The Nation Newspaper

Tag: economic

  • Yahaya Abdullahi wants new economic planning parameters

    As members of the National Assembly continue their debate on the general principles of the 2016 national budget, Senator (Dr.) Yahaya A. Abdullahi, has cautioned against the continued tying of the Nigerian economy to the country’s volatile oil industry.

    Senator Abdullahi, who represents Kebbi North  in Kebbi State, said this in a statement last Wednesday in Abuja, observing that a closer analysis of the fundamentals of the economy would  show that the petroleum industry is not as overly strategic to our national development as past governments made it to appear.

    In his words: ”That sector of our economy actually offers less employment to Nigerians and contributes between 14% and 15% to the nation’s GDP.”

    Dr. Abdullahi, in the statement which was signed by his legislative aide, Bilyaminu Bawale, then queries, “So how then can we accept the self-labelling of Nigeria as an oil-based economy?”

    According to Dr. Abdullahi,  a former academic who taught Agric Economics and Rural Sociology at the Ahmadu Bello University, Zaria, “I would like to see a situation in which our budgets are not benchmarked on the price of oil, but rather on the value of a combined basket of major national commodities.”

    The national economy of any nation, he said, involves the people and the total sum of their endowed resources.

    For him, therefore, “the future of Nigeria’s and indeed, global economy is not oil. It lies in high technology; non-fossil energy sources, biotechnology and engineering,” arguing that in going forward, the country must build a knowledge-based economy to successfully participate in the 21st century competitive world.

    But the world economy, he warned, is moving into another cycle of crises, even when it has not completely weathered the 2008/2009 sub-prime mortgage crises, which originated in the U.S.

    Senator Abdullahi also isolated what he described as the four dangerous tendencies that are about to confront the global economy. The first, he said, is the current high interest rates in the U.S., leading to massive transfer of deposits from the emerging markets into the American economy.

    Another has been the current austerity regime in Europe, and China’s reforms to transform itself from manufacturing to service-led economy, resulting in a drop in the demand for primary commodities like oil.

    He explained that the combination of the above factors has led to shrinkage in the domestic productive capacities and massive unemployment, threatening social and political stability of many emerging markets.

    The senator then called for the public support of President Muhammadu Buhari’s new vision, as captured in the 2016 budget, to build the foundation of a new economy based on the labour of our people and the resources of our nation.

    The Nigerian economy, Senator Abdullahi notes, needs expansionary policies; the revamping of national infrastructure, such as power, rail and road networks; our health and educational institutions which have become main sources of foreign exchange drain. Other key areas of attention should be agriculture, manufacturing and processing industries as well as low interest loan facilities, especially for the arts, crafts and new technological innovators of the Nollywood and software developers, so that Nigeria can build a more creative and technology-based economy, he added. Doing all these, the senator believes, would be possible if we curbed unbridled importation of needless and ridiculous items like rice, toothpicks, milk, eggs, apples and frozen chicken.

  • How Nigeria can survive economic downturn, by NLC, NES, others

    •ECA, SWF not in tandem with 1999 Constitution, says groups

    The  establishment of a Stabilisation Fund can help the country get out of its economic downturn, a report has said.

    The report, which was put together by a group, which includes the Nigeria Labour Congress (NLC) and the Nigeria Economic Society (NES), added that Nigeria is occupying  the 55th position of 69 nations rated for savings and investment.

    The depletion of the Excess Crude Account (ECA) when oil prices were high was also said to have contributed to the financial meltdown which the nation is facing.

    These facts are contained in a report by 43 groups under the auspices of the Citizens Wealth Platform(CWP).

    The groups include Nigeria  Labour  Congress (NLC); Nigeria Economic Society(NES); Nigeria Bar Association(Abuja); Institute of Chartered Accountants of Nigeria (ICAN), Abuja;  Trade Union Congress (TUC), Abuja; and International Centre for Development Budget, among others.

    The report said the nation’s Excess Crude Account (ECA) and the Sovereign Wealth Fund (SWF) may not stand the test of constitutionality  because they are at variance with constitutional provisions setting up the Distributable Pool Account in Section 162 of the 1999 Constitution.

    Quoting statistics from the SWFI, the report described Nigeria as a late starter to savings.

    “It is clear that the issue of savings and investment is a common practice around the world and Nigeria is a reluctant late starter.

    “Virtually, all major oil producers have SWFs with substantial sums tied to the production and marketing of oil.

    “There are also SWFs that are funded  from non-commodity sources, including pension funds. Other countries started their savings, investment and futures funds a long time ago.

    “It would, therefore, not be in accordance with fit and good practices and international norms to scrap the SWF or any other stabilisation fund. This will be a sign of fiscal indiscipline.”

    The report gave insight into how Nigeria ran into financial crisis and why its SWF had been a paltry $1.4 billion.

    The document added: “The trajectory of crude oil revenue and distribution since 2008 shows that we have been spending the funds in ECA at a time of high oil prices. Essentially, we refused to save and have virtually exhausted the funds in ECA. It also shows that the accounting for crude oil revenue and the funds in ECA appear not overtly transparent.

    “So many countries in the world have SWFs which have components on stabilisation, infrastructure investments and a futures fund. Nigeria started its SWF late with a total worth of about $1.4 billion.”

    It recommended a stabilisation fund for use during economic downturn.

    The report said: “Savings remain one of the hallmarks and signs of fiscal responsibility. It is an aphorism that the propensity to save is inversely related to the propensity to consume while the propensity to invest is directly related to the propensity to save.

    “Going by the foregoing, it is clear that if Nigeria desires to make steady progress, there is need to sustain a stabilisation fund for use during economic downturn.”

    The report said the nation’s ECA and SWF are at variance with Section 162 of the 1999 Constitution.

    The report said: “From the review of the legal framework, it appears stricto sensu that the stabilisation provisions setting up the ECA and the SWF may not stand the test of constitutionality as they seem at variance with constitutional provisions setting up the Distributable Pool Account in Section 162 of the 1999 Constitution.

    “There may be need for constitutional amendment to align ECA, the NSIA or any other stabilisation mechanism with the constitution.”

  • Govt’s economic direction now clearer, says LCCI

    Govt’s economic direction now clearer, says LCCI

    The Federal Government’s direction has become clearer, following its release of the Medium Term Expenditure Formework (MTEF) and the Fuiscal Strategy Paper (FSP), Lagos Chamber of Commerce and Industry (LCCI) Director-General Mr. Muda Yusuf has said.

    Speaking with The Nation, Yusuf said with the release of the MTEF and the FSP, business operators now have clearer indications of the government’s disposition towards the petroleum Industry Bill (PIB) and other reforms in the oil and gas sector.

    He said the 2016 budget has also given some insights into the economic plans of the administration. “Clearly, the situation with regards to the policy direction of the government is much better today than it was few months ago,” Yusuf said.

    He, however, said LCCI still expects further information and insights into the policy framework with regards to public private partnership and the scope for private sector investment in infrastructure provision. “This is very important in the light of the serious revenue constraints that the government is faced with,” he noted.

    Meanwhile, the LCCI chief has described the scrapping of the fixed electricity charge by the Federal Government through the National Electricity Regulatory Commission (NERC) as ‘laudable’. The fixed charge is that component of the tariff that commits electricity consumers to paying an approved amount of money mostly on a monthly basis, irrespective of whether electricity is consumed during the billing period or not.

    But NERC Chief Executive Officer (CEO), Dr. Sam Amadi, while announcing new electricity tariffs in the country recently, said electricity consumers would no longer pay the contentious and vexatious fixed charge included in the monthly electricity bills issued by the 11 DISCOs in the country. He said consumers would now only pay for what they consume monthly (pay-as-you-consume).

    But Yusuf, who lauded the removal of the fixed charge, said the provision of meters to consumers should be accelerated to put an end to the phenomenon of estimated billing. He said the NERC and the Minister of Power, Mr. Babatunde Raji Fashola (SAN)  had argued that the tariff review was a major plank of the Power Sector Reform and is critical to the delivery of power.

    He said the purpose, according to them, is to make electricity tariff cost -reflective to make investments in the sector attractive and sustainable. “It is difficult to fault this position, especially in the light of the clamour by the citizenry for a private sector driven power sector.  In any event, it will still be cheaper (even with the review) than individual firms or households providing electricity through generators powered by diesel, petrol generators or LPFO,” Yusuf said.

    He was, however, quick to warn that “electricity consumers should not be made to pay for inefficiency or corruption costs.  It is important to evaluate the elements of the current costs especially the integrity of procurement processes and other operational expenditure under the current dispensation. The risk of bloated costs exists and should be addressed.”

    The NERC explained that the tariff review was the result of a transparent, rigorous and credible rate review process that will lead to greater reliability in the provision of electricity. The commission added that with the review, “more people will progressively have access to the grid, more meters will be deployed and the need for self generation would be gradually reduced.”

    However, the LCCI chief pointed out that pricing is only one component (although fundamental) in the power delivery chain. “There are other issues such as availability of gas, security of gas infrastructures; adequacy of investment in gas infrastructure; security and adequacy of the transmission lines; huge indebtedness by the Ministries, Departments and Agencies (MDAs) to electricity distribution companies (DISCOs) and the general framework to mitigate the risk of investment in the sector. All these need to be sorted out in order to inspire investors’’ confidence,” he added.

    On the controversial Central Bank of Nigeria (CBN) Foreign Exchange (forex) policy, the LCCI chief said it is notable that President Muhammadu Buhari during his budget address to the National Assembly assured the nation that the forex policy will be reviewed.

    “One of the challenges of the investment environment is the foreign exchange policy especially the liquidity problem in the foreign exchange market,” he pointed out, adding that “Investors have issues with the exchange controls, the restrictions of importers of 41 items from access to the foreign exchange market, the restrictions on export proceeds, restrictions on the use of debit naira card abroad and above all, the liquidity crisis that has been created in the foreign exchange market.”

  • Let’s strike a bold new economic direction

    The Nigerian National Bureau of Statistics recently informed us that 60.9% of Nigerians live in ‘absolute poverty’, and that more of us are daily falling into that category. One of our former presidents, Olusegun Obasanjo, has warned repeatedly that youth unemployment in our country is over 70%, stating that it is a major factor of our poverty and that Nigeria, for this reason, is sitting on a time bomb. Most Nigerians don’t understand the enormous weight that youth unemployment means. Our youths (aged 17 to 38) constitute the overwhelming majority of our population. Some statisticians say that people of this age bracket constitute as much as over 60% of our population. But they are not merely the majority amongst us, they are also the naturally strongest, most dynamic and most capable of production. They produce and nurse most of our babies and therefore have an enormous impact on our national character. They are the most agile, most inquisitive, most inventive and most venturesome section of our population. When we say that 70% of them are unemployed, we are saying something of tremendous importance. We are saying that we are losing the productive contribution of the largest, strongest, most dynamic and most productive section of our population. Rather than receiving production from them, we are having to provide for them from the little that the rest of us are able to produce. That is a major reason why more and more of us are falling into abject poverty. Massive youth unemployment is not something we should even think of living with. It is too dangerous. For instance it is not only robbing us of productivity, it is also plunging our society into crime. Denied productive employment, the agile hands and legs of our youth are producing aberrant behaviour in all sorts of fearful directions. As a result, informed observers classify Nigeria as one of the most unsafe places in the world in peacetime.

    For decades, the truth of our existence as a country has been hidden from us (especially from the leaders and rulers of the nation) by the large revenues from crude oil. Our federal rulers could look at the endless seas of cash brought in by the rents and royalties of crude oil and delude themselves that we are a rich country. Our state governors and local government managers could go to Abuja and return with fat cheques and also deceive themselves that we are a rich country. Upon that whole edifice of self-deception, they proceeded to build a gigantic culture of public corruption. But now, the oil bonanza seems to be vanishing. Our self- deception is about to come to a crashing halt. We are obviously about to confront some very unpleasant truths as a nation. It is time for us to rush back to our youths – the most productive part of our economy- and call upon them to help. A bold new direction is urgently called for in our economy.

    Fortunately at this critical moment, we have a president who has promised change and has declared war on the culture of public corruption. It is therefore greatly welcome that President Muhammadu Buhari, in his first budget, is promising major steps towards youth development in order to empower and employ our youths. We must pray that he is able to push it as fast and as far as the situation demands. While he and his men are putting together the elements of the programme on youth development, I would like to offer him the suggestion that he should look at what Singapore did between 1965 and 1975. By 1965 Singapore was a desperately poor province of the Federation of Malaysia. It had no resources in land, forests, minerals, or even soft water. It was riddled with violent, corrupt and riotous politics. Almost all its youths were unemployed and unemployable. Crime was rampant. To do business at all, business owners usually had to surrender to extortion and make regular secret payments to criminal gangs. Masses of youths frequently rioted in the streets and the federal government regularly deployed security forces there to tackle the riots. One huge riot in 1965 went on for three months! As a result of this constant trouble, the federal prime minister proposed at the parliament that Singapore be expelled from the federation. Parliament overwhelmingly approved and Singapore suddenly found itself a separate country without any preparation. No country can be poorer than that. The leading Singaporean politician, a lawyer named Lee Kuan Yew, wept as he made the devastating announcement to his country. “For me and for Singapore”, he sobbed over the radio, “this is a day of anguish”.

    Yet, by 1975, 10 years later, Singapore had become one of the most successful economies in the world.  By 1976 when I visited Singapore, most of the world was already celebrating Singapore as “the Asian Success Model”. So how did Singapore do it? The central piece in their programme of development was to focus on the youth and to call them out to work. But first as preliminary, all the politicians agreed to commit to a responsible, cautious and orderly politics. As the country’s partisan and inter-ethnic politics simmered down, the youth riots gradually waned too. Then the government and leaders agreed on a bold new agenda to make the youths employable. Various institutions were created to teach modern job skills. Some businesses were licensed to teach job skills in their premises under government supervision.  All of the training was accompanied by very serious programmes of work ethics. To prepare the younger children for the system, very serious effort was put into improving education at the primary and secondary levels. Within years, Singapore’s workers had become known worldwide as skilled workers and highly dependable employees. As a result, businesses hurried to establish branches in Singapore and investors rushed there. Singapore’s people themselves then developed confidence to start businesses. By and by, a strong programme of infrastructural development followed. Singapore has continued to prosper. Its workmen are proud in their skills and in their efficiency and high work ethics. They are known to always seek to improve their service in all directions. Singapore’s educational system is now widely regarded as one of the best in the world. In fact, in education, this little country has much to teach the world, including even the giant, United States of America.

    In short, Nigeria’s youth development programme must focus on a sound combination of job and entrepreneurial skills and work ethics amongst our youths. It is not enough for a young, agile, intelligent and creative person to have good job skills, it is also critically important that he should be loyal to the success of his employers. A great deal of unemployment among our youth is a result of a lack of modern job skills. Even the job opportunities that are available struggle to find skilled workers. For instance our cities are expanding tremendously and that means a lot of jobs in the building trade. Sadly, it is well known that builders these days are having to recruit workmen from other countries.  A foreign company that won a contract to clean and plumb ships in the Apapa ports just could not find suitable Nigerian plumbers and had to recruit low level plumbers from their own country in Europe. It is also well known that there is a myth in Nigeria and abroad, that Nigerian workers are too disloyal to be employed. Of course the myth is unfair to a lot of our youth, but that’s what myths do – they include the good with the bad. Our youths desperately and urgently need a massive national programme of job and entrepreneurial skills and work ethics. We are well able to turn our economy around in just a few years. One must add of course is the promoter of this programme, each state must be used as the development unit in it and the state authorities empowered for that role. I hope President Buhari’s people are reading this. We must all wish them good success.

  • 2016 economic prospect not good, says LCCI

    2016 economic prospect not good, says LCCI

    Nigeria’s foremost private sector business association, the Lagos Chamber of Commerce and Industry (LCCI), has painted an admixture of a cautious optimism for the nation’s economy on the one hand, and a bleak outlook on the other for next year.

    While it posits that the N300billion projected funding of the Small and Medium Scale Enterprises (MSMEs) by the commercial banks would boost lending to the sector, grow agriculture and create employment as well as increase the chances of the countries foreign exchange earnings in non oil export, its thoughts on declining global oil prices and its consequence on government’s revenue, as well as firms honouring contractual obligations to their financiers, were bleak, suggesting that the economy may yet tread a turbulent trajectory in 2016.

    LCCI’s Director-General, Muda Yusuf, in a statement yesterday,  entitled,  Economic and Business Review in 2015 and Perspective for 2016, said: “The targeted N300 billion by the Nigerian banks to boost lending to Small and Medium Scale Enterprises (SMEs) and the agriculture sector in 2016 will boost SMEs development and employment and thus increase,” but nonetheless observed that the declining international spot oil price and its fallout will create unease for the economy in the coming year.

    As he put it: “With the declining trend of global oil price and its attendant impact on government revenue and foreign reserves, general business outlook will remain tense. Implications on cost of and access to credit will be undesirable. Businesses, especially those with high foreign exchange exposure, will continue to face challenges of meeting foreign obligations to suppliers and partners,” stressing that “this will also impact contractual trust and integrity.”

    He had no kind words for the Insurance sector either. In his words: “The insurance industry will remain largely underpenetrated with insurance density at about 0.225 per cent. Therefore, significant change in this industry with respect to growth and penetration remains bleak even as the sector is still highly fragmented,” he stated, pointing out that the declining Gross Domestic Product (GDP)  is also expected to strain, to a large extend, the performance of this industry.

    On the much trumpeted subsidy removal, Yusuf, argued that subsidy arrears payment and end of subsidy regime, would likely result in improved market efficiency and profitability as downstream sector players explore pricing dynamics to boost investment. The expected deregulation in the downstream sub-sector, in his view, “will be a game changer”.

    He warned of the likelihood of default across the business spectrum in 2016 due to cash flow hic-ups. “Risk of default in financial obligations in both public and private sectors will be high as macro-economic conditions and cash flow, remain tight,” Yusuf said.

    The LCCI chief expressed optimism that in 2016, GDP growth is expected to rebound ( as against its decline in the 3rd quarter of 2015, when it dropped to 2.84 per cent ), to about 3.5 per cent, if, as he put it, “the right mix of fiscal and monetary policies are put in place to stimulate the economy and attract domestic and foreign investments.” He said while the recovery is expected to be driven by increase in government expenditure, the growth in oil sector may be constrained still by low price and investment drive.

    He said the exchange rate volatility is expected to persist fuelling high inflation of about 10-11 per cent, stating however that correction towards Real Effective Exchange Rate (REER) in the form of exchange rate adjustment is likely in the first quarter of  2016, suggesting that this will reduce the pressure on external reserves.

    Yusuf drew attention to the deplorable state of access roads to the Lagos Ports, saying the subsisting situation has resulted in negative contribution to business as it has lead to congestion at the ports resulting from the delay in the evacuation of cargo, high demurrage paid by importers to Terminal Operators and Shipping Companies as a result of delays [which were not their own making] in the clearance and evacuation of cargo in the ports and high cost of transportation for evacuating cargo, among other challenges,

    He urged the Federal Government to fix these roads as a matter of  urgency, in addition to the completion of the Trailer Park within the vicinity of  the Tincan Island Port.

  • How BATNF is driving economic growth of smallholder farmers

    How BATNF is driving economic growth of smallholder farmers

    In Nigeria, as in most parts of Africa, rural areas are essentially home to smallholder farmers who produce the bulk of the food consumed locally thereby contributing in no small measure in ensuring food security for the nation, alleviating poverty, and helping government to actualise development goals.

    According to experts, smallholder farmers constitute over 70 per cent of the labour force in the agricultural sector. Unfortunately, their productivity has often been impeded by various factors some of which include inadequate credit facilities, poor policy implementation, poor access to market, lack of infrastructure, dearth of information on agriculture best/latest practices and shortage of improved technology along the value chain. Other inhibiting factors are inadequate cottage level processing facilities, preference for imported food ingredients to their local varieties, poor access to climate smart varieties and breeds, and conflicts between farmers and pastoralists.

    Regrettably, government’s effort at tackling the problem and mitigating the constraints faced by this category of farmers has not made far-reaching and lasting impact due to lack of funds and dwindling revenue from oil. Sometimes when the right policy framework exists and the needed infrastructure and initiatives are put in place, these well thought-out policies are usually not properly implemented or abandoned shortly after takeoff.

    For instance, the Cassava Bread initiative, which mandates 10 to 20 per cent inclusion of cassava flour, was part of measures intended to make Nigeria self-reliant in the production of some staple food crops thereby saving foreign exchange spent on flour importation.

    In spite of the pomp that greeted its inauguration by the previous administration and the publicity and media attention it received, the initiative is yet to get any traction.

    Reports indicate that Nigeria will save N300 billion annually from substituting wheat with cassava. This deliberate attempt at encouraging local production of staple foods, in the view of economists, is capable of expediting the resuscitation of the nation’s economy. Also, the initiative, apart from achieving import substitution and boosting export potentials and earnings, can help create more jobs and enhance the growth of agro-allied companies.

    Unfortunately, in recent years, import substitution strategy for development through agriculture has been repeatedly sabotaged by some agriculture produce importers under different guises, with the local farmers usually at the receiving end. The recent abuse of waivers on the importation of rice into the country readily comes to mind here.

    Determined to ensure that government policies and stimulus packages are inclusive of smallholder farmers, the British American Tobacco Nigeria Foundation (BATNF) recently organised a dialogue session on smallholder farmers and sustainable agriculture, which held in Lagos State. The session, themed ‘Agricultural Policies and the Nigerian Smallholder Farmers,’ was the climax of the activities of an executive working group set up by BATNF in January 2015 to undertake a careful multi-stakeholder review of the ATA and related agriculture policies and programmes.

    The group was also saddled with the responsibility of establishing the extent to which these policies support poor farmers and small and medium agribusinesses in wealth creation and increased productivity.

    In his opening address at the event, Director of Legal and External Affairs, British American Tobacco Nigeria (BATN), Mr Freddy Messanvi, described the Dialogue Session as “part of the BATNF’s advocacy platform aimed at facilitating access to policy-making decisions about smallholder farmers” who produce the bulk of the food Nigerians consume.

    The session provided an opportunity for agriculture experts and resource persons to dissect ATA, other extant agricultural schemes and matters related to agriculture business in Nigeria. It was noted that some of the critical areas that ATA has succeeded in affecting the lives and livelihood of smallholder farmers is in organising them into cooperative groups. There was also a consensus that government and the organised private sector should give impetus to the effort of smallholder farmers by providing for them the right incentives and financial support systems, as well as strengthening existing infrastructure to assist farmers in eradicating hunger and poverty.

    Prof Ben Ahmed of the Institute of Agricultural Research (IAR) and Ahmadu Bello University (ABU), while speaking on the impact of the ATA, noted that the contributions of the International Fund for Agricultural Development (IFAD)-assisted Rural Finance in Nigeria (RUFIN), which was integrated into ATA, helped in the formation of farmer groups that were linked to micro-finance banks (MFBs).

    ATA’s potential in diversifying the Nigerian economy and attracting foreign direct investment was also underscored by other speakers.

    Components of ATA and other agricultural policies reviewed by BATNF Executive Working Groups (EWGs) include the Nigeria Incentive-Based Risk Sharing System for Agricultural Lending (NIRSAL), Growth Enhancement Scheme (GES) and Climate Change, as well as the various Crops Enterprise Value Chain developments.

    Most of the presentations made by the various working groups looked at the current situation of ATA, the achievements made so far, the major challenges and shortcomings, and how they can be tackled. In their recommendations, they urged government to work with enduring policies that are well thought out.

    A notable concern raised by stakeholders about agriculture business in Nigeria is the ignorance of smallholder farmers of ATA as well as their exclusion from financial incentives offered by NIRSAL. It was observed that this barrier is due to the notion generally held by commercial banks that majority of smallholder farmers cannot meet their requirements and thus are not bankable.

    However, few banks, such as Stanbic IBTC, FCMB and UBA, were commended for being supportive to smallholder farmers. As a remedy, it was suggested that the traditional financial system, ‘Esusu,’ (thrift institution), which most of them have successfully practised for years, should be understudied and incorporated into the NIRSAL scheme so as to help meet the needs of the framework that is achievable for them.

    The Stakeholders Dialogue Session was necessitated by the need to provide a robust and expansive policy framework for the nation’s agricultural sector in line with the current administration’s resolve to enhance practices and output of the sector.

    It is the expectation of stakeholders in the agricultural sector that the findings made by the working groups and recommendations put forward to government on how to revamp the economy through small-scale agriculture would be critically examined by the incoming minister of agriculture so that it will not amount to another exercise in futility.

  • Economic policies: Sosan counsels entrepreneurs

    Economic policies: Sosan counsels entrepreneurs

    Former Lagos State Deputy Governor  Sarah Sosan has called on entrepreneurs and Small and Medium Enterprises (SMEs) to search for innovative ways of adapting their businesses and organisations to government policies no matter how unfriendly they seem.

    She said no government will intentionally hurt the growth of businesses in the name of policies, urging entrepreneurs to be on top of their game and apply themselves to the rules governing business operations.

    Speaking to The Nation in Lagos, she said although, the recent Central Bank of Nigeria (CBN) Foreign Exchange (forex) policy that eliminated importers of 41 items from accessing forex through CBN window may on the face value seem inimical to the manufacturing sector due to attacks on the policy by members of the oraganised private sector, the policy is for the overall well-being of the economy.

    According to her, government, through the policy, seeks to protect local manufacturers against unhealthy competition from imported goods. She insisted that the end of the current economic pain will justify the means, which will ultimately grow local capacity and encourage value addition in the manufacturing process.

    Sosan, however, decried the free fall of the naira against the United States dollar. She, therefore, threw her weight behind every effort of government to shore up the value of the naira.

    The former deputy governor urged government to step up efforts on job creation, insisting that engaging the youth remains the panacea to restiveness and security challenges facing the country.

    Speaking on the success of the just concluded International Trade Fair organised by the Lagos Chamber of Commerce and Industry (LCCI) and the increased interest by overseas participants, Mrs. Sosan said the heightened interest in the fair may be attributed to the renewed confidence on the economy.

    The just-concluded fair with the theme: “Enhancing Value Addition in the Non-oil Economy”, China, Egypt, Japan, Ghana, India, European Union, Indonesia and Pakistan, with an average of 500,000 visitors daily.

    Sosan stressed that what the economy lost in the 2014 fair as a result of the outbreak of Ebola virus that discouraged exhibitors from Europe and Asia was recovered this year with the huge presence of exhibitors from overseas countries with products and services that will impact positively on the economy.

    She said the current administration has brought in sterling qualities in the management of the economy with fiscal and monetary reforms poised at driving economic growth. She expressed optimism that the new ministers will drive policies that will encourage local entrepreneurs, the non-oil economy and export trade.

  • Social entrepreneurs seek economic solutions

    International social entrepreneurs are gathering in Lagos next week to seek solutions that make quality livelihoods and securing economic rights for Nigerians.

    The Development Dialogue, with “Spurring Africa’s Development by Social Innovation and Leadership” as its  theme will hold November 26th. According to the organisers, the high-impact summit for Nigeria’s development sector, will host over 500 practitioners across impact areas including agriculture, education, healthcare, media and arts, economic empowerment and financial inclusion, housing, environment, gender advocacy among others.

    The Dialogue, which builds on the success of a pilot edition held in May, will spark interesting conversations around achieving the Sustainable Development Goals in Africa, principled leadership and social innovation as well as linkages of collaboration for social good.

    Executive Director of Ideation Hub Africa, Debola Deji-Kurunmi, (host of the event), expressed enthusiasm saying: “We believe that Nigeria’s development space is an enormous one, and this summit provides a desperately needed platform to explore the narratives around Africa’s prosperity through the third sector.”  Experts  expected to address the forum include Country Director for African Development Bank in Nigeria, Dr.Ousman Dore, who  will  represent the bank’s president, Dr.AkinwunmiAdesina .

    He   will deliver the keynote speech on Spurring Africa’s Development by Social Innovation and Leadership.

     

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  • How BATNF is driving economic growth of smallholder farmers

    How BATNF is driving economic growth of smallholder farmers

    In Nigeria, as in most parts of Africa, rural areas are essentially home to smallholder farmers who produce the bulk of the food consumed locally thereby contributing in no small measure in ensuring food security for the nation, alleviating poverty, and helping government to actualise development goals.

    According to experts, smallholder farmers constitute over 70 per cent of the labour force in the agricultural sector. Unfortunately, their productivity has often been impeded by various factors some of which include inadequate credit facilities, poor policy implementation, poor access to market, lack of infrastructure, dearth of information on agriculture best/latest practices and shortage of improved technology along the value chain. Other inhibiting factors are inadequate cottage level processing facilities, preference for imported food ingredients to their local varieties, poor access to climate smart varieties and breeds, and conflicts between farmers and pastoralists.

    Regrettably, government’s effort at tackling the problem and mitigating the constraints faced by this category of farmers has not made far-reaching and lasting impact due to lack of funds and dwindling revenue from oil. Sometimes when the right policy framework exists and the needed infrastructure and initiatives are put in place, these well thought-out policies are usually not properly implemented or abandoned shortly after takeoff.

    For instance, the Cassava Bread initiative, which mandates 10 to 20 per cent inclusion of cassava flour, was part of measures intended to make Nigeria self-reliant in the production of some staple food crops thereby saving foreign exchange spent on flour importation.

    In spite of the pomp that greeted its inauguration by the previous administration and the publicity and media attention it received, the initiative is yet to get any traction.

    Reports indicate that Nigeria will save N300 billion annually from substituting wheat with cassava. This deliberate attempt at encouraging local production of staple foods, in the view of economists, is capable of expediting the resuscitation of the nation’s economy. Also, the initiative, apart from achieving import substitution and boosting export potentials and earnings, can help create more jobs and enhance the growth of agro-allied companies.

    Unfortunately, in recent years, import substitution strategy for development through agriculture has been repeatedly sabotaged by some agriculture produce importers under different guises, with the local farmers usually at the receiving end. The recent abuse of waivers on the importation of rice into the country readily comes to mind here.

    Determined to ensure that government policies and stimulus packages are inclusive of smallholder farmers, the British American Tobacco Nigeria Foundation (BATNF) recently organised a dialogue session on smallholder farmers and sustainable agriculture, which held in Lagos State. The session, themed ‘Agricultural Policies and the Nigerian Smallholder Farmers,’ was the climax of the activities of an executive working group set up by BATNF in January 2015 to undertake a careful multi-stakeholder review of the ATA and related agriculture policies and programmes.

    The group was also saddled with the responsibility of establishing the extent to which these policies support poor farmers and small and medium agribusinesses in wealth creation and increased productivity.

    In his opening address at the event, Director of Legal and External Affairs, British American Tobacco Nigeria (BATN), Mr Freddy Messanvi, described the Dialogue Session as “part of the BATNF’s advocacy platform aimed at facilitating access to policy-making decisions about smallholder farmers” who produce the bulk of the food Nigerians consume.

    The session provided an opportunity for agriculture experts and resource persons to dissect ATA, other extant agricultural schemes and matters related to agriculture business in Nigeria. It was noted that some of the critical areas that ATA has succeeded in affecting the lives and livelihood of smallholder farmers is in organising them into cooperative groups. There was also a consensus that government and the organised private sector should give impetus to the effort of smallholder farmers by providing for them the right incentives and financial support systems, as well as strengthening existing infrastructure to assist farmers in eradicating hunger and poverty.

    Prof Ben Ahmed of the Institute of Agricultural Research (IAR) and Ahmadu Bello University (ABU), while speaking on the impact of the ATA, noted that the contributions of the International Fund for Agricultural Development (IFAD)-assisted Rural Finance in Nigeria (RUFIN), which was integrated into ATA, helped in the formation of farmer groups that were linked to micro-finance banks (MFBs).

    ATA’s potential in diversifying the Nigerian economy and attracting foreign direct investment was also underscored by other speakers.

    Components of ATA and other agricultural policies reviewed by BATNF Executive Working Groups (EWGs) include the Nigeria Incentive-Based Risk Sharing System for Agricultural Lending (NIRSAL), Growth Enhancement Scheme (GES) and Climate Change, as well as the various Crops Enterprise Value Chain developments.

    Most of the presentations made by the various working groups looked at the current situation of ATA, the achievements made so far, the major challenges and shortcomings, and how they can be tackled. In their recommendations, they urged government to work with enduring policies that are well thought out.

    A notable concern raised by stakeholders about agriculture business in Nigeria is the ignorance of smallholder farmers of ATA as well as their exclusion from financial incentives offered by NIRSAL. It was observed that this barrier is due to the notion generally held by commercial banks that majority of smallholder farmers cannot meet their requirements and thus are not bankable.

    However, few banks, such as Stanbic IBTC, FCMB and UBA, were commended for being supportive to smallholder farmers. As a remedy, it was suggested that the traditional financial system, ‘Esusu,’ (thrift institution), which most of them have successfully practised for years, should be understudied and incorporated into the NIRSAL scheme so as to help meet the needs of the framework that is achievable for them.

    The Stakeholders Dialogue Session was necessitated by the need to provide a robust and expansive policy framework for the nation’s agricultural sector in line with the current administration’s resolve to enhance practices and output of the sector.

    It is the expectation of stakeholders in the agricultural sector that the findings made by the working groups and recommendations put forward to government on how to revamp the economy through small-scale agriculture would be critically examined by the incoming minister of agriculture so that it will not amount to another exercise in futility.

  • We’ve no offensive economic agenda, says EU envoy against Nigeria, says envoy

    We’ve no offensive economic agenda, says EU envoy against Nigeria, says envoy

    • €6.5 billion trade development grant coming 

    The European Union (EU) has no offensive economic agenda against Nigeria on the implementation of the Economic Partnership Agreement (EPA) between the EU and West Africa, the EU Ambassador/Head of Delegation to Nigeria & ECOWAS Ambassador, Micheal Arrion has said.

    Rather, the EU’s mission in Nigeria and West Africa, he said, is to ensure the advancement of the sub-region as well as the enhancement of the competitiveness of its various economic segments.

    Arrion made the clarification in Lagos while announcing the fourth EU-Nigeria Business Forum (EUNBF) with the theme Unlocking Opportunities for Diversification.

    The EPA seeks to create a Free Trade Area (FTA) between the EU and the African, Caribbean and Pacific Group of states (ACP). Under the scheme, the EU would immediately offer the 15-member ECOWAS and a non-member state, Mauritania, full access to its markets. In return, ECOWAS would gradually open up 75 per cent of its markets – with their 300 million consumers – to Europe over a 20-year period.

    But the EPA has been largely criticised by some members of the business community particularly manufacturers who raised concerns over perceived potential negative impact of the deal on the nation’s industrial sector if certain products were allowed tariff-free entry into the Nigerian market. The thinking was that the EPA would not be in the overall interest of the Nigerian economy over the long term.

    But the EU envoy noted that most of the arguments against the EPA were wrong, bordering on emotions than facts. He said in pushing for EPA, investors from EU’s 28-member states see Nigeria as a place they can invest and so had no hidden agenda whatsoever. “We have no offensive agenda for Nigeria because we believe that Nigeria and ECOWAS are very important places where European or other non-European businesses could invest because there is enough room for investment,” he said.

    Arrion, however, assured that in investing in Nigeria and other ECOWAS member states, the EU would not invade the West African market with products that could compete with domestic products which Nigeria and other countries in the region would be producing, pointing out that the EU has removed all its export subsidies to the West African market.

    Arrion stressed the importance of the EUNBF, which started in Lagos yesterday and ends tomorrow, noting that it would bring together business leaders and policy makers from both the public and private sectors in the EU and Nigeria to discuss business opportunities and impediments to investments. Specific sessions have been designed to address obstacles to the effective development of the agricultural value chain and the opportunities which exist in the framework of the EPA between the EU and West Africa.

    “The forum will aim to increase domestic and foreign investments particularly in agribusiness, in line with Nigeria government’s diversification efforts,” he explained, announcing €6.5billion financial trade related development assistance for Nigeria’s growth and development for every five years till 2035. He said the gesture was to demonstrate the EU’s strong belief and confidence in the Nigerian market.

    “Every five years, we are committed to giving grants and development assistance. The EU and its 28 member states have agreed to give a minimum of €6.5billion for every five years. We are very comfortable to provide this development assistance,” he said, adding that since 2012, EUNBF, a collaborative effort of the EU and its member states in Nigeria, has served as a platform for private sector participants to gather essential market information, identify business opportunities and connect with key players.

    Noting that EU’s economic relations with Nigeria have been robust, with the EU being the top destination for Nigeria’s oil and non-oil exports, Arrion said the volume of trade between Nigeria and EU stood at €34.4billion in 2013, accounting for 29.6 per cent of Nigeria’s total trade in that year.

    He stated that the forum will build on these strong relations to deepen understanding of the role that EPA can play in supporting the diversification of Nigeria’s economy. “It will also strengthen EU-Nigeria business relations through identification of opportunities in agribusiness and forging of partnerships, while also addressing bottlenecks related to the effective development of agribusiness in Nigeria,” he added.

    Arrion however, pointed out that many of Nigeria’s economic policies are at variance with the basic rules of ECOWAS trade operations in the sub-region. He said, for instance, that since January 2015 when the new ECOWAS Common External Tariff (CET) came into force, giving member states 14 months to comply, Nigeria is yet to comply in clear disregard for agreements and conventions of ECOWAS.

    “Nigeria is maintaining import bans against ECOWAS. You can do this outside ECOWAS but not within. You are part of the same community and bound by some rules relating to free movement of goods and people,” he stated.