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Tag: economic

  • ‘Import substitution policy to ward off economic crisis’

    ‘Import substitution policy to ward off economic crisis’

    As the harsh reality of plunging crude oil prices continues to dawn on the Federal Government, the Ministry of Industry, Trade and Investment is determined to champion the import substitution model to tackle the  country economic crisis in the country.

    The Minister of Industry, Trade and Investment, Dr. Olusegun Aganga, who spoke during a visit to Secure ID Limited, Lagos, said Nigeria could no longer continue to be an import-dependent country.

    According to him, the nation  is wasting its foreign reserves on imported products, most of which can be produced locally.

    Dr. Aganga noted that there is need to  urgently steps in the next four years to address more of the challenges hindering economic growth. “If we do not address the import situation in the next three to four years, we will be in a very big trouble in terms of our economic development,” he warned. The minister praised the factory’s efforts at boosting industrialisation, maintaining that the country is wasting its foreign reserves importing products it can produce.

    His words: “The message of this administration is very clear. We can no longer be a country that is import dependent, especially on products we can produce in this country. There are many actors we should have developed as a country, but we relied for decades on exporting raw materials which is oil.  That era is gone and this is why the president launched the Nigeria Industrial Revolution Plan (NIRP) in 2012.”

    The Minister disclosed that under the NIRP, government’s approach is to diversify the nation’s revenue sources to boost economic growth. He said going by the plan, Nigeriaby 2018, will no longer import petroleum products into the country and this will save the nation a minimum of about $10 billion. “We spend about $3 billion importing steel; we spend about $6 billion importing cars and spare parts and also spend about $1.7 billion importing sugar where we can grow sugar cane to get sugar,” he said.

    While insisting that “Jonathan is the solution to the debacle we have had for decades and the idea is a matter of time to let him get the plan completed,” he said the falling oil price and devaluation of the naira have gotten Nigerians all surprised because for decades, the country adopted the wrong policies.

    In line with the new strategic thinking in favour of import substitution,the Federal Government had, as part of its emphasis on rapid growth of the non-oil sector for exports, listed 13 National Strategic Export Products (NSEP) meant to replace petroleum products whose prices have continued to tumble on the international market and in the process, threatening the stability of the economy.

    Aganga, during an unscheduled inspection and a meeting with the Executive Director of Nigerian Exports Promotion Council (NEPC), Mr. Olusegun Awolowo and members of the management team in Abuja, listed the 13 NSEP in three categories including; agro-industrial- palm oil, cocoa, cashew, sugar and rice; mining related- cement, iron ore/metals, auto parts/cars, aluminium and oil and gas industrial products- petroleum products, fertilizer/urea, petrochemical and methanol.

    The Minister noted that originally 12 products were identified, but the number increased because the Executive Director of NEPC made a very strong case for the inclusion of cashew on the list. Aganga, however, charged the NEPC to deploy its capacity for kick-starting the diversification of the country’s economy in line with the government’s agenda.

    Mr. Awolowo noted that NEPC under his leadership had long recognised the need to develop the non-oil export sub-sector and had in the process held series of strategic meetings with stakeholders for the development of ideas aimed at improving the foreign exchange earnings by Nigeria through different avenues. These, he said, included the development of a 4-year Strategic Plan, One State One Product (OSOP), Nigerian Diaspora Export Programme (NDEX) and the development of new markets for new products.

    Others, the NEPC boss said, include special initiatives on the Sub regional Economic Community of West African States (ECOWAS) markets, multi-stakeholders’ engagement of the export community, especially deepening of relationship with key stakeholders such as the Manufacturers Association of  Nigeria (MAN), Chambers of Commerce, National Cashew Association of Nigeria (NCAN), Cocoa Association of Nigeria (CAN), among others initiatives.

    Awolowo assured that the agency would do its best in collaborating with other stakeholders to ensure increasing foreign exchange earnings by Nigeria with a view to reducing the effects of the current fall in oil prices at the international markets.

  • China’s economic reforms bring benefits

    China’s ongoing economic reforms and initiatives on regional development will benefit both itself and the rest of the world, top European economists have said.

    Speaking at the World Economic Forum annual meeting in Davos, Switzerland, Chinese Premier Li Keqiang said the Chinese economy, the world’s second largest, is not heading for a hard landing.

    During the economic transformation and upgrading, “the only risk for China was stagnation, but this has been overcome,” Daniel Gros, director of the Brussels-based Center for European Policy Studies, told Xinhua in an interview.

    China’s economic reforms benefit the world in two ways, according to Gros, a former economic adviser to the European Commission and then the European Parliament.

    “First, everybody benefits if China grows more strongly, especially if growth is re-balanced from investment and exports towards consumption,” he told Xinhua.

    “Second, making the market the main determinant of economic decisions also facilitates trade,” Gros continued.

    Fredrik Erixon, director of the European Centre for International Political Economy (ECIPE), a world-economy think tank based in Brussels, said economic reforms that open up for more competition and innovation are key to China’s development.

     

     

    “The country could add a new dimension to its global economic leadership by fastening economic reforms that can reverse the country’s growth trend,” the Swedish economist said.

    In recent years, China has been eyeing economic upgrading through coordinating its financial and monetary policies and through long-term investment in such areas as infrastructure.

    China has also proposed or promoted a host of initiatives, including the Silk Road Economic Zone, the 21st Century Maritime Silk Road, the BRICS Development Bank and the Asian Infrastructure Investment Bank, as part of efforts to fund global public investment and pursue win-win results.

    On these initiatives, Gros said a distinction should be made between internal investment drive and the financing of investment abroad.

    “Internal infrastructure investment has been useful to maintain demand and employment in the short run, but it does little to address the domestic demand deficiency which one can see in the continuing very high national (not merely household) savings rates,” he explained.

     

    Chinese efforts to finance global public investment are laudable, but the size of this investment would be much smaller than domestic investment because other countries have an absorption problem for foreign capital, Gros said.

    Noting that these initiatives will help push growth, Erixon said that “new investments that are combined with economic reforms have a much better multiplying effect.”

    Regarding China’s trade policies, the ECIPE chief said China’s efforts to spur regional trade integration are important.

    China’s trade negotiations with the United States or the European Union should not be that far off, provided that domestic economic reforms are sped up, he added.

    Chinese capital going overseas

    Asked to comment on the going-out of Chinese capital, Erixon said the global market has seen an increasing competitve presence of Chinese companies.

    Some sectors are sensitive in some countries, especially the infrastructure sector and those previously privatized sectors, but countries with a protectionist sentiment towards Chinese are declining in number, he said.

    China can contribute to better conditions for cross-border investment by allowing more competition between outward oriented Chinese investors and by reforming corporate governance that will make it easier for others to understand how companies in China work, according to Erixon.

    Innovation

    Both economists also offered their insights on how China can step up its innovation-led growth, as Chinese governments are pushing for more innovation-supporting measures, including encouraging people to start undertakings and promoting the development of the internet economy.

    Erixon said apart from increasing the scope for competition in the economy, China could accelerate its own innovation-led growth by education.

    “The experience of many other countries is that it is smarter to invest in readiness to adopt innovations than invest in the capacity to create them,” he added.

    Innovation is best left to the private sector, Gros said, noting that in reality, the government is rarely the source of innovation.

  • ‘Import substitution policy to ward off economic crisis’

    ‘Import substitution policy to ward off economic crisis’

    As the harsh reality of plunging crude oil prices continues to dawn on the Federal Government, the Ministry of Industry, Trade and Investment is determined to champion the import substitution model to stem the economic crisis in the country.

    The Minister of Industry, Trade and Investment, Dr. Olusegun Aganga, who spoke during a visit to Secure ID Limited, Lagos, said Nigeria could no longer continue to be an import-dependent country. According to him, the nation at moment, is wasting its foreign reserves on imported products most of which can be produced locally.

    Dr. Aganga noted that there is need to take urgent steps in the next four years to address more of the challenges hindering economic growth. “If we do not address the import situation in the next three to four years, we will be in a very big trouble in terms of our economic development,” he warned. He commended the factory’s efforts at boosting industrialisation, maintaining that the country is wasting its foreign reserves importing products it can produce.

    His words: “The message of this administration is very clear. We can no longer be a country that is import dependent, especially on products we can produce in this country. There are many actors we should have developed as a country, but we relied for decades on exporting raw materials which is oil.  That era is gone and this is why the president launched the Nigeria Industrial Revolution Plan (NIRP) in 2012.”

    The Minister disclosed that under the NIRP, government’s approach is to diversify the nation’s revenue sources to boost economic growth. He said going by the plan, Nigeriaby 2018, will no longer import petroleum products into the country and this will save the nation a minimum of about $10 billion. “We spend about $3 billion importing steel; we spend about $6 billion importing cars and spare parts and also spend about $1.7 billion importing sugar where we can grow sugar cane to get sugar,” he said.

    While insisting that “Jonathan is the solution to the debacle we have had for decades and the idea is a matter of time to let him get the plan completed,” he said the falling oil price and devaluation of the naira have gotten Nigerians all surprised because for decades, the country adopted the wrong policies.

    In line with the new strategic thinking in favour of import substitution,the Federal Government had, as part of its emphasis on rapid growth of the non-oil sector for exports, listed 13 National Strategic Export Products (NSEP) meant to replace petroleum products whose prices have continued to tumble on the international market and in the process, threatening the stability of the economy.

    Aganga, during an unscheduled inspection and a meeting with the Executive Director of Nigerian Exports Promotion Council (NEPC), Mr. Olusegun Awolowo and members of the management team in Abuja, listed the 13 NSEP in three categories including; agro-industrial- palm oil, cocoa, cashew, sugar and rice; mining related- cement, iron ore/metals, auto parts/cars, aluminium and oil and gas industrial products- petroleum products, fertilizer/urea, petrochemical and methanol.

    The Minister noted that originally 12 products were identified, but the number increased because the Executive Director of NEPC made a very strong case for the inclusion of cashew on the list. Aganga, however, charged the NEPC to deploy its capacity for kick-starting the diversification of the country’s economy in line with the government’s agenda.

    Mr. Awolowo noted that NEPC under his leadership had long recognised the need to develop the non-oil export sub-sector and had in the process held series of strategic meetings with stakeholders for the development of ideas aimed at improving the foreign exchange earnings by Nigeria through different avenues. These, he said, included the development of a 4-year Strategic Plan, One State One Product (OSOP), Nigerian Diaspora Export Programme (NDEX) and the development of new markets for new products.

    Others, the NEPC boss said, include special initiatives on the Sub regional Economic Community of West African States (ECOWAS) markets, multi-stakeholders’ engagement of the export community, especially deepening of relationship with key stakeholders such as the Manufacturers Association of  Nigeria (MAN), Chambers of Commerce, National Cashew Association of Nigeria (NCAN), Cocoa Association of Nigeria (CAN), among others initiatives.

    Awolowo assured that the agency would do its best in collaborating with other stakeholders to ensure increasing foreign exchange earnings by Nigeria with a view to reducing the effects of the current fall in oil prices at the international markets.

  • Reviving long-term economic plan

    Governments’ development economic plans have protected their economies  through periods of certainty and uncertainty.

    Such economic plans allow a country to influence, direct, and control changes in principal economic variables such as investment, savings, consumption expenditures, exports, and imports, over a period of time in order to achieve a pre-determined set of goals.

    The development plans are often classified into four broad categories, including short-range plans, medium-range plans, long-range plans, and rolling plans.

    Nigeria has not been left out of this practice as it has in the past strictly followed various lengths of economic plans from pre-independence to the post-independence era.

    The first attempt at development planning in Nigeria was the Ten-Year Plan of Development and Welfare (1945- 1955) it was followed by the Second Pre-Independence National Development  Plan (1955 – 1960).

    Development plan in Nigeria, after indepedence include the First National Development Plan (1962-1968), the Second National Development Plan (1970-1974), the Third National Development Plan (1975-1980) and the Fourth National Development Plan (1981-1985). This was followed by the Structural Adjustment Programme (SAP) of the regime of former Military President, Ibrahim Babangida.

    The national rolling plans in the country began with the First National Rolling Plan (1990-1992), the Second National Rolling Plan (1991-1993),  the Third National Rolling Plan (1993-1995), the Fourth National Rolling Plan (1994-1996) and the Fifth National Rolling Plan (1997-1999).

    But some economic analysts have identified many problems that mitigated against successful implementation of development plans in Nigeria over the years.

    The problems, according to them, include corruption, lack of feasibility studies and/or project analysis and effective coordination of development efforts, lack of suitable economic and political environment, lack of consultation and involvement of the local communities and the private sector in planning efforts and plan implementations.

    Other problems, they said, include shortage of specialised skills, dearth of reliable data, technical changes and unforeseen economic fortunes, lack of properly defined economic and social goals, over-ambitious estimates, balance of payments problems and the nature of international economic environment, and bureaucracy in the Government administrative machinery.

    These problems could have informed the decision of those adminstrations that avoided such economic plans and went ahead to run their government on emergency basis.

    But President Goodluck Jonathan, on the first day of this year, noted that such emergency plan has resulted in wobbling economy.

    Speaking at the New Year Service of the Dunamis International Gospel Centre, Abuja, he said: “For you to achieve anything, you must have a clear vision. Even if you look at what we have been doing as a nation, you will really see that before this time when the country used to have this 25 years plan, the budget was based on 25 years clear plan for the country. So you know where you are going for 25 years. Then it is broken down into 5 years plan and annual budget and we knew where we were going.”

    “But after sometimes, things collapsed and we run government on emergency basis and you see government start wobbling. We are going back to those good days when we have vision. We have plan for agriculture, we have plan for industry, we have plan for automobile and many other areas.” he added.

     

    Jonathan’s kinsmen and emblem

    Next week Thursday is the 2015 Armed Forces Remembrace Day, which is a day specially dedicated for remembering fallen heroes, their relations and injured soldiers.

    Towards supporting the relations of the deceased and the living heroes, President Goodluck Jonathan had last month launched the 2015 emblem to raise fund for the Nigerian Legion.

    Not only did Jonathan encouraged Nigerians to buy the emblem but he made it mandatory for members of his cabinet and visitors to the Presidential Villa, Abuja.

    “I, personally, will put on the emblem from today till January 15, and in the State House it is a tradition that for you to come in from tomorrow, you must wear the emblem.’’ Jonathan stated

    The security officials manning the key entrances leading to the President’s office and residence have not failed to enforce the directive as it would be a miracle for anybody without the emblem to pass through such points.

    Jonathan’s kinsmen including royal fathers from Bayelsa State were not exempted from the directive when they came to wish him merry Christmas and happy New Year at Aso Rock last Tuesday.

    Apart from the normal security checks on Jonathan’s kinsmen at the gates, the security personnel had to make sure they were all hanging the emblem before heading to Jonathan’s residence.

    Since most of them did not come with the emblem from Bayelsa State, they had to quickly buy one to gain entrance.

    This is just one of the sales strategy for the emblem and it will really go a long way if all the proceeds from the emblem really get to the Nigerian Legion for the benefit of those who are entitled to it.

    The Chairman of the Nigerian Legion, Col. Micah Gayya had complained during the launching in December that N75 million out of the N105 million pledged in 2013 for the emblem was yet to be received after over one year.

    Hear him: “The saddest thing is that these pledges are made in the pubic eye leaving us with no avenue to tell the world that such pledges have not been redeemed. We call with loud voice on those who did not redeem their pledges to honourably do so.”

    “We had our Legion Humanitarian Day on 27 November 2014 during which we empowered widows and gave bursary to the children of the fallen heroes. Our emphasis was on the victims of the current insurgency operation in the country especially those who are yet to be paid their benefits.”

    “We lost over 100 members to the current insurgency in the Northeast and the affected families are in dare need of help.” he stated.

    It is really hoped that this year will be different for the Nigerian Legion.

     

  • ‘Nigeria, others’ economic growth not shared’

    A new report has shown that while Nigeria and other countries in Africa have witnessed economic growth, such a growth has not translated to shared prosperity as poverty still ravages the continent.

    The report, the Africa Prosperity Report, launched in Kigali at the annual African Leadership Network conference, confirms great successes across the continent in terms of economy and entrepreneurship  and opportunity.

    However, it unveils serious problems in health, education and safety & security underlining the challenges that are faced across the continent that are impacting long-term development and shared prosperity.

    The report is designed to shed light on the issue and inform better policy making.

    Speaking on the report, Programme Director of the Prosperity Index, Nathan Gamester, said: “Prosperity is not just about having a strong economy; it is about having great education, healthcare, and freedom to choose among other things.

    “As African economies grow, a chief concern for many governments is how to ensure that the fruits of growth benefit a majority of the population and contribute to true long term prosperity. “

  • Rivers records giant economic strides

    Rivers records giant economic strides

    The biting economic crunch occasioned by high volatility in oil prices, whose resultant effect include but not limited to shrinking oil revenue receipts, inadequate investment in social infrastructure, among others, has literally left many so-called buoyant oil-dependent economies across the globe in dire straits.

    Unfortunately, Nigeria, also a major oil-producer, is no exception as it is already suffering the negative effect of the decline in oil revenues. For some time now, allocation from the Federation Account has been anything but adequate even as the excess crude oil fund has been virtually depleted with most states of the federation finding it difficult to pay salaries and wages and not to forget the rippling adverse effect on economic growth and development.

    But some states like Rivers have fared better, thanks to their ingenuity. Described as unarguably Nigeria’s treasure base and fastest developing state, Rivers, in the last few years, has undergone rapid turn-around in agriculture, social and physical infrastructure, education, human capital development, sports, health services and many more; such that many economic watchers marvel at the ease with which the state executes projects as though they are going out of fashion!

    In the view of experts who traversed the length and breadth of the state, Rivers is brimming with possibilities. One way it has been able to achieve its many laudable feats, is through strict adherence to ingenious management and fiscal prudency.

    The recent report by the international rating agency-Standard and Poor’s where its annual rating for 2014 affirmed the ”B” rating of Rivers State, with a long term ”stable” outlook easily buttress, this fact.

    The annual rating meeting was conducted in September 2014, by the firm in conjunction with the Rivers State Ministry of Finance.

    It will be recalled that only last month, the Fitch Rating Agency also affirmed the BB- rating of the State (AA-National rating) with a long-term ”stable” outlook.

    Addressing newsmen in Port Harcourt, the state capital, the Commissioner for Finance, Dr. Chamberlain Peterside, expressed delight with the rating, adding that ”the report underscores the strong commitment and zeal of Governor Ameachi to bequeath a lasting legacy with the reform effort in the public finance sector of Rivers State.”

    Peterside said that the key rating, drivers is the continued effect by the government to reform and modernise its public finance architecture through ongoing automation project called State Integrated Financial Management and Information System (SIFMIS), being implemented with the support and funding from the World Bank.

    ”This project when completed will enhance the level of transparency whilst improving financial reporting especially in light of the ongoing transition to International Public Section Accounting Standards (IPSAS) in 2015 and 2016,”the Commissioner said.

    The Commissioner said that the rating cites the current declining federal allocation as a key factor that could impact the liquidity position of the state, thereby bringing increased pressure on the states’ finances and infrastructure investments.

    According to the Finance Commissioner, a potential bright spot in the light of recent liquidity squeeze, however, is the relentless effort to boost Internally Generated Revenue (IGR), while curbing operating expenses towards the end of current tenure just as it reckoned that the overall financial outlook of the state remains stable despite these systemic fiscal challenges.

    Recall that Rivers State first attained International credit rating in 2008 and ever since, it has remained the first and only state in Nigeria to maintain a dual International credit rating.

    Besides foreign observers, local observers have also acknowledged that Rivers State has recorded giant strides in virtually all spheres of human endeavour.

    For instance, several communities in Rivers State have taken stock of numerous people-oriented projects embarked upon by  Governor Chibuike Amaechi since he assumed office in 2007.

    The communities showered encomiums on Amaechi during his ‘Meet the People’ tour of Obio/Akpor communities recently.

    In almost all the communities, the people thanked Governor Amaechi for empowering the people of Obio/Akpor LGA through the Chief of Staff, Government House, Sir Tony Okocha and the Caretaker Committee CTC Chairman of Obio-Akpor Local Government Area, Dr. Lawrence Chukwu in skills acquisition, provision of vehicles, payment of Sure-P, monetary assistance for business and trading purposes for widows and indigent persons in the communities.

    Speaking on behalf of the people of Mgbuesilaru, Rumuodara, Eliowhani and Iriebe communities which make up Ward 2 of the LGA, Ward Leader, Chimenem Nnanta Weli, said the people were happy with the landmark achievement of Governor Amaechi in the area.

    In Ward 3- Rumuokwurusi and Atali towns, the people pledged to continually support the governor in his giant strides towards the transformation of the state.

    A joint address by the Chairman, Rumuokwurusi Town Council, Kingsley Onuoma Ejekwu and Chairman, Atali Town Council, Chief Dareth Oparati read, “We wish to thank you for the various projects your administration sited in our Ward, which include; the ongoing dualisation of Rumuokwurusi-Igwuruta road, two model primary schools in Rumuokwurusi, one in Atali, one model health centre, construction of two Electric Power Sub-stations, recognition and appointment of one of our sons, Sir Nelson Wali, to the Board of Internal Revenue in the state, the secured, peaceful and enabling environment, construction of Atali Civic Centre and empowerment of our women in various skills acquisition programmes, among others.”

    While commenting on the giant strides of Amaechi-led administration thus far, Mrs. Ibim Semenitari, Commissioner for Information, noted that: “The administration, policy on infrastructure has been robust as government has completed 90 per cent of the Phase1A of the Rivers State Monorail…Now Rivers is open for business.”

    Expectedly, while situating some of the laudable socio-economic developments in his domain, Governor Amaechi during a state-wide broadcast recently recalled that the modest achievements recorded under his administration thus far is a fulfillment of electoral promises he made seven years ago when he assumed office as the Chief Executive Officer of the famed Garden City.

    Going down memory lane, Governor Amaechi recalled: “When we came to office in October, 2007, we committed ourselves to building a Rivers State of possibilities where none will be discriminated against. We set for ourselves a target and a goal to leave our state better than we found it. It was, indeed, a big challenge but seven years after, we can present a commendable score sheet to the Glory of God.”

    Upbeat, Amaechi noted that at the dawn of his administration, the state was confronting the pressing issue of insecurity, a monster that remained intractable for years.

    “We lost our dignity as armed gangs roamed our streets, maimed and killed our children and relations at will. Their armed leaders became our lords and masters. They were law unto themselves. The first casualty was our life, then the economy of our state, then, our hope of giving our children a better tomorrow seemed bleak. Protected by their arms, our children became conscripts in a war they never triggered. Weeping parents, disembowelled and dismembered bodies littered our communities and waterfronts. We knew as a government that we had a responsibility to protect lives and properties. We were clear in our minds that we owed it to you the electorate to fulfill our oath of office. We were not going to let any challenge hinder us. So we chose to confront the criminals who had stolen our peace. Not because we were strong, but because we loved our people. We chased them, not with arms and ammunitions, but with bravery and the boldness of our fathers. We soon made our streets safe again, life returned to our biggest city, Port Harcourt, and our communities. Our economy again began to blossom and those investors chased away began a return to our state. Today, our State thrives as Nigeria’s second biggest economy.”

    Like the proverbial phoenix which has the capacity to rise from its ashes, Rivers State, to many analysts who have watched keenly the flurry of economic activities in the past few years, has come to signpost for many the birth of a new hope and world of possibilities.

    Even though this truth is self-evident, the state government rather being complacent still has its hands on the plough as it is not resting on its oars at all.

  • Ebola, insurgency reduce economic growth rate by 0.5%

    Ebola, insurgency reduce economic growth rate by 0.5%

    Minister of Finance/Coordinating Minister for the Economy, Dr. Ngozi Okonjo-Iweala, has said that the country’s projected economic growth rate for this year would reduce by 0.5 per cent due to adverse effects of Ebola disease and Boko Haram’s attacks.

    Speaking in Lagos after meeting with the Global Chief Executive Officer of Unilever Plc, Mr. Paul Polman, the Minister said: “We have discounted our growth by a half percentage point this year, part of that includes consideration for Ebola.”

     The half a percentage point reduction in our economic growth includes the effect of Boko Haram. “We have discounted the effect of terrorism in the North East,” she added.The Minister said though the nation’s growth rate has been discounted by a half percentage point this year, “We are still projecting to grow around 6.5 per cent. We would have grown at about seven per cent.”

    She assured that government would continue to monitor the situation to determine if it would have further impact on the economy.She also said that government had instituted a team led by the Chief Economic Adviser to continue monitoring the impact of the Ebola virus disease on the economy.

    “We have not finished. We are still monitoring. We have a little team, chaired by the Chief Economic Adviser that is working on the impact of Ebola now. So far, what you have seen is not having that big an impact but we are still monitoring. You know it is not over, and if need be, if we see a further impact, we will announce it and we will do further work to see what further impact it will have on the growth rate.”

    Now, we have to look at Ebola very carefully because we have 19 cases; and out of these we have seven deaths and 11 recoveries. We are monitoring some people in Port Harcourt area as you have heard from the Minister of Health. We believe that the way we have been managing this has contained it. And so, largely, people have gone about their business activities in the economy.”

    You know our economy is largely driven by internal consumption. That is why we are not thinking that it would have quite a large impact. But there would be some impact, you can see that hotel occupancy rates are down and some business meetings have been postponed by people from outside. “So, we are taking that into account. So far, half a percentage point is largely for terror and a little bit for Ebola. But the impact is not that much,” she stated.

    The Finance Minister explained that the visit of the Unilever CEO to Nigeria was a testament to the fact that the country was safe for businessmen, adding that the visit “is one more of an endorsement from the international community.” She commended the company for donating  750 cases of their premium soap, lifebuoy to inculcate the culture of cleanliness and personal hygiene on the public.Earlier in his remarks, the visiting Unilever CEO to Nigeria, Mr. Polman stated that Unilever would invest $200m in Nigeria and inaugurate one of its new facilities in the country in October.

    “We have invested 50 per cent of our turnover in the last three years in Nigeria. That is probably an investment that any company will not be able to support on a long-term but we are able to do that because of our global scale and commitment to Nigeria.”We feel this is the right time to increase our presence in Nigeria.

    Our growth potentials are accelerating and we think that a lot of potential are actually being unlocked right now. I know Ebola itself might take 0.5 per cent of the economy as the minister has shared with me, but we should not forget that despite the threat that the country has faced here and there, you were able to curtail this horrible disease. The investment climate has continued to be very attractive. There are not so many countries in the world that have 6.54 per cent growth, not even in Africa,” Polma stated.

    He noted that the Nigerian market is half of the African and even global business. “The huge population is a plus for a discerning investor. Because of our belief in the current reforms, we have also attracted five of our major suppliers to invest locally. A radical reduction in the cost of energy provision through the unbundling of the sector will make our products more competitive and manufacturing process more efficient. We believe in this country having been here for 91 years and will do our best to help it grow in a sustainable way,” he said.

    The Unilever boss encouraged other multinationals to invest in the country, noting that for a population of 170 million people very few countries globally can boast of that population figure.

  • Nigeria’s economic risks heighten, says Standard & Poor’s

    Nigeria’s economic risks heighten, says Standard & Poor’s

    Nigeria’s economic risks have increased in recent months and there are credible concerns to warrant a downgrade of the country’s rating, Standard & Poor’s, has said.

    In its latest review of sub-Saharan African economies, titled, ‘Sub-Saharan Africa Sovereign Rating Trends Mid-Year 2014,’ the global rating agency outlined concerns over Nigeria’s heightened political and institutional risks.

    According to the report, Nigeria still faces major challenge of credit quality in spite of its new status as Africa’s largest economy.

    It said the downgrade of Nigeria’s rating from stable to negative reflected the agency’s view that risks to the country’s ratings have increased.

    The report pointed out that tensions within Nigeria’s ruling party have heightened political and institutional risks citing the ruling Peoples Democratic Party (PDP) internal crisis.

    It added that extensive oil theft and installation shutdowns in the Niger Delta have seen oil production fall below levels the government assumed in its 2013 budget and 2014 budget plan, while fiscal buffers in the excess crude account (ECA) have been drawndown over the last year.

    “We also believe the possibility of increased political influence on the central bank’s management could hamper progress in banking sector regulation and supervision. In addition to these three main elements, the threat from the terrorist group, Boko Haram, continues to be significant and is extending beyond the northeast, despite military and diplomatic efforts,” the report stated.

    Standard & Poor’s (S & P) noted that while Nigeria overtook South Africa to become Africa’s largest economy after it rebased its GDP in April, the rebasing on its own might not improve Nigeria’s credit quality in the near term given the challenges the national economy still faces.

    Nigeria’s National Bureau of Statistics (NBS) rebased the country’s GDP by using new data sources, definitions, and methods, which saw more industries included and gave a higher weighting to certain sectors, especially in services such as finance and telecommunications. Under this new methodology, Nigerian GDP for 2013 increased from about $270 billion to about $510 billion, substantially larger than South Africa’s$351 billion.

    The report also cited South Africa as another country with higher risks given its ongoing lackluster growth against a backdrop of relatively high current account deficits and rising general government debt.

  • ‘Ex-NIM chief urges govt to solve economic problem’

    ‘Ex-NIM chief urges govt to solve economic problem’

    A former President of the Nigerian Institute of Management (NIM), Dr Lugard Aimiuwu, yesterday advised the Federal Government to profer urgent solutions to its economic challenges.

    He spoke at the NIM Chartered’s 2014 Centenary Distinguished Management Lecture with the theme: “Resetting Nigeria: Applying Transformational Disciplines” in Abuja.

    His wordse said: “More than ever before, Nigeria needs an urgent solution to the many leadership challenges besetting it which are threatening the nation’s economic, infrastructural and ethical revolution and the role of the transformation in making these lofty ideals realisable cannot be over emphasized.

    “The nation urgently needs vibrant, proactive and people-oriented transformational policies to stimulate visible and sustainable development in the critical sectors of national development.”

    He urged Nigerian leaders to utilise the opportunity presented by world powers to better the lives of its citizenry.

    The expert said:”The world is interconnected, interdependent, and competitive. Globalisation has raised the stakes, and is increasingly intolerant of failure. You cannot expect those who cannot handle a pole to do well at pole vault. The globe is now technically one market, and this market waits for no-one.

    “It takes leadership awareness to know that things are not alright under his watch. It takes sensitivity to want to do something about it. It takes professionalism to know what to do about it. It takes wisdom to know how to rein in the forces against change. It takes courage to get the job done.”

  • India expects faster economic growth

    India’s economy will improve this fiscal year, the government predicted on Wednesday, as a gradual increase in investment helps revive activity, although high inflation and political rumblings in other countries pose hurdles to a strong recovery.

    The South Asian economy is expected to grow closer to the lower end of a 5.4 per cent-to-5.9 per cent band forecast for the current year, according to a survey, which essentially is a review of the economy conducted by the finance ministry. It grew 4.7 per cent in the year ended March 31.

    The government said factors such as “institutional reforms to quicken implementation of large projects and a stronger-than-expected recovery in advanced economies would help the Indian economy clock a higher rate of growth.” However, inflation is expected to moderate only by the end of 2014, the government said, adding that India could also face economic pressures due to prospects of below-normal rainfall this year, which could hurt agricultural output and contribute to food-price inflation.

    The government didn’t provide inflation projections. Most recent data show consumer inflation was at 8.28 per cent in May. That is well above the six per cent level that India’s central bank would like to hit by January 2016.

    The government also gave indications of better fiscal management, promising fresh regulations aimed at providing more transparent policies with the “teeth” to strictly enforce fiscal-deficit milestones set out for the government.

    India in the past enacted a law setting fiscal-deficit targets for the government. Those targets were abandoned by the previous government as it increased social-sector spending.

    After growing as much as nine per cent in 2011, India’s economy slowed sharply to less than fivre per cent growth in the past couple of years. High inflation sapped consumer demand, while both foreign and domestic corporate investment weakened.

    Earlier this year, the Bharatiya Janata Party won national elections in a landslide. The party’s leader and India’s new prime minister, Narendra Modi, have promised to make it easier for businesses to operate and open up more sectors of the economy to foreign investment.

    The government has already drawn up plans to allow greater foreign ownership in local defense and insurance ventures. On Tuesday, it announced plans to seek foreign investment for developing the country’s railway network, following up on last month’s sharp increases in railway passenger fares and freight rates aimed at boosting revenue.

    Investors are now watching for the federal budget to be announced Thursday for fresh policy moves to encourage an ailing manufacturing sector, increase infrastructure investment and simplify tax policies.

    There is also the possibility that the new budget includes measures to reduce government subsidies. Such measures could prove to be politically unpopular, although the government report said: “Addressing the key fiscal risk of food, fertilizer and petroleum subsidies is critical for achieving better quality fiscal marksmanship.”

    “The survey presents a realistic assessment of the national economic situation,” said Sidharth Birla, president of the Federation of Indian Chambers of Commerce and Industry.

    “We would look for specific proposals in the budget on further subsidy rationalisation.”