Tag: Economics

  • Economics and Genocide

    The Road to Zango Katakata

    There is a strong nexus between economics and genocide. In almost all its horrific instances, genocide seems to occur in circumstances of famine, rising economic miseries, the struggle for space in stifling enclaves and brutal lack of opportunity .Throughout the history of humanity, the struggle for economic primacy is often cloaked as political and religious contention.

    Genocide can be state directed, that is when a terminally ailing state looks for scapegoats for its failure among its own citizenry. Or it can be society inspired when rising economic misery combines with real and imagined injuries to whip a people towards the mass elimination of fellow citizens. It can also be a combination of the two, a situation in which the state actively encourages its hegemonic citizenry to do the needful.

    In a book titled, Hitler’s Willing Executioners, Daniel Goldhagen provides massive compelling documentation to show how the virus of anti-Semitism had already infected the entire German high society rather than being just an eccentric obsession of Hitler’s state.

    Goldhagen argues that rather than being coy accomplices, virtually all Germans were willing participants in mass extermination. But since virtually all of European societies, at one point or another, exhibited strong anti-Semitic sentiments, it ought to be an object of historic curiosity that it was only in Germany that this resentment boiled over to outright genocide.

    The Ottoman Turkish genocide of the Armenians was a direct response of the emergent Turkish military warlords to looming state collapse and the end of the Ottoman Empire. The founder of modern Turkey, Mustapha Kemal Ataturk, did not wait for the victorious Allied powers before carving out a new nation from the rump of the dying Empire. The unfortunate Armenians who found themselves trapped in the Turkish enclave were summarily exterminated.

    Just as it happened in Hitler’s Germany, the genocide of the Tutsi people in both Rwanda and Burundi was state-directed and elite-inspired. In both countries, and particularly in Rwanda, rising economic insecurities spawned by rapidly expanding population and disappearing arable lands in a narrow strip led to an apocalyptic meltdown which became the shame of modern civilization.

    Yet in both countries, both the Hutu and Twa populace had for several centuries lived in peaceful and prosperous coexistence with their Tutsi overlords until the grim economics of mutual tolerance no longer added up. Indeed such was the level of peaceful cohabitation that the term Hutu was becoming an economic rather than a racial category. There was a ritual ceremony known as Kwahutura, or shedding of Hutu identity, which was a function of how many cows owned rather than ethnic origin.

    It is useful to point out that in an equally landlocked country but one with a vaster landmass and more prosperous economy like Uganda, there is also a sizable Tutsi population. But there has never been genocide in Uganda. The ethnic population is better mixed and diversified. Although the Tutsi are treated with respect and reverence as a result of their royal and aristocratic antecedents, it has never translated into an electoral overlordship. Idi Amin Dada, the crude and syphilitic Nubian crackpot, actually wanted to marry the charming and delectable Princess Elizabeth of Toro.

    It is the time of Zango katakata in Nigeria, if filtering reports from Oke Ogun are to be believed. There is an economic, political and spiritual nexus to the grave security challenges currently facing Nigeria which makes the country a prime candidate for genocide or an ethnic apocalypse. That is if care is not taken and the right choices not made by an errant political class.

    Advancing desertification in the north which has eaten up both arable and grazing land, rising economic insecurities fuelled by grave incompetence and mismanagement, have spawned a vast and restive Nigerian underclass. All this coupled with the sheer incompatibility of a feudal mode of economic and political production with the dictates of a modern nation-state appear to be snowballing into a major conundrum for a tottering nation.

    In the event, the herdsmen have turned their attention southward causing sheer mayhem and bloodbath where they encounter stiff resistance, particularly in the buffer zones of ethnic coexistence. Having discovered that kidnapping and banditry are far more lucrative than cattle-rearing, they have promptly forgotten about grazing routes and cattle colonies otherwise known as Zango. Who cares about a Zango when there is an Ango to be captured?

    The result is that vast tracts of the nation have either become no-go areas or have suffered severe elite depopulation. According to reports, huge swathes of Zamfara State are unsurveyed and unsurveillable; a classic case of disembodied and disarticulated territoriality. In plain terms, it means that many areas of the nation are continuously unmapped and therefore ungovernable havens for criminal enterprise.

    The heavy presence of undocumented and uncaptured Fulani herdsmen in several forests of the South West has led to a mild form of elite neurosis and hysteria with shrill cries of “fulanization” and Islamization.  Except for propaganda purposes, we must learn to separate the two for the sake of analytical and ideological clarity.

    While one cannot lightly dismiss this claim judging from the quarters they are coming from, honesty and sincerity demand that we acknowledge that the Yoruba people for centuries have conducted cultural, economic and mercantilist transactions with their far-northern neighbours. Being an essentially sedentary civilization, the Yoruba nation is more likely to feel the impact of unequal exchange as against the nomadic outreach of its competitors.

    However, it is only in recent times that the phenomenon of armed Fulani militia has become a haunting and troubling reality in Yorubaland. Despite their pervasive presence and the freewheeling anarchy occasioned by this, there is no clear-cut evidence that this is a structured and coordinated armed invasion. On the contrary, and going by the preceding analysis, it may well be that the armed militiamen are responding to the imploding and abhorrent social conditions in their region, a clear case of one region infecting another with its social anomalies.

    The Yoruba culture and civilization are too strong and secure to be summarily suborned and overwhelmed by armed conquest. When the handshake gets beyond the elbow, the Yoruba people and their leadership, that is they have not been overtaken by the law and logic of Asabiya, will know what to do and without any grandstanding or ostentatious sabre-rattling. This is not the time to seek political profit from the miseries of a nation.

    What seems to have got through to a section of Southern and even Northern minority leadership, and rightly so, is what is known as ethnic memory of political evil which often predisposes elites to partisan rancour and total lack of objectivity. Bishop Matthew Hassan Kukah and many others often allude to the harrowing experience of their people in the hands of their Fulani overlordship. These cruel indignities are often burnt deep into the political consciousness.

    The hubristic indiscretions of Sir Ahmadu Bello and the hegemonic swashbuckling of many contemporary northern leaders have not helped matters. In a modern nation-state, it amounts to an anomalous grandstanding for the elite of a particular section to claim the divine right to perpetual leadership or for its leader to aver that the nation is the estate of his great grandfather.

    This is where the threat of ISWA and its relentless and perverse drive for Islamization is a far more potent danger to Nigeria’s survival and ethnic harmony than the threat of Fulanization.  It is a well-known fact that the militant Islamic Brotherhood has no truck with the paradigm of the nation-state or its claim to territorial sanctity.

    Having been dislodged from the Middle East where it attempted to establish a trans-national Islamic state which completely redrew the map of the place, the rogue sect has apparently journeyed through the open corridor of the Maghreb to contemporary Nigeria. If this is true and the Southern Nigerian forests are already infested by well-armed and well-trained Islamic militants, then the Nigerian post-colonial state has entered a phase of critical emergency.

    This is where the international intervention alluded to by General Obasanjo in his recent broadside from the pulpit may become a fait accompli and not just a troubled prognostication. The international community will not sit idly by and watch the militant brotherhood establish a foothold in the south of Nigeria. Even neophytes of the global order ought to realize this. In all likelihood and if care is not taken, Nigeria is likely to be turned into an international battleground with the horrific carnage of Syria a child’s play.

    This time around, even far more than his first coming, the retired general from Daura has his work cut out for him.  He must seek out an urgent economic solution to the looming social implosion in the north and a swift military solution to the spate of banditry and kidnapping throughout the nation. He must also seek a national dialogue on the best political configuration for a multi-ethnic nation prone to centrifugal forces.

    The languid and listless nature of the opening moves on the political chessboard does not suggest an acute awareness of the critical nature of the dangers posed to the country. But if the president cannot see far into the hazy horizon, the empty chairs of significant absentees at his second inauguration on Thursday ought to alert him of the extent of political disaffection within the ruling caste.

    General Buhari’s core supporters may see as this as the ultimate triumph of people’s power. Nothing can be more delusional than this arrant nonsense. To push through some of the political, economic and security reforms needed to rescue Nigeria from the jaws of tragedy requires substantial elite consensus and efforts of a truly bipartisan nature. In his second coming, having seen his moral authority wane and wither in the crucible of partisan politics, much will depend on Buhari’s mastery of pragmatic politics and capacity for ruthless realpolitik.

    Let us end with a series of global paradoxes which reflects the nexus between economics and genocide and how nations can get it wrong. Despite the pogrom of the Armenians and the cosmetic modernizing bravura, the militarist state left behind by Ataturk has not delivered the best economic and political dividends in the region. That distinction goes to the United Arab Emirate and its unique blend of monarchism and modernity.

    Twenty three years after the Rwanda genocide, the country is still ruled by Tutsi elites who retained the discipline, order and cohesion to pick up the pieces after central governance disintegrated.  The authoritarian excesses notwithstanding, post-genocide Rwanda is one of the rare economic success stories of post-colonial Africa.

    As for the Germans, they finally learnt their lesson that the world does not owe them a lebensraum, or living space—having exhausted themselves and pretty much the rest of the world in the process. Despite their discipline, their thoroughness and capacity for hard work, the Germans were hardly well-served by their leading philosophers, historians and cultural figures that instilled in them notions of Aryan superiority and German Exceptionalism.

    It was a compensatory mechanism for historic backwardness, their continental neighbours and English cousins having stolen a march on them in the struggle for political and economic modernity. But once it became obvious to them that what they needed was a rapid modernization of their economic and political institutions and not aggressive land-grabbing, the Germans have never looked back. Today, Germany’s enlightened leadership is at the frontiers of global racial integration while their rivals are struggling with xenophobia and right wing retrogression.

    There is a lot to take away from this engrossing drama of national possibilities. Once a nation’s leadership has proved constitutionally incapable of making the right choices, their people are sentenced to long spells of economic, political, intellectual and spiritual miseries.

     

  • Economics of graven images

    No matter how small a totem might be, it must be hefted with both hands, ancient sages had long proclaimed. Even the holy scripture seems to corroborate the fact of the power and authority of deities. The history of the Israelites of the Old Testament Bible is practically undergirded by the presence of the Ark of the Covenant.

    The Ark, which first appeared in Exodus when Moses received the tablets of the Ten Commandments from Mount Sinai still remains perhaps the most revered symbol of divine manifestation. Chronicles 13:9  records: “And when they came to Chidon’s threshing floor, Uzza put out his hand to hold the ark, for the oxen stumbled. Then the anger of the Lord aroused against Uzza, and he struck him because he put his hand to the ark; and he died there before God.”

    The ark had been retrieved from its captors and was being ferried home in a new cart. Uzza and Ahio drove the cart. This is just one example of the power and aura of that symbol of God’s physical presence among his people, in the days of yore. The tales of exploits as recorded in the Bible are numerous.

    What is all this mysticism about? A story on page 10 of The Nation January 9, 2019 elicits Hardball’s excursion into the realms of gods and deities. The headline states: “Ataoja denies selling Osun Osogbo goddess.” Let us note upfront that Osun Osogbo shrine in Osun State and the accompany ceremonies and annual festivals arguably present the biggest and most preeminent traditional and cultural signatures not only of Osun State but Nigeria as a whole.

    The Osun Osogbo shrine was manned and curated by a certain Susanne Wenger, Adunni Olosa, an Austrian woman (now demised) who apparently answered the call of the ancient grove and dedicated her life to the goddess.

    How then could this important goddess become an object of lurid shenanigans and banditry even? A certain Iyanda Adigun, said to be a sacked Osun Priest had alleged that the Osun goddess had been sold for N15 million. According to Adigun, the totem is stuck in Togo, en route to Germany. He claims to be making efforts to retrieve it.

    It is noteworthy that it took the coming of Ms Wenger to reclaim the Osun grove in the 1950s from land grabbers and desecrators. And by her vision and drive, the grove became a UNESCO Heritage site and the festival an international showpiece.

    Could it be that by her passing a few years ago, Osun Osogbo is once again heading south?

    And Hardball posits that instead of selling the goddess, we could explore the economics of graven images through making of replicas and artifacts.

  • Kogi Varsity Students decry delay in result collation

    Students of Kogi State University have expressed their grievances toward the delay in the compilation and releasing of result as at when due in the institution.

    While it is the dream of every student to see the dividend for hard work via a well-defined system that will further facilitate a sense of development in line with the sound academic life of the learners, the current system of education in Kogi State University have failed to bring such dream to fruition occasioned by a beehive of hitches experienced in the collation of terminal results among other excesses that has devalued the system since 2016.

    The above issue has led students in  some departments such as Mass Communication, Economics, and all the departments in the Faculty of Education (aside Library and Information Science)  who graduated January last year to be ostracize from  the recent mobilization for the compulsory one year national youth service .

    Some of the students who spoke with CAMPUSLIFE expressed their displeasure in the malady that is impeding on the progress of the institution. The students urged the management to put a nip in the bud by doing the needful.

    A Law graduate who identified himself as Premium Prime urged the management to do something fast about the issue.

    “I pray they do something fast about this. Law program of five years turned out to be Six  years instead, courtesy of strikes and related issues and after graduation here were are, no Law school no NYSC till now…just tired of everything” he said.

    Read Also: Kogi varsity gets N500m for courses’ accreditation

    Jeff Friday,  a 400 level  political science student the CEO of the student Facebook page also lend his voice on the issue, describing it as pathetic. “I am in 400 level but have seen just 100 level result, and is so pathetic. The management appeared nonplussed, leaving the students at their mercy.

    “The worst part is that those guys coming to ask us to vote for them for SUG are going to represent their own personal interest without standing firm to address some of these key issues affecting the students,” he said.

    In tandem with Friday submission, Omale Musa Usman, an alumnus of the school who spoke with CAMPUSLIFE  faulted the lapses experienced in the system on the inability of the Student Union Government to address the issue as at when due.

    According to him, “To have this whole issue resolved and settled, we need a credible SUG president who can stand for the students and fight for the interest of the students. “And if the school failed management fails to conduct the SUG election this time around then it will be left for all the departmental presidents to stand up and speak for the students they are representing.

    Also, a yet  to be mobilized  Mass Communication graduate who who identified himself Bidemi Ibiyanmi, said Trying to explain to friends and family why you haven’t seen your results or haven’t been mobilized for the NYSC is tougher than awaiting the results itself.

    Ibiyanmi clamored for more professional hands in the system so as to fast track the whole process. “I think it’s due to the school management inability to discharge her duty. More also, they lack adequate advancement in technology, because, some departments claim that the results were delayed because the system cracked down without a backup.

    Meanwhile, in a recent interview with one of the staff of the school who craves anonymity revealed that the school management is seriously working hard to see to the end of these lapses its system.

    “The management has been seriously working to ensure that this whole issue is nip to the bud. We are experiencing little hitches in the system because of the method adopted in terms of collation of results which is a bit slow but efforts have been made to see that all things are put in place to ensure that the terminal results are released on time.”

  • DELSU expels Four, rusticates 26 for alleged Examination Malpractices

    Delta State University (DELSU) has expelled four of its students, rusticated 26 and placed four others on indefinite suspension.

    This action of the university was contained in a special edition of the bulletin issued by the Department of Information and Public Relations, Vice Chancellor’s office, on Tuesday 5th June, 2018.

    According to the bulletin, the affected students were sanctioned for their alleged involvement in various examination malpractices.

    The Nation gathered some of those affected are the departmental presidents of Mass Communication, Economics, Political Science, Sociology, Business Administration and Geography and Regional Planning departments.

    However, in a swift reaction to the development, some of the affected students, when contacted, alleged that they were, indeed, being victimized by the management of the Faculty of Social Sciences for daring to raise questions over alleged misappropriation of hundreds of thousands of students’ dues.

    Read Also: DELSU final year student commits suicide

    A source in one of the departments who spoke on conditions of anonymity, said revealed “when the presidents of the respective departments noticed the way and manner the faculty president single handedly disbursed over N700, 000 for the conduct of a welcome party for 100 level students without the constitutional backing, they passed a vote of no confidence on him during congress which he (faculty president) boycotted.

    “While the congress was going on, the staff adviser stormed the venue demanding who authorized the congress and threatened that they would hear from him.

    “Days later, the departmental presidents were accused of plots to destabilize the peace of the university and summoned to face a panel which they did only for a bulletin to be released today stating that they have been rusticated for two semesters respectively”, the source said.

    Describing the defense of the students as an afterthought, the Public Relations Officer of the institution, Freeborn Aganbi said “students who are saying that are doing so to cover up for their exam malpractice. The management of the university is not interested in victimizing or punishing any student”.

  • Faculty elects leaders

    A 300-Level Economics student, Joseph Augustine, has been elected president of the Faculty of Arts and Social Sciences of the Federal University, Lokoja (FUL) in Kogi State. The keenly-contested election was held at the school’s main campus in Adankolo.

    Joseph garnered 491 votes to defeat his main challenger, Dominic Odogwu, of the Department of Political Science, who scored 408 votes.

    Joseph described his victory as divine, appreciating his colleagues for their confidence in him. He hailed students for their maturity, assuring that he would not disappoint them

    The president-elect also praised his opponent for displaying maturity being the first person to congratulate him. Joseph described Dominic as “an exemplary individual” with good character.

    He said: “I am committed to my vision of making the lives of students better, and because of my belief that everyone has something to offer, I will do my best to carry all students along on this journey.”

    Dominic thanked his supporters for standing by him in defeat. He urged them to support Joseph in moving the association forward.

  • Economics meets mindset

    A mindset is an abstract concept but worry not, Hardball can draw a picture of this so-called mindset for you. Here we go: you know concrete, you know cement and you know iron rods? Now mix the three with some water and leave to dry to form slabs. Dear reader, this outcome, this impregnable, immovable dead weight is the closest picture you can get of a mindset.

    Economics too, not unlike a mindset, is also largely abstract – a wooly and unruly body of study with an incontinent knack for prevarication. Again, Hardball comes to the rescue here: since there is no economics without money (not minding what experts might say) Hardball hereby impetuously boils down economics to money; in fact, cash.

    Now, when economics meets (Hardball would prefer mates) mindset what do you get? A roadblock to be mild but to put it starkly, what is conceived is simply a block. This of course, is a more severe consequence for those who might know.

    This captures the impression one got when it was reported recently that government is not interested in funding aircraft repair facility. It was the Minister of State for Aviation, Hadi Sirica, who let it out last week when he addressed stakeholders in an aviation roundtable in Lagos. To be fair, he injected a caveat to the effect that while government would support private investors who seek to build such critical facilities, government would not sink its fund directly.

    Sound economics, but one could hear the grate in the minister’s statement. The facility in question is known as aircraft maintenance Repairs Overhaul (MRO); which is self-explicatory. But Minister Sirica shed even more light on the crucial urgency of the MRO. He said such facilities have become imperative to create jobs for local aviation professionals as well as contribute to the Gross Domestic Product (GDP), in addition to curbing capital flight.

    What this betokens is that hundreds of aircraft both for local and foreign operators must go abroad for their MROs. Consider the huge of revenues from the long line of values inherent in having a couple of these facilities across our major airports.

    And the next logical question is: why does the minister make it seem as if government would be doing private investors a favour if they were allowed to set up these facilities?

    Instead of waiting coolly for the so-called investors to come applying and begging, one would have expected the ministry to have done diligence, drawn policy framework; set targets and timelines and call for bids from all over the world. This is a global facility after all.

    The same mindset afflicts the hoisting of our flag in the air by way of a national career: no fund, time is not right, etc are the excuses while we have not done our own bit in many such projects that will cost us almost nothing but give the economy a huge boost.

    MRO: let us close with a stakeholder’s verdict: the biggest problem to setting up an MRO is lack of government’s policy. Mindset jams economics!

  • Why economics makes Hardball squeamish

    Law we know, apothecary we remember, even usury. But whoever introduced economics into the life of man? Hardball would want to wager that since this imprecise double-speak known as economics was foisted upon modern man, since then were his woes compounded beyond measure.

    Economics as a course of study or body of knowledge is akin to a thick forest. No, it is akin to a Nigerian forest – read Sambisa – uncharted, overgrown, darkly and harbouring myriads of gnomes and ghouls. Apart from the denizens of the forest, there are hardly known entrances or exits. Economics, like an ancient forest, is a shroud in the vicinity of a shrine.

    Why is Hardball taking this hard if not semi-literate stance against one of man noblest inventions and callings? You would ask. And you might add that just because he is incapable of grasping the intricate loops of economics and the arcana of microeconomics does not invalidate what is perhaps mankind’s most exciting exertion.

    Well then, let’s look at Nigeria’s foreign currency policy today as a case study of how economics work.

    First, Nigeria’s currency, the naira started to crash rapidly last year against major foreign currencies as the prices of crude oil crashed. This stands to reason as oil sales is Nigeria’s major source of foreign exchange. Conversely, Nigeria is an import-dependent country. Most of her foreign exchange earnings she dexteriously hands back as she ships in all manner of things including food and the entire contents of the White man’s junkyards.

    Now, economics as Hardball understands it is that we do not have enough forex to continue our jamboree of yesterday. It means naira should simply exchange according to its market value against other currencies. Instead government tried to artificially prop the naira against other currencies.

    To illustrate, it is like a poor man trying to live up to the standards of his very rich neighbour. Sooner he finds out that he cannot sustain that for long without getting into serious trouble.

    This is what has happened to the naira since the crash of crude oil prices. It was inevitable that the value of the naira would have to fall accordingly in the short run while government shores up productivity. But, the Federal Government chose to hold up the naira and inadvertently, holding up the economy to the point of a near-recession.

    But, here is how a frazzled Central Bank of Nigeria (CBN) Governor Godwin Emefiele captured it after the meeting of the Monetary Policy Committee (MPC) last week: “MPC in its assessment of the relevant risk profiles came to the conclusion that although the balance of risks remains tilted against growth; previous decisions need time to crystallize. Consequently, in a period of stagflation, the policy options are very limited.” If this is not jargon…         

    Hardball’s interpretation in simple English: The naira is now free to seek its level in the market.

    With low crude oil price, high petrol pump price and a floating naira, Nigerians are in for a long night. And unless government seriously pursues diversification, economic jargons we shall have for supper.

  • The politics and economics of Sanusi’s intervention

    The politics and economics of Sanusi’s intervention

    • Continued from Octomber 29

    Belatedly, the emir blames the slow GDP growth of the first half of 2015 on the CBN’s refusal to devalue the naira. Yet, in making this statement, he willfully ignores several facts. First, Nigeria is dealing with a set of exogenous shocks, including the sharp decline in oil prices, the slowdown in global growth (which means less imports from Nigeria), and the geopolitical tensions along important trading routes around the world, which has also significantly lowered prospects for global growth. In recognition of these shocks, the IMF recently reduced its forecast of global growth in 2015 from 3.5 per cent to 3.1 per cent. Every country in the world has slowed down markedly, and Nigeria is not an island of its own. How then can one simply blame Nigeria’s slow growth on the value of the naira while ignoring the fact that the government is losing more than 50 per cent of its revenues as a result of falling oil prices?

    But, if devaluation were the simple answer, let us consider what has happened to comparable countries that allowed a full depreciation of their currencies during the last several months. For example, Ghana, Russia, Zambia, and Brazil have all allowed depreciations of their currencies to the tune of 27 per cent, 40 per cent, 45 per cent, and 42 per cent, respectively. Yet, Brazil and Russia are in recession. In fact, analysts now expect Brazil’s GDP to shrink to 0.8 per cent in 2016. In Ghana, the latest growth rate is less than one per cent while Zambia just declared a National Day of Prayer because of slow growth! What is clear from these countries is that depreciation is not a silver bullet to the economic challenges that we are facing today. To accurately interrogate these issues require much greater analytical depth than is being shown these days.

    Similarly, the assertion that the demand management policy of the CBN has deprived certain industries of critical imports ignores the fact that these are the same policies that have helped the country become self-sufficient and a net exporter in cement and other areas. Today, cement imports would have been costing Nigeria about $3 billion yearly.

    That comment also ignores the fact that most manufacturers of the 41 items restricted from accessing forex are witnessing tremendous increase in demands for their products. For instance, Erisco Foods (manufacturers of tomato paste), GZ (manufacturers of aluminum cans), Obasanjo Farms, and the association of cold-rolled steel manufacturers of Nigeria have all reported significant increase in sales and are already employing much more Nigerians and expanding their operations to meet with the demand.

    What is the “essential raw materials” for the production of items like tomato, palm oil, toothpicks, rice, cement, margarine, vegetable oil, poultry products, chicken, wooden doors, furniture, clothes, and table wares? We have no choice other than to revitalise and encourage the growth of local industry. Not too long ago, Nigeria used to control 40 per cent of the global palm oil market but today, we spend billions importing palm oil yearly, while Malaysia and Indonesia control 80 per cent of the global palm oil market. This is clearly not the way to go and we must not allow personal interests to becloud our sense of objectivity.

    The emir also incorrectly stated that the central bank is currently “pursuing tight monetary policies” and that “it is time to loosen monetary policy”.  At the last Monetary Policy Committee (MPC) meeting of the CBN, the Cash Reserve Requirement (CRR) was reduced from 31 per cent to 25 per cent. And owing to the policies of the CBN, the interbank interest rate has crashed to a five-year low of 0.8 per cent and both lending and deposit rates are falling accordingly. The truth, therefore, is that monetary policy is already loosening significantly. The Nigerian banking system is awash with both naira and dollars and there is no sound economic basis to call for a further slackening, especially in the face of rising inflation.

    While the emir’s declaration that “portfolios flows are gone” is true, he presented it as if their exit is a result of flawed policies in Nigeria. However, it is a global phenomenon.  According to a recent report by London’s Financial Times, portfolio outflows from emerging market countries, including Nigeria, in the third quarter of 2015 has been the worst since the 2008 global financial crisis. Portfolio investors from emerging market countries have offloaded an estimated $40 billion worth of securities.

    Everyone knows that portfolio investors settle their fears on their side of caution, and as such, once commodity prices start to fall, they quickly pull their resources out of commodity-exporting countries. Besides, there are strong indications that the U.S. Federal Reserve may be raising interest rates sometime later this year. Of course, given the perceived stability and safety of U.S. securities, most portfolio investors prefer such investment and are therefore preparing to invest in the U.S. market once the Federal Reserve raises U.S. interest rates. It is therefore a symptom of intellectual laziness for anyone to simply blame outflows of portfolio investments from Nigeria on the country’s monetary or exchange rate policies.

    One must also highlight the perils for policymakers when everybody pretends to be an expert on the current economic situation facing our country. All through the emir’s four full years as governor of the CBN (2010—2013), the average price of oil was a very healthy $108 per barrel, as against the current average of $52 per barrel. The last time Nigeria was in this situation was in 2005 when the price of oil averaged $55 but with an import bill that was about N148.3 billion per year.  Yet, today, at about the same average oil price of $55 per barrel, estimates from the first nine months of 2015 show the country’s import bill is about N917.6 billion.

    In truth therefore, we have never been in this kind of situation before as a country. Likewise, the emir never experienced this magnitude of exchange rate crisis or foreign reserves pressure and cannot claim to have expert opinions on how it should be resolved. It is unfortunate that the emir who obviously enjoys his status as the darling of the western media is attempting to create the impression that any economic policy of the Buhari government that western “experts” don’t approve of is wrong. If his forays into public discussions is to make simplistic and biased prescriptions to Nigeria’s complicated economic problems, may be, it is time for him to spend much more time thinking about how to create employment and spur real growth in Kano.

    • This is the concluding part of the story published on page 3 of Thursday, October 29 edition.
  • Deaton wins Nobel prize in Economics

    Deaton wins Nobel prize in Economics

    Princeton University’s Angus Deaton yesterday won the Nobel prize in economics for his wide ranging work on consumption that has  helped redefine how poverty is measured around the world, notably in India.

    Deaton, 69, won the eight million Swedish kronor (about $975,000) prize from the Royal Swedish Academy of Sciences for work that the award committee says has had “immense importance for human welfare, not least in poor countries.”

    The Secretary of the award committee, Torsten Persson, said Deaton’s research has “really shown other researchers and international organisations like the World Bank how to go about understanding poverty at the very basic level; so that’s perhaps the finest and most important contribution he has made.”

    Persson singled out Deaton’s work in showing how individual behavior affects the wider economy and that “we cannot understand the whole without understanding what is happening in the miniature economy of our daily choices.”

    Deaton, who was born in Edinburgh, Scotland and holds U.S. and British dual citizenship, said he was delighted to have won the prize and was pleased that the committee decided to award work that concerns the poor people of the world.

    In a press conference following the announcement, Deaton said he expects extreme poverty in the world to continue decreasing but that he isn’t “blindly optimistic.”

    He said there are “tremendous health problems among adults and children in India, where there has been a lot of progress.” He noted that half of the children in the country are “still malnourished” and “for many people in the world, things are very bad indeed.”

    The prize committee said Deaton’s work revolves around three central questions: How do consumers distribute their spending among different goods; how much of society’s income is spent and how much is saved; and how do we best measure and analyze welfare and poverty?

    Committee member Jakob Svensson said Deaton introduced the “Almost Ideal Demand System,” which has become a standard tool used by governments to study what effect a change in economic policy – such as an increase in sales taxes on food – will have on different social groups and how large the subsequent gains or losses will be.

    The Royal Swedish Academy of Sciences also highlighted the model that has become known as the Deaton Paradox, in which he laid bare a contradiction between earlier theory and data on consumer behaviour.

    Ingvild Almas, associate professor at the Norwegian School of Economics, said the Indian government has changed its methodology for measuring poverty thanks to research from the likes of Deaton and that has affected poverty-reduction policies.

    Yesterday’s announcement concludes this year’s presentations of Nobel winners.

    The medicine prize went to three scientists from Japan, the U.S. and China who discovered drugs to fight malaria and other tropical diseases. Japanese and Canadian scientists won the physics prize for discovering that tiny particles called neutrinos have mass and scientists from Sweden, the U.S. and Turkey won the chemistry prize for their research into the way cells repair damaged DNA.

    Belarusian investigative journalist Svetlana Alexievich won the literature award while the peace prize went to The National Dialogue Quartet in Tunisia for its contribution to building democracy in Tunisia following the 2011 Jasmine Revolution.

    The awards will be handed out on Dec. 10, the anniversary of prize founder Alfred Nobel’s death in 1896, at lavish ceremonies in Stockholm and Oslo.

  • MAN canvasses ‘development economics’

    MAN canvasses ‘development economics’

    The Manufacturers Association of Nigeria (MAN) is pushing what it calls development economics as against the unfettered opening of the country  to cheap and sometimes substandard  goods. It said unrestricted access to “our markets promotes unemployment and poverty”.

    NAN President  Dr. Frank Jacobs, responding to a statement credited to  US Assistant Secretary, Bureau of Economic and Business Affairs, Charles H. Revkin, warning Nigeria of the dangers of shutting out foreign competitors, said MAN recognised the  disadvantage the country would be exposed to if it opens up its economy to indiscriminate trade relations with advanced countries.

    “First, the advanced countries would trade capital goods, such as plant and machinery, medical, agricultural machinery, aviation equipment, airplanes, and others while Nigeria would only trade commodity goods, such as cocoa, pepper, sesame seed, among others.

    “The implication will be that while the advanced countries get richer and more industrialised, Nigeria will remain a commodity country and in perpetual de-industrialisation.

    “Trade is important but Nigeria must be cautious to ensure that most of the goods coming into the market are input materials for the productive sectors and not finished consumer goods that will wipe out existing domestic industrial efforts and truncate new industrial initiatives”, he advised.

    He maintained that for Nigeria to sit on the same table with countries such as the United States, Britain, Germany, Japan, China, to appropriate the gains of trade, it must be able to trade industrial goods like the advanced economies.

    Jacobs advised policy makers on the need to look inwards to improve its industrial capacities by insisting on the tenets of the Backward Integration agenda as embedded in the Nigerian Industrial Revolution Plan (NIRP).