sex based on the name. Try to confirm the sex of whoever you are asked to direct your letter to in the advert, especially if you are only given the designation. However, experts suggest that in the event of not being able to confirm the sex, or get the real name of the recipient, use Dear Sir/Madam. If it is a female real name that is involved and you are not sure of the marital status, use Dear Ms. You can also use Dear Madam for the unknown female recipient.

    You will also include the heading or title, introduction, body containing paragraphs as well as the conclusion. We will continue with this discourse next week.

     

    PS: For those making inquiries about our Public Speaking, Business Presentation and Professional Writing Skills programme, please visit the website indicated here for details.

     

    GOKE ILESANMI, Managing Consultant/CEO of Gokmar Communication Consulting, is an International Platinum Columnist, Professional Public Speaker/MC, Communication Specialist, Motivational Speaker and Career Management Coach. He is also a Book Reviewer, Biographer and Editorial Consultant.

     Tel: 08055068773; 08187499425

    Email: gokeiles2010@gmail.com

    Website: www.gokeilesanmi.com