The Nation Newspaper

Tag: Economist

  • Osinbajo raises hope for textiles, garments industry in SEZ

    Osinbajo raises hope for textiles, garments industry in SEZ

    The local textiles and garment industry will be revamped at the Special Economic Zones to be created, Vice President Yemi Osinbajo has said.

    According to Osinbajo the Federal Government and private sector will collaborate in creating SEZs, starting first with the textile and garments industry, to spur the nation’s economic development.

    He made the promise during an interaction with selected investors in Davos during the World Economic Forum, according to a statement issued in Abuja by Mr Laolu Akande, his Senior Special Assistant on Media and Publicity.

    Osinbajo said that “having the right mind-set and understanding where we want to go” would affect the implementation process, whilst ensuring things got done in the nation’s business environment.

    He said that the private sector-government collaboration had ensured consistency in the implementation of economic policies.

    The Vice President said he was optimistic about the forthcoming SEZ for garment manufacturing “because it is specific and is something we can measure very quickly’’.

    Osinbajo said that working with investors and allowing them to determine what should be achieved would enable the government to attain set objectives.

    He suggested having labs, where issues around effective implementation plans would be intensely discussed with expert participants drawn from the private sector and public sector.

    The Vice President said such mechanism would also help ensure the realization of objectives as those labs would set up the implementation agenda and see it through to the end.

    Speaking earlier, Sen. Udoma Udoma, the Minister of Budget and National Planning, stressed the advantages for Nigeria to create the SEZ for textile manufacturing.

    He cited the country’s lingua franca, political stability and the provision of enabling environment for the private sector as advantage to investors.

    Udoma remarked that confidence was being restored in the heart of the people regarding economic policies.

    Mr Okey Enelamah, the Minister for Industry, Trade and Investment, described 2018 as a year of implementation.

    Enelamah stressed the need for a continuous active implementation of the ERGP hinged on investment, trade and industrialisation with enabling environment across the spheres.

    A former World Bank Chief Economist, Prof. Justin Lin, said that the garment and textile industry in Nigeria had huge potential.

    He said this was because Nigeria produced cotton, as well as the availability of good locations around the country, including the large domestic and global markets.

    NAN

  • Recession: Economist warns against laxity in implementation of policies

    Recession: Economist warns against laxity in implementation of policies

    An Economist, Prof. Chika Aliyu, has warned stakeholders and players in the economy against laxity in implementing the economic plans and policies to get the country out of recession.

    Aliyu, a researcher in Development Economics at Usman Dan Fodio University, Sokoto,  gave the advice in an interview with the News Agency of Nigeria (NAN) in Abuja on Monday.

    He said stakeholders should be focused in implementing the Economy Recovery and Growth Plan.

    “If there is strong determination, real implementation of the outlined strategies and more economic measures; the country will be out of the recession soon.

    “The time frame fixed can be maintained but if there is any laxity and lukewarm attitude from all stakeholders and players, then the period is likely to go beyond already projected time frame.

    “Our Monetary Policy Committee has to come up with policies to re-strategise the economy.’’
    Aliyu said that the Federal Government should do more to diversify the economy, especially in agriculture and other key sectors.

    “We are in rainy season; people should go into farming, government should inject money and empower people to farm.

    “The more people go into agriculture, the rate of growth of Gross Domestic Product (GDP) will definitely rise and the economy will be out of recession,’’ he said.

    The don, however, said that the recently released GDP report for the first quarter of 2017 had a lot of implication on the economy.

    The National Bureau of Statistics said the nation’s GDP contracted by -0.52 per cent (year-on-year) in real terms in the first quarter.

    The bureau stated that it represented the fifth consecutive quarter of contraction since first quarter of 2016.

    “This has a lot of implication on the economy;  if the recession is on short term, the economy will be picking and correcting itself.

    “It will be picking up and correct itself at least, first quarter, second and up to third quarter, we will be out of recession,’’ he said.

    Aliyu said that what the economy showed now was that more needed to be done because contraction in the GDP indicated that domestic productivity was going down.
    “ The economy is in need of more of diversification; we should turn away from oil and concentrate more on the productivity sector.

    “People should be doing well in other sectors like agriculture, mining, tourism, recreation activities and any area that is productive.

    “If the GDP is improving; economy is recovering very well and speedily, it will stabilise in the near future.
    “It will stabilise in future but if it is reversing and going back; this is not good for the economy.

    “It signals that more needs to be done and the areas already projected for the recession to end may spill over and go beyond the time limit already projected,’’ he said.

     

  • Economist hails MTN’s resilience

    Renowned economist Bismarck Rewane, has hailed MTN Nigeria for its resilience despite recession in the country.

    Rewane, the chief executive of Financial Derivative Limited, spoke in Lagos as MTN Nigeria celebrated its customers with a special reward and recognition, tagged: MTN Prestige Circle of Distinction.

    He said: “The timing is critical and auspicious. It’s a welcome idea, forthright at a time when others are cutting back; MTN is ploughing in despite the regulatory combats. It’s a sign of commitment to the country. We are hopeful we’ll all come back to winning ways again.”

    At the event, MTN showcased exotic cars from Coscharis Motors and art works from some of Nigerian’s most prestigious artists, including Olu Amoda, Rom Isichei, Victor Ehikhamenor, Kainebi Osahenye, Uchay Joel Chima, Obinna Makata, Isaac Emokpae, Uthman Wahab and Modupeola Fadugba, allowing guests to enjoy some of Nigerians most inspiring talents.

    The well-attended event  was witnessed by Lagos State Commissioner for Information and Strategy; Steve Ayorinde Chairman/CEO, Channels Television; John Momoh.

    Other guests included media entrepreneur; Kenny Ogunbe, Chairman, Editorial Board The Nation Sam Omatseye and Publisher, Businessday Frank Aigbogun.

    General Manager, Consumer Marketing, MTN Nigeria, Richard Iweanoge said the Circle of Distinction was introduced to appreciate customers for their support to the brand by enlisting them into an elite group of subscribers.

    “MTN Prestige is a proposition designed to welcome our deserving customers into a Circle of Distinction. What it means is that we are appreciating customers that have stayed loyal to the brand since we started operation 16 years ago. Although we have recognized them in the past, today we decided to take things a notch higher with this platform of luxury and style which we have fittingly called MTN Prestige,” he said.

    He said the loyalty scheme was available to prepaid, postpaid and e-postpaid customers in four categories; Platinum, Gold, Silver and Bronze.

    He added: “Membership avails customers to qualify from the tenure point of view and for the spending point of view and enjoy benefits ranging from free airtime to free data, mobile phones, access to MTN lounges at the airports, special invitation to premium events and discounted flight fares in partnership with Air France.”

    He further assured MTN subscribers of the telecoms company’s commitment to efficient service delivery and offer of life-enriching services and products in the year.

  • Economist charts course for Africa’s development

    To develop Africa’s economies, the continent’s traders must embrace the real sector, a development economist, Mr Hasvoon Chang, has said.

    According to him, the manufacturing industry’s interconnection with other industries and its capacity to boost complementary industries makes it key.

    Chang spoke at the Second Annual Adebayo Adedeji Lecture during the Africa Development Week at the Economic Commission for Africa (ECA) headquarters in Addis Ababa, the Ethiopian capital.

    He warned against neglecting exports as “economic development requires export success”.

    Chang, known for his refreshing ideas on development theories, noted that although several ways to development and industrialisation exist, “Countries can decide their development path. Countries become good at things because they want to excel at making those particular things.”

    Citing South Korea  an industrialisation success, Chang declared that history is replete with examples of countries forging a different path than the one they were advised to follow by international institutions.

    “Most developed economies have succeeded in growing their economies because of the infant industry,” Chang argued, pointing out that the strategy of this policy is to develop skills and protect the domestic market until such a time they can be mature.

    He said: “Infant industry protection creates the ‘space’ for improvement in productive capabilities, but does not automatically lead to productivity increase.” Chang explained that countries make the common error of not investing in productivity growth such as machines, research & development and skills.’’

    Noting that countries often fail to upgrade or add value to their products, the Development Economist declared that in order not to lose the benefits made from initial investments in industrialisation, countries must upgrade their industries and create their own value chains to be globally competitive.

    For African economies to develop, Chang believes that countries can utilise a strategic combination of an export-based economy and an infant industry. He thinks that the shrinking policy space, which states often bemoan, has not made industrial policy impossible to use.

    ECA Executive Secretary Mr. Carlos Lopes explained that much of ECA’s inspiration on work on industrialisation comes from Dr. Chang.

    “He (Chang) provides an excellent mix of history and economics by bringing to us the experience other countries have gone through in their development experience,

  • Osinbajo, Dangote, Tinubu for The Economist’s summit

    All is set for this year’s edition of The Economist Event’s Nigeria Summit.

    Philip Walker, Regional Manager of The Economist Intelligence Unit, will on Monday join eminent Nigerian businessmen and top government officials—from around the world—to review Nigeria’s current economic situation and provide an overview of the global macro-economic picture, talking through the growth prospects for Nigeria and the region.

    The guest and speaker list include Vice-President Yemi Osinbajo; President and President, Dangote Group, Alhaji Aliko Dangote; Danladi Verheijen, Chief Executive Officer and Managing Director, Verod; Herbert Wigwe, Chief Executive Officer, Access Bank, Nigeria; Okechukwu Enelamah, Minister of Industry, Trade and Investment; Jonathan Rosenthal, Africa Editor, The Economist.

    Other speakers and panelists are Alhaji Kashim Shettina, Governor, Borno State; Franklin Cudjoe, Founding President/Chief Executive Officer, IMANI; Philip Lindop, Head of Africa Investment Banking, Barclays Africa Group, Fola Laoye, Chairman, Hygeia Group.

    The list also includes: Alhaji Umaru Tanko Al Makura, Governor, Nasarawa State; Chief Willie Obiano, Governor, Anambra State; Issam Darwish, Executive Vice Chairman/Chief Executive Officer, IHS Towers; Adebola Williams, Co-Founder, RED, among others are also billed to speak at the event.

  • The Economist versus Jonathan

    SIR: I am saddened by the fuss generated over the the description of former President Goodluck Jonathan, by a writer in The Economist as an “ineffectual buffoon,” because of what the rage directed at the said writer suggests about the ways and mentality of Nigerian society. We fret over the age-old practice of irreverent castigation of a political leader by the press, yet pass unconcerned on the other side of the street when a boy is lynched for stealing a cheap cellphone! Does this not suggest that there is something seriously wrong with Nigerian society?

    Does it not vindicate the charge by some that ours is an incorrigibly perverse society?

    I’m not at all amused by the idea that political leaders in a democracy are, like demi-gods, beyond scrutiny, criticism, ridicule, and even the irreverent condemnation of the ordinary men and women to whom they are, or should be, accountable. Even more disturbing is the silly attempt to unconsciously muzzle free speech by wrapping the criticism of the magazine with appeals to the flag and racial pride.

    As Justice George Sutherland said in Grosjean v. American Press Co. (1925), “A free press stands as one of the great interpreters between the government and the people. To allow it to be fettered is to be fettered ourselves.” Even Napoleon Bonarparte, one of the great villains of history, was, nevertheless, astute enough to recognize that free speech is one of the major foundations that progress and, therefore, civilization rest on, when he stated that “A people who is able to say everything becomes able to do everything” (Napoleon I, Maxims, 1804-15).

    First, in defending the vital interests, well-being and progress of Nigeria, there should be very few limits indeed. Befuddled Nigerian youths, who can no longer differentiate between right and wrong, have brought the country into great international disrepute and blighted any immediate hopes for a brighter future for Nigeria. Street gangs roam our streets unleashing mayhem in broad daylight, university students, formed into gangs, shoot at one another and sexually assault their own female colleagues right on their own campuses, precisely because of the examples of the moral ambivalence shown by their elders, which, unfortunately, is again now being replicated in the criticisms of The Economist journalist. It is the great tragedy of Nigeria that otherwise sensible men and women shy away from calling monumental wrongdoing and evil [that has virtually destroyed this promising country] by their proper names because of some ill-conceived milk and water sentimentality which, in their own minds and culture, forbids a “mere journalist” or “Oyinbo” publication from referring to a “big man” in such contemptuous terms, no matter how accurate that description might in fact be.

    Second, is it not a small step to refrain from describing leaders by the appropriate adjectives to accommodating their excesses, as we saw with the kinsmen of Ibori, Alamieyesiegha, etc.? And is Nigeria’s sullied honour not best redeemed by honest, if blunt, condemnation and disavowal of culpable leaders, rather than subtle obfuscation and moral equivocation, when we are confronted with evidence of their monumental wrongdoing?

    Finally, with regards to who are especially offended because the castigation came from the Western press, and who would, therefore, rather see this as another racial slur, they would do well to remember that even the Western democracies, too, have a long history of errant politicians being irreverently castigated in the press – Richard Nixon was referred to as a “criminal”; Silvio Burlesconi a “buffoon” and Ehud Olmert (Israel), Moshe Katsav (Israel), Rod Blagojevich (USA), former Japanese premier Kakuei Tanaka, etc, have all been roundly castigated in the press for their conduct.

    The former President Jonathan brought his present misfortunes on himself. The nation had rallied behind him with much sympathy and goodwill in the aftermath of late President Yaradua’s death, but he betrayed that trust by presiding over what can, from the emerging evidence, only be described as Corruption Inc.

     

    • Akin A. Ajose-Adeogun,

    Surulere, Lagos.

  • The Economist’s neo-colonial journalism

    ‘Prejudice is a distasteful time saver. You can, under its guise, form opinions without having to get the facts’—E. B. White

    Earlier last week, some national newspapers published a culled report attributed to The Economist, a London-based weekly magazine. The title of the piece as printed nationally read ”Ambode lacks solution to Lagos gridlock, robberies.” To the magazine’s specious and belated editorial judgment, the Lagos state helmsman lacks the panacea to the traffic congestion and alleged robberies that, in its blinkered view, were plaguing the state.

    The Economist in its reported latest issue states: “Lagos is a hub for investors in Africa – it is a bigger economy in its own right than most countries on the continent, so this is of serious concern. The state’s former governor, Babatunde Fashola, who left office after elections in March, was lauded for improving traffic and security…. He curbed dangerous motorbike taxis and brought local ‘area boys’ (street children), under control. Cars were terrified into order by a state traffic agency, LASTMA, whose bribe-hungry officers flagged down offending drivers.” “…. Nigerians are migrating to Lagos en masse in search of work in a worsening economy, his office adds… Mr. Ambode cut the powers of traffic controllers by banning them from impounding cars….”

    The report as republished adds: “Reform in a culture riddled with corruption is never easy. Mr. Ambode’s office says the measure was intended to create a more “civil society”. …. The biggest concern is that the gridlock is a sign of a breakdown in relations between security forces, government agencies and the new governor….” Ordinarily, one would have expected a supposed 172-year-old magazine to be more circumspect and exact in statistical and graphical detailing of the alleged robberies it claimed had been plaguing the state since the administration of Ambode came on board barely five months and some days ago. But it failed woefully in this regard by just giving a generalised rather than giving specific examples of robberies; if only to show that the magazine knows what it is writing about. Also, neither did the magazine reflect the current state of traffic situation in the state that has drastically improved in its so-called latest edition. What a stale presentation displayed as current reality!

    While it could not be denied that traffic was hectic at a point due to the civility of Governor Ambode on cosmopolitan Lagos. He directed that motorists in the state should be treated with politesse, as is the case in London and which led to brief hiccups that has since been addressed: As a responsive governor, Ambode understandably at a recent parley with stakeholders in the transport sector said: ”While we try to be civil, this is only for the law- abiding citizens of the state.” Thereafter, his directive on enforcement with human face has led to improvement in traffic and environmental orderliness in the state, which the magazine failed to take into account in its unbalanced and unfair report.

    The Lagos helmsman’s attempt at trying to treat beloved residents of Lagos with civility should not be misconstrued as a weakness, lack of will power or a deliberate attempt at shirking away from statutory responsibility to the over 21 million inhabitants of the cosmopolitan state. After all, he is aware of the 1999 Constitution (as amended) of the Federal Republic of Nigeria in section14 (2b) which provides that the ”security and welfare of the people shall be the primary responsibility of government.” The governor has unwaveringly vowed to sustain this provision in different fora in the state without compromise. The reality as at today which The Economist report shamelessly ignored is that the situation has drastically improved.

    It is wrong at this stage to compare Ambode’s administration with that of Fashola. With the benefit of hindsight, the former governor bountifully reaped from laudable institutions/projects including the Bus Rapid Transit (BRT) and LASTMA bequeathed to him by indefatigable Asiwaju Bola Ahmed Tinubu. By the time Fashola left office, some of them were in weakened conditions as attested to by The Economist, which described LASTMA officials under Fashola as ‘bribe-hungry officers.’

    The Economist did a disservice to Fashola when it also described his LASTMA modus of operation thus: ”Cars were ‘terrified’ into order by a state traffic agency.”

    Is it possible for traffic enforcement officers in London to ‘terrify’ motorists under the guise of discharging their duties?  This is not possible as their society is that of human rights while the magazine is advocating animal rights for Lagosians. What a double standard! To prevent these inherited ‘terrific officers’ of Fashola’s LASTMA from illegally feasting on beloved Lagosians, Ambode adopted the more civilised method of booking traffic infraction rather than a frightening approach to traffic enforcement, which in the magazine’s view is good for Africans. Now that LASTMA officers have been re-orientated under Ambode to embrace a humane approach, Lagosians can heave a sigh of relief.

    Contrary to The Economist report that the current Lagos governor has been making excuses, the truth is that he has taken the bull by the horn. This belated hypocritical report of The Economist is nothing but neo-colonial journalism aimed at ambushing, blackmailing and stampeding the government of Lagos state. The attempt, under the guise of playing the globally recognised watchdog role of journalism, seeks to unduly incite and influence Lagosians, without success, against the governor they freely voted for in April. The magazine failed unabashedly because its report on Lagos is only current as far as its date of publication is concerned. Content-wise, it is stale having failed to reflect the sweeping improvements in the realm of traffic control and more importantly security amongst others in the state under Ambode.

    It is sad that apart from improving traffic and security situations in Lagos, the magazine did not beam its editorial searchlight on the commendable efforts so far made by Ambode to put the state on the right track and make it more investment -friendly to the world at large. He has no doubt stabilised finances of the state through re-engineering that led to reduction in cost of governance, allowing government to save N3 billion every month. The era of inflated contract awards is gone. This gives him room to have more funds being deployed into capital projects including guaranteeing funds for newly established Employment Trust Fund (ETF) that he promised youths during electioneering campaign.

    Despite paucity of funds since his assumption of office, particularly the fact that the immediate past government spent over 80 per cent of the 2015 budget before he assumed office, Ambode has consistently met its obligations to workers, pensioners and other inhabitants of the state. On security, Ambode has established an integrated Security and Emergency control platform that has smoothened security coordination in the state. Contrary to baseless insinuations of friction with security agencies by The Economist, Ambode has bought and donated high-tech equipment and vehicles of various needs to security agencies in the state to boost their crime combat efforts.

    He also mobilised the Organised Private Sector (OPS) to donate almost N1billion that is being deployed to tackle security issues in the state.

    On the health front, Ambode ab initio realised the need for a healthy citizenry. That goaded him to providing 20 Mobile Intensive Care Unit ambulances to complement the existing 16 across the state. He also provided additional 26 Transport Ambulances with equally newly installed 22 Power Generating sets ranging from 350 – 500 KVA in General Hospitals across the state.

    The governor also procured 26 Mobile X-Ray machines. He granted approval for the recruitment of more paramedic staff and special medical coordinators to ensure 24- hour service in our health facilities. On road infrastructure, the Lagos helmsman’s efforts should have attracted the attention of The Economist magazine but for their duplicity of editorial judgment. Amongst other roads, the Ejigbo-Ikotun road, Okota-Cele road, Metalbox road and Acme road in Ikeja are currently being rehabilitated; work has started on streets in Oshodi, Mushin, Agege, Yaba, Dopemu, Akowonjo, Ikeja, Ebute-Metta, Isolo, Ikorodu, Okota and Victoria-Island despite their not being captured in the Appropriation Law for 2015. Ambode has reportedly so far rehabilitated and maintained more than 181 roads across the state including federal roads.

    On the domestic front, one considers it a flawed journalistic practice that this foreign magazine’s report was accorded undue prominence in few national newspapers without reflecting the ongoing empirical Lagos situation on especially traffic control and security. It is a sad commentary for global journalism that an otherwise respected magazine could be criticizing a hardworking Nigerian governor for ulterior motives that before long would soon come to fore. Could this be hatchet job from disgruntled politically ungrateful elements?

    Whatever it is, this marked a significant dent on the image of The Economist. Simply because the magazine holds too rigidly to erroneous facts that veiled unscrupulous elements gave to it about Lagos, it has unprofessionally ignored the timeous principle in news reporting thereby whimsically foreclosing evidence of empirical improvements in the centre of excellence- that might have changed its warped position.

    To the editorial team of The Economist, it would not be immodest to state that their conceited report against the Lagos government makes it much easier to detect their hypocrisy. Theirs is journalistic neo-colonialism of the highest order.

    • Mobolaji Sanusi is Managing Director of LASAA

  • The Economist’s uncharitable view on LASG

    A recent publication by The Economist under the headline of ‘Why Nigeria’s Largest City Is Even Less Navigable Than Usual”, is at best unfair and uncomplimentary in its analysis of the traffic situation and the efforts of the State Government, under the leadership of Governor Akinwunmi Ambode to address a perennial problem that the writer acknowledges as unfathomable.

    While it is not the intention to join issues, we wish to state categorically that it is uncharitable to describe, after acknowledging the administration as “new” (having been in existence for only five months) as ‘less competent’. Obviously, there are challenges of traffic hiccups. It is also true that it is not a new challenge. The traffic situation has been the story of Lagos – Nigeria’s land of opportunity and the land of our collective prosperity. Had past administrations banished or conquered the situation, the new administration will not have inherited it. But that is not to say anything beyond the preparedness of the administration to deal with it.

    Hitherto many strategies have been adopted by previous administrations. Of particular note is the restriction of movement based on plate numbers (Odd and Even). It failed because Lagosians simply bought new cars. Also the establishment of LASTMA to manage the traffic is a step towards sanity. By the admission and acknowledgement of the writer, LASTMA had become an organization out of control. This was vividly captured by The Economist: “Cars were terrified into order by a State Traffic Agency LASTMA whose bribe-hungry officers flagged down offending drivers”. The question to ask here is should the administration continue to condone the recklessness of some officers of the agency? What the author also failed to consider is the number of lives lost to the mode of arrest adopted hitherto by LASTMA. There were reported clashes with transport union members, drivers and many other groups. Oftentimes, it degenerated into violence on the roads. Was it then wrong for the governor to charge LASTMA to adopt more subtle Apprehend, Caution and Ticket (ACT) approach to undertaking its responsibilities?

    Like many others who have commented on the governor’s directive, the writer is also guilty of misinterpretation. For the author the challenge is “Policy deficiency by the Ambode administration”. He writes: “Mr. Ambode cut the powers of traffic controllers by banning them from impounding cars. In retaliation, officers have refused to enforce the rules”. It is a preposterous thing to adduce. LASTMA had not refused directives rather it is in fact “actioning” the governor’s directive. Really, it is to be stated that the pace of response may not be as fast. But that is to be expected. The change of guard in the agency is in essence, a follow up to the new expectation by the administration of the agency.

    It is here important to restate the governor’s directive. LASTMA officials should ensure free flow of traffic and should adopt booking of traffic offenders rather than apprehending their vehicles, a situation that occasionally results in violence.

    Governor Ambode did not just wake up with the intention to court mayhem on the roads. Far from it. Rather the thinking behind the policy is to treat drivers and commuters as human beings. As this perception gains ground, the city landscape, traffic-wise, will take better shape. It is still to be proven that this cannot be the case.

    Since that policy, over 800 vehicles have been given tickets and fined. The fact is that there is a robust database that captures details of all 1.5 million vehicles that daily commute on Lagos roads. They have not been captured just for the sake of data but rather to provide critical information on which very effective transport management system can be founded.

    Again there is the issue of excuses, as the writer calls the explanation given about the traffic situation. The question here is – are they facts or excuses? For anyone familiar with Lagos, its topography disposes it to flash floods and consequently, to traffic. It is also a fact that there are many more people in Lagos. As the economies of many states suffer, Lagos becomes a destination of sorts where dreams are realized and fulfilled. One of the skills they bring is transport related. Serious analysis shows many enter without obedience to the law. Can we then say they should not do so.

    To refer to less fastidious people as the plank upon which the government is judged as weak, is to say the least a misnomer. Lagosians deserve to be treated humanely. It is the rule in other climes. Law enforcement agencies are responsible for dealing with those who fail to obey the law. Enforcement strategies give character to both the agency and the administration. Ambode has a right to be mindful of his legacies and public perception of his administration. We must acknowledge his right to dream.

    There is a need to allay the writer’s fears when he concludes his piece: The biggest concern is that the gridlock is a sign of a breakdown in relations between security forces, government agencies and the new governor.

    Our assurance is that the buck stops at the table of the governor. Not only has he demonstrated leadership but also has a listening ear when it comes to security and the state’s economy. He recently read the riot out to “Danfo” (yellow coloured commercial buses) and okada riders on the need to obey traffic laws. He has also embarked on massive lightening up of the Lagos roads as an immediate response to the robberies just as the various security agencies continue to move against criminals across the state. Recently, a “Zero tolerance for potholes” was launched by the Ministry of Works and Infrastructure.  This has seen the ministry’s officials- engineers, mount a massive onslaught on bad roads across the state, along with Public Works Corporation.

    Running through the piece is a comparison with the Governor Fashola years. Eight years is compared to four months. Fashola has indeed given Lagos a sense of sanity. He brought order to things. He had used power to enthrone order but Ambode will rather engage the people and build an enduring culture of obedience and acceptance and respect for the laws; very much like a partnership based on self-reinforcing mutual respect. To start on that road from the early days of his administration is not the sign of a governor who has lost control but one who has started on a road that will lead all of Lagos to excel.

    The vision is to build a safe and efficient city. It is the vision of a new Lagos that people voted for and the governor is giving life to. The gridlock will be dislodged when tank farms build and operate parks, the road is laid bare of articulated vehicles, parking indiscriminately on roads, and an electronic platform managing the presence of this category of vehicle on our roads, is put in place.

    Lagos is a victim of its prosperity. For its prosperity to remain, it is to this same governor that we must look. All who mean well must provide a plank of support rather than distract him with less-than-fair criticisms that do not suggest an atom of the direction he must go. Talk they say is cheap. It is our hope, that all of us will drive on the road to Lagos’ prosperity by being law-abiding. The intermodal transportation system will emerge under Ambode’s watch. It is the obvious solution; it is being pursued.

     

    • Fagunwa is of the Lagos State Ministry of Transportation, Alausa, Ikeja.

  • Nigeria’s exit from bond Index ’ll hurt external reserves, says economist

    What are the consequences of global agency JP Morgan’s delisting of Nigeria from the Emerging Market Bond Index (EMBI)? The action will threaten Nigeria’s $31 billion external reserves and also hurt its financial and economic rating, says an economist, Mr. Tilewa Adebajo.

    In a report obtained by The Nation, Adebajo, CEO, CFG Advisory, said the cost of borrowing would increase, noting that access to the international financial markets for sovereign and corporate entitles will be limited.

    The exit, Adebajo argued, would stem the inflow of portfolio investments which peaked at $20.5 billion in 2013.

    JP Morgan’s EMBI, with around $210 billion in assets under management, is the most widely used and comprehensive emerging market sovereign debt benchmark. Nigeria was added in the index in 2012 when liquidity was improving, making it the second African country after South Africa to be included.

    “To state the obvious, the lack of articulation on policy and economic direction by the new government is not helping matters and is unsettling the financial markets. Time is money. And in the fast emerging global fiscal order, lost time and opportunities may never really be regained,” he said.

    Adebajo said the government’s next challenge is the validation and structured financing plan for the current fiscal deficit, estimated at N6.5 trillion.

    “The government’s actions on the fuel subsidy could significantly increase this figure. With the restructuring and swap of state government commercial bank loans into Treasury Bonds, the new government has increased the domestic debt profile by N1 trillion overnight. Unfortunately, state governments have not been compelled to execute conditional covenants, such as adhering to the tenets of the Fiscal Responsibility Act, which stipulates provisions for fiscal discipline,” he said.

    He said with a $49 billion domestic debt and $10.8 billion external debt overhang, Nigeria is now committing 23 per cent of its fiscal revenues to servicing debt.

    “With the levels of projected fiscal deficit, we might exceed the revenue-to-debt service best practice benchmark of 25 per cent by year end. The alignment of fiscal and monetary policy which the economy benefitted from over the last five years seems to, have been lost over the last several months,” Adebajo said.

    “Nigeria’s financial intermediation rates at 25 per cent cannot support productive investment and development; it will also stunt economic growth. Major reforms are therefore required in the banking system to support single digit rates. Banks also have to better deploy technology to reduce and manage costs. Their productivity and efficiency levels will consequently improve leading to a more competitive financial services sector.

    “Beyond the macro economy, we need to do a critical reappraisal of our trade and investment policies needed to ensure that they are properly integrated into the global value added system,” he said.

    “Beyond the macro economy, we need to do a critical reappraisal of our trade and investment policies, we need to ensure they are properly integrated into the global value- added system. The domestic gains and success we have had in the cement sector with import substitution and backward integration has primarily been, driven by an individual and unfortunately not yet replicated, nor institutionalised in other critical sectors such as agriculture, another potential engine room of Africa’s political economy considering its huge social development and value chain effect.

    “Drastic attention also needs to be paid to Customs and Excise reforms and management to ensure proper implementation of Trade Policy, Industrial Development and Investment. The corruption menace of duty waivers, duty evasion, smuggling and weak import documentation also continues to affect the naira, clearly disrupting and discouraging industrial development, investment and expansion.”

     

  • The Economist: $29.8b reserves fit for six months imports

    The Economist: $29.8b reserves fit for six months imports

    The $29.8 billion foreign reserves can only cover less than six months of imports – a threshold that may threaten Nigeria’s balance of payment transactions, Afrinvest West Africa Plc Managing Director Ike Chioke has said.

    In a report titled: Nigerian economy and financial markets: After elections … what next? released last weekend, he said the reserves have tumbled by 14 per cent to $29.8 billion despite the accretion to the reserves.

    Chioke said despite the N200 per dollar foreign exchange (forex) rate forecast for this year, the forex pressure may persist after the elections because of the fallen crude oil prices.

    The devaluation of the naira, he said, is taking its toll on the general price levels, arguing that as against the eight per cent inflation rate last December; general price level inched higher by 0.2 per cent each in January and February to settle at 8.4 per cent in February.

    Chioke expects the fiscal policy to remain tight after the elections, as the Monetary Policy Committee (MPC) considers whether to either preserve foreign portfolio investments or ease the monetary environment to encourage lending.

    He said: “As a result of the huge participation of the foreign portfolio investors in the Nigerian capital market, the need to attract capital inflow, as well as save the depleting external reserves year-to-date decline of 12 per cent to $29.8 billion may compel the CBN to keep the Monetary Policy Rate (MPR) at 13 per cent, or plus one per cent till end of 2015.”

    The persistent decline in crude oil prices, which exposes the economy’s weak revenue structure, has increased the country’s risk premium, Chioke said.

    “In a bid to reduce the challenge of increased lending, we expect the government, through the CBN, to come up with additional stabilisation funds, in addition to the recent N300 billion Real Sector Support Facility to select sectors that would foster diversification of Nigeria’s revenue base.

    “In the light of the Single Treasury Account (STA) policy, we expect the CBN to unleash the strings of public sector deposits from current 75 per cent as we expect less public funds will be available to the banks,” he said.

    He said the threshold of private sector deposits currently at 20 per cent, may be tweaked plus or minus five per cent before the year ends, if the exchange rate is stable.

    Chioke said it is expected that the CBN would revert the Net Open Position (NOP) to one per cent from 0.5 per cent before the year ends. Foreign Portfolio Investors (FPIs) fears.

    He said: “In a bid to stabilise the naira and preserve the external reserves, the apex bank devalued the naira by 8.4 per cent last November. However, with sustained pressure of the foreign exchange rate, the CBN shut down official window in February 2015, implying another tacit devaluation of the naira.

    “This move led to a relative stability in the currency market as CBN intervenes to meet excess demand through special intervention. We attribute this hike in general prices to increase in price of imported goods resulting from pressure on foreign exchange rate.”