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Tag: Economic crisis

  • How to address economic crisis, by expert

    How to address economic crisis, by expert

    Former Managing Director of Citizens International Bank and Assurance Bank of Nigeria, Chikatara Mbonu has proffered solution to the nation’s economic instability.

    He lamented that duplicated policies, inconsistent reforms and unstable national development plan are some of the factors responsible for nation’s economic instability.

    Speaking in Ibadan while delivering a lecture titled “Blueprint of Progress: What Nigeria Can Learn from Global Systems and Leadership”, Mbonu maintained that stability will remained elusive until the nation begin to respect continuity, same way engineers respect load calculation.

    The lecture was part of the activities lined up for the 10th Rev. Engr. Ette I. I. Etteh Annual Distinguished Lecture Series and the book launch of “Christ the Greatest Connector” written by Rev. Engr. Ette Ikpong Ikpong Etteh.

    The lecture was organised in collaboration with Nigerian Institution of Civil Engineers(NICE), a division of Nigerian Society of Engineers.

    Mbonu stated that a culture of man‑know‑man and the belief that government resources are national cake will continue to be major obstacles to Nigeria’s growth and development.

    He said: “Nations like Singapore, China and the United Arab Emirates that have succeeded did not do so accidentally. They moved from wishful thinking to master planning, from guesswork to calculation, from hoping to knowing. Countries such as Singapore, Malaysia, South Korea and Rwanda were deliberate. 

    “They agreed on long‑term goals, national discipline, continuity of plans, merit‑driven leadership and institutional strength over strong personalities. Unfortunately, Nigeria often changes its entire national direction the moment a new government comes in, leading to new agendas, priorities, slogans, and eventually the same old problems.”

    He described Nigeria as a country with massive natural resources, but poor national values, weak institutions, low accountability and contradictory policies.

    Mbonu suggested that Nigeria should adopt the ideas of Singapore and Rwanda, whereby ethics, discipline and civic duty are embedded in the curriculum from primary to tertiary level so that children would learn punctuality, honesty, basic financial literacy, community respect and a maintenance culture. 

    He added that development remains impossible when criminals walk free, noting that the government must ensure transparent judicial processes with zero interference in court decisions and efficient, automated court systems.

     “Every public officer should have a public dashboard showing asset declarations, project performance, disciplinary records and reward systems. 

    “Nigeria needs a curriculum overhaul, more technical and vocational schools in every state, and routine teacher‑retraining programmes. We also need to promote digital literacy as a core subject in every school.

    “Infrastructure provides the economic backbone. We must do more in constructing a national rail spine that connects all geopolitical zones, ensure regular power supply to industrial corridors, and expand gas‑to‑power projects, among others.”

    Mbonu said Nigeria has become a rapidly growing city that calls for “future‑proof city planning, adding that urban plans must target 2050 population realities, mass‑transit systems, flood‑control measures, robust internet infrastructure and mixed‑use, climate‑resilient zoning.

     “By 2035, Nigeria will have the world’s third‑largest youth population. We must build capacity around skills, employability, self‑employment, digital jobs and manufacturing jobs, because a nation that fails to prepare for the future becomes a risk to itself.”

    Chairman of the occasion, Engr. Yusuf Sagaya described Rev. Engr. Ette Ikpong Ikpong Etteh, co‑founder of one of Nigeria’s foremost indigenous consulting engineering firms, Etteh Aro & Partners, as the father of many successful engineers both locally and abroad. 

    Sagaya, a seasoned Engineer, Consultant, and Fellows of Nigerian Society of Engineers(NSE) said that the celebrant in conjunction with his friend Lawrence Arokodare, has built a global standard of engineering practice in Nigeria.

     “There are no projects leaving Etteh Aro & Partners without being properly checked by at least two senior engineers. One engineer must cross‑check another, and approval must come from a senior engineer. 

    “We are having problems in the consulting industry today because many designs are not being checked or approved by competent senior engineers. If all concerned engineers return to the professional guidelines and ethical standards adopted by Etteh Aro & Partners, Nigeria would not be in its current position regarding our professional output.”

    The celebrator expressed gratitude to the association, UI community, well-wishers, and all who had worked tirelessly to make the event a reality.

  • States bluffing their way through crises

    States bluffing their way through crises

    Just like Nigeria is trying to bluff its way through global economic crisis, most of Nigeria’s 36 states are also trying to bluff their way through the 1999 constitution, with the local government elections and revenue allocations constituting the triggers. Decades of destroying the nation’s industrial base and flinging doors open to all manner of imported goods, thus putting enormous pressure on foreign earnings, have pushed the country into a cauldron of rage, discontent and even rebellion. Submission to poor corporate governance culture, gross indiscipline, expensive taste for imports, and a sense of entitlement spawned by excessive reliance on oil exports have sadly not led the country to find remedies but to all manner of efforts to bluff the way through the ongoing global economic crisis. So far, the bluff has not worked.

    It is in the midst of Nigeria’s existential crisis that the states have also adopted the policy of bluffing their way through the Supreme Court judgement on local government financial autonomy. Miffed by how the federal government dragged them to the Court due to decades of fiddling with federal allocations to local governments, and deeply angered by how easily they lost the case, states have decided to take the battle to the feds. A little over a week ago, some 16 of them jointly took issue with three or so mainly anti-graft federal institutions, insisting that their enabling laws were constitutionally defective and based on inappropriate conventions. The states give the impression that the said agencies, to wit, the Economic and Financial Crimes Commission (EFCC), Independent Corrupt Practices and other Related Offences Commission (ICPC), and Nigerian Financial Intelligence Unit (NFIU) have become a harassment tool in the hands of the federal administration. They want the Supreme Court to declare the three agencies illegal.

    The battle between the three tiers of government is now fully joined, and the gloves are off. On the one hand are the feds and the councils which want federal allocations to local governments paid directly to the local government; and on the other hand are the infuriated states who insist that the autonomy indirectly granted the councils will create needless friction in the states as well as promote insubordination. A few states have thus begun to enact laws to return the councils to full state control, thus subverting the recent Supreme Court judgement. Those who are not directly re-enslaving the councils have developed political strategies to return the councils to status quo as loyal and obedient servants. The battles ahead – for there will be many before the smoke clears – will no doubt enthrall blood sport enthusiasts.

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    Fighting on one front does not, however, appeal to the states. They are determined to open many fronts until they overwhelm the feds. In an apparent attempt to obey the court judgement circumscribing their powers over the councils’ finances, the states have unleashed a procession of local government elections to grudgingly satisfy public expectations. They know they can’t defy Abuja as Lagos did when President Bola Tinubu was governor. Under his governorship, he creatively engineered the states’ finances to cope with the federal siege which played out in withheld federal allocations to the 20 local government areas. The state and LGs did not go broke. Today, states are struggling to breathe financially and will thus be less inclined to any kind of constitutional adventurism. So, they have devised a better way of circumventing the court judgement. They will have the elections, but it will be on their own terms, with only loyalists and the state’s ruling party victorious. The states are determined to have the last laugh. They snicker at the Supreme Court, knowing it will be unable to determine how the ‘meddlesome’ feds can guarantee the integrity of the council polls.

    Will the states’ counterattack work? It is hard to predict. What is clear is that they won’t let go of the LGs easily. They have been compelled into burdensome council elections so that council allocations would not be withheld, but they are feverishly designing political weapons of their own to wipe the smile off the face of the feds. Going forward, they will keep throwing punches, and fighting tooth and nail to keep their snouts locked on the council’s trough. They have the staying power, the number, and the artifices. If they can hold on until the next elections, they think the feds will sue for some kind of peace. While it may not be clear that the states will win outright, it is nearly certain that they will compromise the potency of the Supreme Court judgement by weakening it as well as leaving legal and constitutional purists exasperated or deflated. The states may be bluffing their way through the constitution, and riding roughshod over the local governments, but everyone knows that the federation can hardly be the better for the ridicule of its constitution.

  • Five key ways to survive during economic crisis

    Five key ways to survive during economic crisis

    The high cost of living has plunged Nigeria into an economic crisis. However, the prospect of something expensive and beyond your control happening becomes less threatening if you’re properly prepared.

    Here are the five steps for how to deal with an economic crisis:

    1. Prepare to minimise your monthly bills

    You might not have to do it now but be ready to start cutting out anything that is not a necessity. If you can get your recurring monthly expenses as low as they can be, you’ll have less difficulty paying your bills when money is tight.

    2. Make a budgetIf you don’t know exactly how much money you have coming in and going out each month, you won’t know how much money you need for your emergency fund. And if you aren’t keeping a budget, you also have no idea whether you’re currently living below your means or overextending yourself. A budget is not a parent—it can’t and won’t force you to change your behavior—but it is a useful tool that can help you decide if you’re happy with where your money is going and where you stand financially.

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    3. Look for ways to earn extra  cash
    Everyone has something they can do to earn extra money, whether it’s selling possessions you no longer use (either online or in a garage sale), babysitting, chasing credit card and bank account opening bonuses, freelancing, or getting a second job. The money you earn from these activities may seem insignificant compared to what you earn at your primary job, but even small amounts can add up to something meaningful over time. Besides, many of these activities have side benefits: You might end up with a less cluttered house or discover that you enjoy your side job enough to make it your career. Now’s the time to prepare for the worst and hope for the best.

    4. Live within your means
    If you make it a habit to live within your means each and every day during the good times, you are less likely to go into debt when gas or food prices go up and more likely to adjust your spending in other areas to compensate. 

    5. Invest for the long term
    So what if a drop in the market brings your investments down 15%? If you don’t sell, you won’t lose anything. The market is cyclical, and in the long run, you’ll have plenty of opportunities to sell high. In fact, if you buy when the market’s down, you might thank yourself later.

  • Nigeria facing worst economic crisis in history, says Sen. Abdullahi

    Nigeria facing worst economic crisis in history, says Sen. Abdullahi

    The chairman of the Senate Committee on National Planning and Economic Affairs, Senator Yahaya Abdullahi, said on Wednesday, November 22, that Nigeria was facing the worst economic crisis in the history of its existence.

    Senator Yahaya, who spoke at the inaugural meeting of the House Committee on National Planning, said there was a need for the National Assembly, represented by the two committees to sit with the executive arm of government to work out ways of getting the economy back on track again.

    He said the committees of national planning in both the House and the Senate should ensure that they work hand and hand in the next four years to achieve the set target of turning around the nation’s economy while advising the executive on the way forward.

    He warned against any mistake on the part of the parliament that may compound the already precarious economic situation in the country, adding that the parliament must be able to guide the executive on how to get out of the quagmire.

    Senator Abdullahi said further that both committees will soon convene a joint meeting of both committees to enable them to discuss their agenda of working together in the overall interest of the country.

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    Also speaking, the chairman of the House Committee on National Planning, Hon Ibrahim Ayokunle Isiaka, said the committees can only succeed in their assignment if they work together and reinforce one another as a team.

    He drew attention to the fact that National planning involves the process of setting goals, developing strategies, and outlining tasks and schedules to accomplish the national goals.

    He said there was the need to “roll our sleeves and tighten the belts for the tasks ahead in the spirit of nationalism and patriotism, adding that the Committee will join hands with all well-meaning stakeholders to create and bequeath indicators that will be adjudged one of the best in this 10th Assembly.

    He said the committee will embark on Inter-Governmental and Budget Reforms of the multi-faceted and interlinked nature of sustainable development, which calls for interventions to be tackled simultaneously through a coordinated approach for reversing the declining economy, stabilizing the polity and integrating the various societal interests all with a view to enhancing national development.

    He disclosed that currently, there is a mixed reaction among various stakeholders including scholars, the media, and some members of the private sector but, our Committee would do its best to bridge the gaps between the euphoria and skepticism about this concern.

    He said: “For all of us as a committee, the executives and bureaucrats, our Cooperation Framework shall detail not only how we can work together but, we shall work together.”

  • Nigeria’s economic crisis needs bold, persistent strategy – Emefiele

    Nigeria’s economic crisis needs bold, persistent strategy – Emefiele

    The Central Bank of Nigeria (CBN) Governor, Godwin Emefiele Thursday said that despite challenges being faced by the economy, there is need for all economy managers to be bold and persistent in finding lasting solutions to the problems.

    The CBN boss spoke at the 35th quarterly general meeting of the Association of Chief Audit Executives of Banks in Nigeria, held in Lagos.

    Emefiele who spoke on the theme: “Changing Business Environment: The Role of Internal Auditors” said the country was at a crucial point in its financial history as seen in the economy being in recession because of drastic fall in prices of crude oil.

    “The price of oil which is our main source of foreign exchange earnings and government revenue has significantly reduced, and may remain so for a long time. Money is scare for most citizens. Regrettably, because our economy is still largely import-dependent, this fuels the general rise in the prices of goods and services.  Hence, there is a noticeable decline in the purchasing power of the people. Indeed, there are many challenges. But, I also see opportunities,” he said.

    The CBN boss said that if the challenges are well tackled, the current situation can pave the way to future prosperity. “That is why the Federal Government and the CBN is constantly formulating and re-evaluating policies that we believe will set us on the path of greater economic prosperity. Where and when necessary, we must remain bold and persistent, and never afraid to try new ideas, as these are major requirements in a time of change. That is why I am confident that Nigeria will overcome our current challenges. But, I suspect that we can only overcome these challenges if we are ready to make fundamental change in many of our attitudes, orientations and practices,” he said.

    Speaking further, he said change is the categorical imperative of the moment, and applies to the CBN as the nation’s lender of last resort and the banking sector regulator; it applies to Deposit Money Banks (DMB’s) and other financial institutions – as financial entities and fiduciary intermediary agencies; and even, change is required from the public that we all serve.

    “For you as internal auditors, the changes may seem slow or rapid; they may be merely procedural or at times they may be radical. Whatever may be the case, the cumulative effect of change is to alter the business environment in which you serve. As a concomitant, you must also upgrade your capacities, operations and methods. If you do not do that, you will become victims of change. Therefore, you have a choice to either treat this gathering as a mere quarterly routine or treat is as an opportunity to analyze and prepare for the future. Let me explain why I hope you should choose the latter,” he stated.

    Continuing, he urged the auditors o understand that banking industry is built on people and is driven by services and technology. “People and organizations are becoming increasingly sophisticated. Their needs are more diverse and so are the services and the technologies to meet those needs. Indeed, technology is dramatically changing the face and environment of banking. Transactions of high volume and value are consummated with the click of a button”.

    “Similarly, transactions are conducted simultaneously in multiple jurisdictions, across boundaries and time zones. As a result, efficiency has grown exponentially. As a corollary, the risks of doing business are equally high. The possibility that a careless mistake, let alone a fraud, can destabilize an entire institution and have systemic effects on the industry should be of concern to all of us.  This should be more so at a time of economic fragility. That is why you must stay ahead of the curve and be on top of your game,” he said.

    He said internal auditors must be proactive in identifying and addressing new risks or emergent issues in organizational controls and compliance requirements. The auditors, he added, cannot afford the luxury of professional complacency. Nor can they accept the risk of individual capacity atrophy or the consequences of group obsolescence.

    “Banks must maintain good internal control, ethical practice and sound risk management. Nigerians expect this, especially at a time of challenging operating environment.  All banks must be healthy and stress-free, so that they can absorb any unexpected shocks.  Therefore all the necessary measures for capital adequacy and indices of sound risk management must be in place and fully enforced. As internal auditors, you must all be proactive, look out for any factors that could destabilize the system, quickly identify and deal with them. You must pay particular attention to banks and customers operating in risk-prone and highly volatile sectors of the economy,” he said.

    Emefiele also urged the auditors to be vigilant and guard against fraud.  “For the sake of emphasis, I would like to specifically cast your minds to the issues of cyber-security and cyber-crimes. As Internet penetration continues to gather steam in Nigeria, greater volumes of transactions will be consummated online; and on various electronic formats and platforms”.

    “Unfortunately the electronic medium is very attractive to certain class of criminals: those that are dexterous in the use of information technology tools and protocols to perpetrate cybercrimes. This new trend in criminal activity will have an increasing impact on the Nigerian banking environment, especially because for the perpetrators, cyber-crimes can seem relatively low-risk; and if successful, there can be high yields. That is why you must be vigilant. Prevention is better than cure,” he said.

    He explained that the losses due to cybercrimes across all sectors have been estimated globally to hover between $400 to $550 billion in 2015. The figure could rise to $2 trillion by the end of 2019.

  • ‘Economic crisis is opportunity for investors’

    The tough macroeconomic situation in Nigeria provides opportunity for discerning investors with long-term capital to take positions as the government continues implementation of key initiatives aimed at boosting the national economy.

    Minister of Industry, Trade and Investment, Mr. Okey Enelamah, said the economic crisis is too great an opportunity to waste.

    Enelamah, who spoke on ‘Matching Opportunities with patient capital,’ at the yearly investor conference organised by FBN Capital Limited, said Nigerians should see the economy from a positive perspective and deemphasise on the negative side of the recession.

    He noted that the oil price crash exposed the structural deficiency in Nigeria’s large and thriving economy. He said application of practical solutions such as creating the right environment and polices to harness the productivity of Nigerians will enhance the economic recovery noting that the economy remains large and full of potentials.

    The  FBNQuest conference, which is in its sixth year, provides a forum for investors to interact with leaders of the economy, key policy makers in government and senior executives of leading corporate institutions.

     

  • Economic crisis a divine warning, says cleric

    The current economic hardship is orchestrated by God to draw Nigerians to Himself, the founder of Divine Chosen Vine Ministries International, Dr Godwin Chukwudire, has stated.

    The economic crisis, according to him, is because Nigerians have forsaken God and forgotten His ways.

    He spoke with our correspondent last week in Lagos.

    Chukwudire warned that except Nigerians turn to God, 2017 may even be tougher for the nation.

    He said: “God is angry with Nigerians. He said Nigerians are very good but they no longer obey Him.

    “He blessed Nigeria more than all the nations of the world but the leaders have looted everything and the poor are getting poorer.”

     “2017 will be a judgment year, a year of catastrophe. Many things will go wrong especially in Nigeria.

    “We must join hands to pray so that these things don’t happen. The hardship coming up will be so severe that many people will abandon going to church while many pastors will quit preaching the word.”

    He however called on Nigerians to return to God for reversal of the current hardship.

    “God said he can heal the nation if only they turn to him. God is interested in this nation but the leaders must change for good,” Chukwudire stated.

  • Experts seek solutions to Nigeria’s economic crisis

    Experts at an annual seminar organized by Emmanuel College of Seminary in Ibadan seek solutions to the present nation’s economic crisis and how to get out of the wood.

    Speaking at the seminar titled “A nation in profound crisis: strategies for survival and recovery”, an energy economist from University of Ibadan, Professor Akin Iwayemi said there are many things expected to be done to get out of the present economic crisis.

    According to him, things we need to do can be classified into immediate short, medium and long term solutions to find lasting solutions to the present economic crisis.

    He said, “In the immediate short term plan because of the nature of our crisis, there must be social protection programs which required to support the disadvantage in the environment.

    “This include feeding children and providing jobs to young people or graduates. The purpose of short term plan is to properly target those who are really in need and federal government must partner with state government to achieve the feat.”

    The medium term plan, he said is targeted towards growing the economy by diversifying economy to products that can sell abroad with international standard. He said in so doing, there must be intervention funds to entrepreneurs while the fund must be well monitored to avoid failures of the past.

    The University don maintained that the long term should border on how policy and investment environment can encourage investors noting that though the present economic situation is gloomy but things will work well if all can make sacrifice, reduce cost of governance to enhance development.

    Speaking on advantages of science and technology, he said science and technology is used to grow farm to yield high productivity adding that, the century old way of farming will not increase productivity.

    He said, “science and technology is at the heart of green revolution where simple irrigation system is designed to replace rain. He said to achieve this, there should be collaboration between Universities and industries as it is obtained in developed countries.

    He said the collaboration will enhance introduction of innovations from University studies into industries and therefore develop value chain.

    Speaking on choice of the topic for the seminar, the chairman of the mission and outreach committee, Dr. Biodun Sotunmbi said the country is going through serious and severe economic crisis like unemployment, poverty, hunger and people who work but can’t be paid.

    It is on this backdrop, according to him that experts had interactive session to focus on what give rise to the present economic crisis and how to get out of it.

     

  • Economic crisis: Sack fever grips workers

    Economic crisis: Sack fever grips workers

    The falling oil price, dwindling naira and stifling economic policies have triggered job loss in virtually every sector of the economy. TOBA AGBOOLA reports.

    Nigerian workers are in for a  hard time. This is because of massive job loss currently sweeping across different sectors of the economy. The sack gale, triggered by the ripple effects of crashing oil prices in the international market and stifling economic policies has already hit the banking and financial services sector, telecoms, hospitality, oil and gas, universities, media and publishing, manufacturing and civil service, among other sectors.

    For instance, The Nation’s recent check at the Manufacturers Association of Nigeria (MAN) showed that over 500, 000 jobs had been lost in the sector since July 2015. Also, there is panic in the oil industry in Nigeria as oil companies – multinationals and indigenous, are expected to start making open their annual reports soon. Already, those who have declared their 2015 results and forecast for 2016 are said to have reduced their workforce in 2016 work plan.

    Royal Dutch Shell last month said in its report that this year it would sack employees globally, including those in their services in Nigeria. The oil giant specifically said it would cut 10, 000 jobs in an effort to further reduce costs amid a severe slump in oil prices. Similarly, United States multinational energy corporation, Chevron, had stated in October last year that it might cut up to 7, 000 jobs.

    Despite confirming that ExxonMobil Nigeria laid off workers few months ago, the Manager, Public and Government Affairs, Mobil Oil Plc, the downstream arm of the multinational oil firm, Mr. Akin Fatunke, said: “The same thing is most likely going to happen. As I speak with you, about 104 workers had been laid off in the upstream. I won’t use the word sack, as they are smiling and very happy because they were paid handsomely and they are still our friends.” He said this in a chat with newsmen at an energy workshop in Lagos.

    The President, National Union of Civil Engineering Construction, Furniture and Wood Workers (NUCECFWW), Mr. Amechi Asugwuni, described the level of job losses in the industry as worrisome. He said since July 2015, close to 70, 000 workers had been laid off by construction companies, and there was nothing to give hope for any reprieve in 2016. He said more workers are expected to be laid off this year.

    The Fast Moving Consumable Goods sector (FMCG) is not spared either. Workers in the sector, which have been left vulnerable following crisis in the exchange rate of the naira, are jittery over possible lay-offs. This is because most FCMG manufacturers rely more on imported materials in order to meet their production and this will have serious effects on their businesses.

    An analyst at Meristem Securities Limited, Mr. Saheed Bashir, who spoke on the current situation said: “We imagine that most of these firms will struggle to survive daunting pressure on costs occasioned by the naira volatility and the pass-through impact of naira depreciation.

    “Brewers and flour millers in Africa’s largest economy import more than 50 per cent of their raw materials and other inputs. Even other household and personal product firms such as Nestle, PZ, Unilever and Cadbury, which had diversified and gone into sourcing local raw materials, are not exempted from the impact of the falling naira.” .

    The situation is not better in the banking sector where some workers were laid off late last year. More are still expected to go this year. Already, some of the banks are said to have started outsourcing a number of job functions to other companies in order to save cost.

    Thousands of workers employed by hotels and tourism firms across the country may also lose their jobs following the worsening economic downturn caused by the foreign exchange crisis and sharp rise in the cost of power generation.

    With hundreds of thousands of workers in the hotel and tourism business, the hospitality sector is one of the highest employers of labour in Nigeria. However, the Managing Director/Chief Executive Officer, Blueseasons Hotels & Suites Limited, Mr. Michael Anyanwu, said most of these jobs now hang in the balance.

    Anyanwu, who spoke to newsmen in Lagos,  noted that the huge amount of money spent on diesel and private power generation could be saved to sustain the workforce if government acts fast to solve the electricity crisis.

    He said: “Scarcity of dollars has impacted negatively on the industry. Foreigners can’t come and do businesses in the country as a result of dollar scarcity as they are not sure of capital/dividends repatriation. Also, the exchange rate of the dollar to the naira is not favourable to importers anymore.”

    Anyanwu further explained that since his hotel, located in Aguda Surulere area of Lagos, opened for business this year, he has been running on private power generators at an average cost of N850,000 per month excluding maintenance. He expressed regrets that despite the huge cost he incurs on generating power, he still pays huge amount of money for grid electricity monthly even as power supply has dropped sharply in the area.

    He expressed fears that if the electricity tariff increase is implemented, the huge additional cost would bring more burden on operators in the industry, which requires 24-hour power supply.

    Anyanwu urged government to work hard to encourage exports to improve its dollar earnings and grow foreign reserves. He stressed that as foreign reserves grow, naira value will appreciate against the dollar and other foreign currencies. “Government has a lot to do to improve the economy. One of the things government must do to strengthen the naira is to explore non-oil revenue.

    “Government should begin to tap solid minerals deposits to earn more revenue. It is anticipated that government can earn additional $20 billion yearly from mining, which will help to improve our dwindling external reserves.”

    The hotelier also wants government to relax some of its monetary policies on foreign exchange management. According to him, most of the things Nigerians consume are imported.

    “Part of our predicament is that we are an import dependent nation; we cannot afford to shut down our import windows overnight. In fact, our government should begin to realise that to a reasonable extent there is nothing like backward integration,” he added.

    The President of the Federation of Construction Industry (FOCI), Mr. Solomon Ogunbusola, said the industry was at a crossroad because various construction firms were owed over N600 billion for projects already executed. According to him, this development led to massive lay-off of workers because the construction companies have stopped work.

    Ogunbusola added that more workers in the construction industry may lose their jobs. The Director-General, Lagos Chamber of Commerce and Industry (LCCI), Mr Muda Yusuf, confirmed this when he predicted that industries and companies will further downsize due to current economic crisis occasioned by undulating oil price and the persistent weakness of the naira against the dollar.

    While noting that this has become a serious problem to the economy, Yusuf said unless urgent steps were taken to provide new jobs, the nation’s unemployment rate may accentuate this year. He said unemployment remained one of the greatest problems of the country, warning that it could worsen if the growing trend is unchecked.

    The LCCI chief pointed out that the recent trend shows a gradual increase in joblessness, urging the present administration to rev up programmes and policies capable of providing new jobs to graduates. He said if this is not done, the rate of unemployment and crime would go up.

    Yusuf also said the restriction placed on 41 intermediate items by the Central Bank of Nigeria (CBN) could lead to high unemployment and corruption. According to him, some of the items were critical inputs to many manufacturing firms, as well as other sectors of the economy. He said placing such restrictions on those items will promote job loss and corruption.

    “The issue is that there is a list of 41 items excluded from access to Foreign Exchange (forex). Many of the products on the list of the 41 products are intermediate goods, which are critical inputs for many manufacturing firms, as well as other critical sectors of the economy. The exclusion has led to job losses as many factories could not access foreign exchange to import their raw materials,” he stated.

    Yusuf pointed out  that the exclusion was because the list is prone to multiple definitions and discretionary interpretations by agencies and institutions responsible for implementation. He added that there is need to adjust the exchange rate close to the equilibrium for liquidity and stability to return to the market.

    Nigeria Employers’ Consultative Association (NECA), Director General Mr. Segun Oshinowo said more workers will be laid off this year if government agencies continue to impose high taxes and fines on entrepreneurs. He said entrepreneurs are forced to sack workers because they operated in a difficult environment and they were striving to keep their businesses going.

    Oshinowo added that other impediments like costs of borrowing, poor infrastructure, absence of reliable power supply and multiple taxation were huge burden on employers. According to him, Nigerians should prepare for the worse because of the continuous fall in the price of oil and the naira. He said this is a sacrifice every Nigerian must make.

    However, the situation has not gone down well with organised labour. Labour has continued to agitate and warn that it would resist any large scale job cuts by Federal and state governments, as well as private sector employers.

    While expressing concern over the impending global sack in Chevron and Shell,  labour unions in the oil industry have called on the Federal Government to stop companies from extending the planned sack to Nigeria.

    The workers under their umbrella union, Nigeria Union of Petroleum and Natural Gas Workers (NUPENG) described the planned sack as alarming. In a statement recently by its President, Igwe Achese, NUPENG warned that it may be forced to embark on industrial action if the Federal Government fails to stop the companies from sending oil workers to the unemployment market.

    The Acting Secretary-General, Petroleum and Natural Gas Senior Staff Association (PENGASSAN), Mr. Lumumba Okugbawa, also warned that it would resist a further sack of its members in the Nigerian National Petroleum Corporation (NNPC).

    Okugbawa said although the association believed in reforming the oil and gas sector, it was averse to any reforms that would jeopardise the welfare of its members.

    He said the restructuring, which has heightened tension in workplaces and the labour market, would be resisted if it negatively affects the association’s members.

    According to him, the planned sack was not in tandem with the “change” that the government promised Nigerians, especially in the area of job creation. He said the plan to sack half of the current NNPC employees would further compound the unemployment situation in the country.

  • FG set to change tax regime, says Osinbajo

    FG set to change tax regime, says Osinbajo

    The federal government  plans to tinker with the tax regime as part of efforts to deal with the financial crisis brought on by falling oil prices, Vice President Yemi Osinbajo, has stated.

    The sharp drop in crude revenues, which provide 95 percent of foreign earnings, has led to the naira hitting record lows on the parallel market as foreign exchange reserves dwindle.

    Crude oil is Nigeria’s number one revenue earner.

    Crude prices have fallen in the last few days to their lowest levels since 2003 at just over $27 a barrel, although they staged a rebound on Friday.

    The 2016 budget assumes an oil price of $38 per barrel.

    Finance Minister Kemi Adeosun has said Nigeria plans to borrow up to $5 billion from multiple sources, including the Eurobond market, to plug its budget deficit and Osinbajo said changes to taxation were also being considered.

    “We are looking at increasing our tax coverage,” Osinbajo, who is attending the World Economic Forum in Davos, Switzerland, told CNBC in a television interview.

    “VAT, for instance — we have been doing just about 20 percent coverage. We think that just by increasing coverage we could do much more and so we could earn more in terms of local resources,” he said.

    Increasing value-added tax from 5 percent, among the world’s lowest VAT rates and broadening the tax base were among suggestions put forward by International Monetary Fund (IMF), head Christine Lagarde, during a visit to Nigeria this month.

    During her visit, Lagarde also said the IMF did not support foreign exchange restrictions.

    The Central Bank, whose monetary policy committee will meet tomorrow  and Tuesday, imposed FX restrictions last year aimed at conserving foreign exchange reserves and there have been calls from investors for these to be eased.

    “We know that the Central Bank will just have to do the right thing at this time,” said Osinbajo.

    “The Central Bank has told us and it was announced even in the President’s budget speech, that they intend to take a flexible approach and deploy whatever tools are necessary to ensure that we stay competitive.”

    The naira, which has been hit by the foreign exchange scarcity, fell to a record low of N305 to a dollar on the parallel market last week, compared with the official rate of N197.

    The slump has prompted speculation that a formal devaluation of the currency may be imminent.