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Tag: Economy

  • ‘How $500m Energy Park is boosting economy’

    ‘How $500m Energy Park is boosting economy’

    Platform Capital has pledged continued investments in projects to boost economic growth.

    It identified one such project as the “$500million” Duport Midstream Energy Park, which includes a Modular Refinery and tech companies.

    The firm spoke via a statement following the “personal attacks and rumours” against its Founder, Dr. Akintoye Akindele, saying the company would not be distracted.

    “The energy park, located in Egbokor, Orhionmwon Local Government of Edo State, is valued at over $500 million.

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    “It is the first modular refinery in Nigeria that is fully operational and contributing towards availability of petroleum products, creating jobs and boosting the nation’s economy,” the firm said.

    It described the park as the first in the country, adding it addresses challenges in the downstream sector.

    The energy park, the firm continued, comprises a 2,500-bpd modular refinery, a 60-million-scf gas processing plant, a 50-megawatt power plant, a 10 million scf compressed natural gas (CNG) plant, 30,000 MT refined product terminal, a Tier IV Data Centre and a 5MW embedded power plant.

    It added FCMB is the lead debt financier of the Park and  Modular Refinery with others. This partnership aims to impact many sectors.

    “It is important to note Platform Capital is also a leading investor in technology, with 70 tech investments globally.

    These companies include Koko Networks, Koniku, RxAll, Omnicharge, and Solo Funds.

    Platform Capital said: “We value our clients and partners and maintain credibility, transparency, and integrity.

    “We are not oblivious to the attacks and rumours peddled against the chief executive officer,” the statement noted.

    It said the rumours were attempts to grab management control of Duport Midstream and the refinery from Akindele.

  • First quarter scorecard: Economy in doldrums

    A review of the nation’s economic performance in the first quarter of 2019 by operators in the organised private sector (OPS) focusing on macroeconomic and business operating environments is not palatable as experts say the period was characterised by uncertainty, investor apathy and low performance in key sectors, reports Charles Okonji

    In the view of players who hold the levers of the key sectors of the economy, the performance of the first quarter of 2019 literally leaves nothing to cheer about. From Manufacturers Association of Nigeria (MAN), to the Lagos Chamber of Commerce and Industry to the National Association of Chambers of Commerce and Industry, Mines and Agriculture (NACCIMA), the same troubling concerns resonate: economy is underperforming.

    A cursory view of the Manufacturers Association of Nigeria (MAN) CEOs Confidence Index (MCCI) for the quarter was very clear on the matter. In the view of the MCCI, which is an aggregate opinion of CEOs of member-companies, over 200 of such chief executives agreed that the quarter under review under-performed.

    Their conclusion was arrived after a computation of the Diffusion Indexes which involved weighing the percentage “Positive” responses by ‘1’ and “Neutral” responses by ‘0.5’, before summing them up.

    According to the report signed by MAN President, Ahmed Mansur and  made available to The Nation, the MCCI result for the first quarter 2019, standing at 51.3 points, clearly depicts a manufacturing sector that is slightly above the minimum threshold. MAN’s opinion is that an aggregate or composite MCCI above 50 points signifies that manufacturing sector is still struggling as operators have seemingly low confidence level but high expectation that manufacturing performance will improve.

    MCCI of 50 points is also an indication that the sector is stagnant while below 50 points signifies that manufacturers are losing confidence on the economy while the performance of sub-sectoral groups is retracting.

    The MCCI First Quarter of 2019 further paints the picture of a manufacturing sector that is struggling.  The confidence level of the CEOs in the sector, though not negative, is dwindling. The 51.3 points, being the outcome of the first quarter MCCI, will form the basis of gauging performance in subsequent quarters.

    It is evident that the performances of some sectors and industrial zones fell short of the 50 points benchmark; this informs the need to prioritise the solutions and do the needful to improve the perception and overall performance of the manufacturing sector.

    To improve on this low performance, going forward, MAN demands that government make conscious efforts to address myriad of challenges facing manufacturing and manufacturing companies in the country.

    The CEOs identified such challenges as including repair and expansion of the roads leading to Lagos Ports, make other ports outside Lagos functional so as to address the gridlock challenges and the associated cost; and making forex more available for purchase of manufacturing inputs that are not locally available/convergence of the existing forex windows.

    Others are expediting the process of issuing manufacturers the End Users Certificate through liaison with the MAN continue to improve on the power supply and the general upgrade of the nation’s infrastructure; capital expenditure component of the budget should be conscientiously implemented to bridge the infrastructure gap and the design and implement appropriate incentives for the struggling sectors.

    The manufacturers in the country equally want improve supply of natural gas to them as well as create a flexible condition to improve manufacturers’ access to fund, ensure compliance of tiers of government to the regulation on harmonised taxes so that only the approved ones are implemented and entrenching better monetary policy management to reduce the current high inflation in the economy.

    Besides, they have also impressed on the government the need to ensure that NAFDAC and DPR agree on who inspects base oil used by the Petroleum Products Sub-group and facilitate long term and low interest loan facilities to the real sector, at no more than 5%. Just as they seek conscientious implementation, monitoring and performance evaluation of Executive Orders 003 for improved patronage of locally produced goods by MDAs and pay particular attention to the development of railways around the national ports.

    LCCI/NACCIMA on the same page

    Echoing similar sentiments, President of the Lagos Chamber of Commerce and Industry (LCCI), Mr. Babatunde Paul Ruwase said, “It is paramount that investors’ confidence be restored to curb the diminishing uncertainties which marred the first quarter of the country’s economy. The last three years have been characterised by upsides and downsides in the economy. Some of the drivers of economic conditions are internal, while others are external.”

    The outgoing President of the National Association of Commerce Industry Mines and Agriculture, (NACCIMA), Iyalode Alba Lawson is also on the same page with her counterparts at the MAN and LCCI. She described the first quarter’s performance as of the unstable and performed below expectation.

    She attributed the poor performance to the election activities, adding that she is optimistic that the second quarter would perform better if required cautions are not thrown to the wind.

    GDP growth and investment

    The National Bureau of Statistics reported that the nation’s GDP grew by 2.4% in the fourth quarter of 2018 compared to third quarter 2018 growth of 1.8 %. The full year GDP growth was 1.9%; better than 2017 of 0.8%. This performance is still weak and fragile. It is also far below 3% annual population growth.  This remains a cause for concern due to its implications for poverty and sustainable growth in the country.

    The government should therefore commit to policies and programme that will accelerate economic growth and ensure that the growth rate surpasses the rate of growth of population. Private sector investment is a critical growth driver; therefore, the government should commit to the creation of an enabling environment to bring about a quantum leap in private investment. Consequently, tax policy, trade policy, monetary policy, and foreign exchange policy must be in alignment with this objective.

    Economic management philosophy

    The LCCI recognises the Economic Recovery Growth Plan [ERGP] as the main economic policy document of the present administration. The plan underscores the philosophy of private sector led economy. It is therefore important for government policies and actions to be in tandem with the contents and direction of ERGP. The private sector should be positioned to play the role expected of it in this important policy document. This economy is blessed with quality entrepreneurs that can transform our huge potentials into concrete outcomes and value creation if they have the right environment.

    Funding government operations

    Top government functionaries have repeatedly expressed concerns over the funding gap that exists in government. It is therefore important to quickly develop a fiscal sustainability strategy as the administration progresses into its second term. We need to deal urgently with the cost of governance as well as the issue of value for money in government expenditure. We recognize that there is a correlation between investment growth, GDP performance and tax revenue. This underscores the very important role that investment can play in boosting the revenue of government. As investment grows, job creation will improve, and tax revenue will be positively impacted.

    The government also needs to watch the growth of recurrent expenditure in order to give more room for infrastructure financing. Currently, the summation of recurrent expenditure and debt service is equal to total government revenue. This financing structure is certainly not sustainable; what this means is that capital project will naturally be funded by borrowed funds. It is important to put in place an appropriate Public Private Partnership to attract private capital in the financing of bankable public sector projects.

    Economic integration

    The LCCI is aware that there are arguments for and against Economic Integration, either at regional or continental level. However, we are of the view that the Nigerian economy has more to gain by being part of the economic integration process at the regional level (ECOWAS) and at the continental level (AFCFTA).

    Also, the outgoing President of NACCIMA argued that signing of AFCFTA will rather reposition the Nigerian economy to become more competitive. “This will help the government and the OPS to fine-tune their processes as well as improving on the ease of doing business. We appreciate the concerns of the manufacturers on competitiveness issues, especially arising from possible non-adherence to the rule of origin by some of the participating countries,” she stressed.

    On his part, the Director General of LCCI, Dr. Muda Yusuf advised that the government safeguard measures and put in place protective processes that will shield the vulnerable sectors of the economy and to also ensure that there is effective enforcement of the rules of origin. “Once this is done, we request that Nigeria signs the AFCFTA.”

    Aggregate MCCI

    The aggregate Manufacturers CEO’s Index for the first quarter of 2019 stood at 51.3 points which is slightly above the 50 points benchmark of good performance. The indexes of Current Business Condition (45.5 points) and Current Employment Condition (38 points) were not very encouraging owing to inability of manufacturers to operate at close to full capacity. However, based on the responses of manufacturers, indexes of Business Condition in the next ‘3’ months (54.5 points); Employment condition in the next ‘3’ months (52.5 points); and Production Level in the next ‘3’ months (65.5 points) suggest that manufacturing CEOs have confidence that the operating environment will improve, leading to increase in manufacturing employment and production level in the second quarter of the year

    Looking at various sectors, six sub-sectors recorded slightly above or exactly the 50 points benchmark of good performance in the following order: Domestic/Industrial Plastics, Rubber & Foam (62.6); Pulp, Paper & Paper Products, Printing, Publishing & Packaging (60.5); Motor Vehicle & Misc. Assembly (56.6); while Food, Beverage and Tobacco, Textile, Wearing Apparel, Carpet, Leather and Leather Footwear and Wood & Wood Products including furniture all stood at 50 points indicating that these sectors recorded minimum performance in the first quarter of 2019. Four other sub-sectors recorded below 50 points in the following order: Chemical & Pharmaceuticals (47.5); Electrical & Electronics (46.8), Basic Metal, Iron & Steel, Fabricated Metal (44.1) and Non-Metallic Mineral Products recorded 44 points.  Based on these indexes, it is therefore important that while paying attention to improving the level of activities in the sectors generally, the sectors whose performance fell short of 50 points benchmark should be given specific focus.

    The review of the sector on the zonal front showed similar picture of mixed performance as seven branches in the following order recorded above average performances: Oyo/Ondo/Osun/Ekiti (80.1 points); Rivers (72 points); Kwara/Kogi (69.9 points) while Ikeja (53.8 points), Ogun (53.5 points) and Kano with (53.3 points) completes the number of zones with positive performance in the first quarter of 2019. Kaduna (49.9 points), Edo/Delta (46.7 points), Apapa (40 points), Bauchi/Benue/Plateau (39.8 points), Abuja (37.5 points), Imo (35.7 points) and Enugu/Anambra with (35 points) all fell below the minimum benchmark for good performance.  It is therefore important that the branches that fell below the 50 points standard should be given special focus by first diagnosing the peculiarity of their challenges and proffer solutions to address observed challenges with dispatch.

    Of the majority of those interviewed, 40 percent disagreed that patronage of Nigeria manufactured products has improved due to Executive Order 003 which mandated all government establishments to make Nigerian manufactured goods first choice in their procurement processes. However, 28 percent agreed, while the remaining 32 percent were not sure as to whether Executive Order 003 has improved government patronage of Nigerian manufacture goods. No doubt, Executive Order 003 is a novel.  However, there is need for proper monitoring and evaluation of the processes to ensure that all MDAs conform to the provisions of EO 003.

     

  • ‘Nigerian entrepreneurs must be encouraged to grow economy’

    Dr. Waheed Olagunju is a renowned journalist, international development finance and management expert with experience spanning over three decades in the industry including role as Senior Manager, Executive Director, Small and Medium Enterprises, as well as stints as Acting Managing Director/Chief Executive, all at the Bank of Industry (BOI). In this interview with Ibrahim Apekhade Yusuf, the turnaround expert who retires soon from the public service having reached the mandatory 60 years, shares fond memories of his working career vis-à-vis prospects and challenges in development finance. Excerpts:

    What is your assessment of the Bank of Industry’s contribution to the nation’s industrial development thus far?

    Considering where the bank was in 2001 when the turnaround began under the BOI’s pioneer Managing Director/CEO, Dr Lawrence Osa-Afiana and the meteoric efforts put in by his three successors namely: Ms Evelyn Oputu, Mr Rasheed Olaoluwa and the incumbent CEO Olukayode Pitan and what the unaudited highly impressive numbers looked like in quarter 4 of 2018 under the present Management and Board, I would say BOI’s sustained turnaround would go down as one of the most successful in the annals of efforts at transforming state-owned enterprises in Africa. Incidentally my doctorate dissertation was on BOI so I am speaking from an enlightened position and as a participant in the process. The sustained improvements in the key parameters are in thousands of percentage and testimonies abound from thousands of micro, small, medium and large entrepreneurs across the country who have benefited from BOI’s facilities. Many of them have continued to be showcased on the bank’s weekly television programmes. Therefore, I am satisfied with BOI’s contributions to Nigeria’s industrial development and I have no doubt that it would be sustained provided the quality of leadership at all levels are not compromised and insulation from political interference sustained- situations that have been the bane of many state-owned enterprises in Africa, especially public-owned development finance institutions.

    How would you react to those who feel the bank has not done much since the contribution of the manufacturing sector to Nigeria’s GDP has remained at single digit for decades?

    We need to appreciate that capital is just one of the factors of production. There are a lot of other things that must be in place for a country to become industrialised. While Nigeria’s 200 million population which if well harnessed could be translated into rich human capital and potentially huge market with strong effective demand as well as its globally strategic coastal location, favourable climatic conditions and vast natural resource endowments are factors that could catalyse our country into becoming an industrialised nation where the manufacturing sector would contribute up to 20% of its GDP, these factors are not sufficient for actualising its industrial development potentials. For Nigeria’s environment to be more enabling, there needs to be massive improvements in infrastructure such as electricity, rail and inland waterways as well as road network which gratifyingly are now being addressed. We also need to reeducate our population from being job seekers towards entrepreneurship as we need millions of entrepreneurs who can efficiently convert our several comparative advantages in agriculture, mining, petroleum as well as the creative industry into competitive advantage. Boost in indigenous entrepreneurship is crucial for the development of Nigeria’s private sector where increased collaboration is required between Nigerian entrepreneurs and their foreign counterparts who would only invest in Nigeria if Nigerians are investing in Nigeria. Here is the importance of Alhaji Aliko Dangote’s refinery, petrochemical and fertilizer plant which is the biggest in the world. This would engender more desired foreign direct investments into Nigeria as opposed to the hot money from portfolio investors that could be withdrawn as speedily as they are invested in money and capital markets.

    Considering our youthful demography, Information and Communications Technology is another potential growth area. A lot could similarly be achieved through the construction industry driven by significant local inputs. If we are to fully harness our natural resources and add value to them, we would not have enough manpower to operate our economy. This is the basis for my assertion that unemployment in Nigeria is artificial. I am an indeed an incurable optimist when it comes to Nigeria’s prosperity prospects. Now all these require huge investments that cannot be undertaken with insufficient domestic financial resources especially considering that the average savings rate is about 15%. According to some schools of thought, Nigeria needs to constantly invest up to 40% of its annual GDP to record double digit growth rate consistently over a period of 20 years to attain industrialised nation status and per capita income of about $15,000 provided our annual population growth rate does not exceed 3%. So if we need to invest 40% of our annual GDP and the annual rate of savings is 15% there is a funding gap of 25% that has to be filled by external financiers whose doing so would be predicated on their level of confidence in Nigeria as measured by many factors including the depth of our democracy, adherence to the rule of law, the perceived level of corruption etc. Here in lies the absolute need for BOI’s upward trajectory to be sustained as it is very well placed to mobilise considerable suitable financial resources in support of Nigeria’s industrialisation. All staff of the bank are conscious of this and are irrevocably committed to adhering to global best practices in all its undertakings and maintaining the institution’s high international ratings.

    Looking back what would you attribute to your successful career in development banking considering that you were initially a broadcaster?          

    First and foremost, it’s the grace of God as I did not plan to go into banking. Secondly in implementing His design God also brought me into contact with some ordained executors of His plans for me. His chosen executors turned out to be my benefactors and very good bosses in NTA, NIDB and BOI from whom I learnt quite a lot about broadcasting, banking and life in general. Thirdly God crowned my diligent efforts as I actually worked very hard, underwent considerable on the job trainings and retraining whilst improving myself educationally. In addition to my Bachelor of Arts and Master of Social Sciences degrees that I bagged from the University of Lagos in 1981 and 1984 respectively as well a professional certificate in Investment Appraisal and Risk Analysis from the Queens University, Canada in 2013 and a Doctorate Degree in Business Administration from the Paris School of Business in 2017, I also obtained a certificate in Executive Development in 2018 from the Wharton School, University of Pennsylvania, United States of America. Other contributory factors have been humility, perseverance and crowning all these with prayers for divine guidance in absolute submission to God’s best wishes for me.

    Talking about my broadcast career, the assignments that I undertook and how I handled them consistently stood me out, as my reports were always research based. Practicing broadcast journalism well broadens ones views and also gives one considerable domestic and international exposure. As Head of the Economy Desk, I developed a Communication Support Programme for the Structural Adjustment Programme that met with stiff resistance from most Nigerians in the mid 80s. It was while undertaking these assignments on behalf of the Federal Government that I met and related with highly knowledgeable and distinguished personalities from various backgrounds in and outside Nigeria who made lasting impact on me in terms of knowledge acquisition and experience sharing as well as value formation that got me prepared for my development banking career at the Nigerian Industrial Development Bank.

    I was virtually embedded in the national economic management team that included Alhaji Abubakar Alhaji, Dr Kalu Idika Kalu, Dr Chu SP Okongu, Chief Olu Falae and interacted with the international development community. I had to educate myself, read a lot and learnt a lot about other countries implementing structural adjustment programmes in Africa, South America and Asia. It was like undertaking crash programmes in development financing as I attended many international development fora and visited, several times, the world’s leading multilateral development finance institutions and interviewed their Chief Executives such as Mr Barber Conable of the World Bank, Mr Mitchell Camdesus of the International Monetary Fund, Sir William Ryre of the International Finance Corporation and the late Mr Babacar Ndiaye of the African Development Bank. I was also at the Multilateral Investment Guarantee Agency (MIGA). This exposed me to the workings of these international financial institutions. Another major organisation I interacted with was the European Investment Bank. In fact, I covered the negotiations that led to the fourth LOME Convention in 1989 under the European Economic Community’s partnership with countries in the Africa Caribbean & Pacific regions. I give this background to establish the fact that by the time I joined NIDB in 1990, I had proper understanding of what a national DFI does. I would say that I was also lucky to have served under successive Chief Executives and boards of NIDB/BOI as well as supervising Ministers, who gave me the opportunities.  Because it is one thing to have the potentials, undertake self-improvement capacity building programmes and quite another to be given the chance to realise those potentials. In this regard, I remain grateful to Mallam Ibrahim Aliyu through whom I joined the NIDB in 1990 and his successor, Alhaji Saidu Kasumu, the last MD of NIDB. Ms Evelyn Oputu who became the second MD of BOI in December 2005 added Strategic Planning to my schedule in January 2007 when I was promoted General Manager in charge of Strategic Planning, Corporate Secretariat and Corporate Communications. She also recommended my appointment as Executive, Director Business Development in December 2012. Mr Rasheed Olaoluwa reassigned me as Executive Director, Small and Medium Enterprises in 2014.

    You are launching your development advisory firm at a strategic period of our economy when stakeholders are yearning for foreign direct investment, is there any roles you can play or advice you can offer in this regard?

    Fortunately my responsibilities in the last 37 years have enhanced my capacity, competence, capability, versatility and exposure that have put me in very good stead to provide solutions to developmental challenges in the public and private sectors as well as the civil society community. They have entailed traveling extensively within Nigeria and internationally, cultivating and nurturing relationships with domestic and foreign development partners and potential investors as well as promoting and advancing Nigeria’s economic agenda. In the course of those missions I attended many development related fora, organised several inward and outward business development sessions and similarly undertook study tours of industrial establishments including free trade and special economic development zones in Africa, Asia, South and North America, Australia and Europe.

    In the course of my development banking career, I engaged with relevant Federal Ministries, Departments and Agencies, the Presidency when required, leaderships of the National Assembly and their Committees since 1999 as well as organised private sector groups and Nigeria’s international development partners.

    In the process I developed very good working relationships at all tiers of government including many State Governors and in some cases Local Government Chairmen and local communities through their traditional institutions and rulers, Nigeria’s international development partners within and outside the country at all levels from their Ambassadors and representatives in Nigeria up to their Ministers and CEOs in their home countries and at their Headquarters abroad respectively and also sections of the international investment and donor communities. These activities have meant continued cultivation of wide contacts, development of extensive networks and building considerable goodwill domestically and internationally that have been leveraged to make significant contributions to BOI’s remarkable progress and development as well as its commendable development initiatives within and outside Nigeria.

    Therefore, going forward, as development advisers we would be facilitating game changing initiatives in Africa’s development trajectory, playing advisory roles to governments and especially to domestic and foreign entrepreneurs who are desirous of exploring Nigeria’s vibrant market. Foreign investors who want to navigate the Nigerian and other African markets would find our services quite useful. Many perhaps don’t know that the return on investment in Nigeria is one of the highest in the world. Prior to the recession Nigeria was ranked by United Nations Conference on Trade and Development (UNCTAD) as number with about 35% returns on investment. That was why, also according to UNCTAD, Nigeria attracted the highest inflow of Foreign Direct Investments into Africa in the first half of this decade.  Considering my experience at BOI, I will dedicate the rest of my life to seeing how we can replicate the BOI success in other state owned enterprises in Nigeria and other African countries. I say this because some governments on the continent that have seen what we did at BOI are seeking guidance on how to help turnaround their DFIs.

  • Osun to team up with Venezuela, Israel, others on economy

    THE Osun State government has unveiled plans to strengthen its economy by creating an enabling environment for business and investment to thrive.

    Governor Adegboyega Oyetola stated this on Wednesday when he received the Venezuela Ambassador to Nigeria, Mr. David Nieves Valasquez-Caraballo; envoys from Israel, Cuba, Cote d’Ivoire and Republic of Benin.

    The envoys, who were received on behalf of the governor by Chief of Staff Dr. Charles Diji Akinola and Secretary to the State Government (SSG) Mr. Oluwole Oyebamiji, were among those on a two-day visit to

    Osogbo, the state capital, to attend the International Agriculture Technology Exhibition and Conference tagged “First Agrictech Nigeria”.

    The conference was organised to explore business opportunities in agriculture and to expand the sector.

    Apart from Mr. Valasquez-Caraballo; Cuban Ambassador to Nigeria, Mr. Carlos Trejo Sosa was represented by the Deputy Head of Mission, Ms. Leydis Bernal Suarez; Israeli Ambassador to Nigeria, Mr. Pear Duchi, was represented by Mr. Madu Chibueze, among others.

    Speaking on behalf of the governor, Akinola said Osun remained resolute to maximise its potentials for greater productivity.

    He said his administration is committed to enhancing Public Private Partnership, thus creating workable environment for business to grow.

    Oyetola said the state is open for business and had mapped out modality to facilitate local and foreign partnership for positive changes across all sectors.

    He added: “We have just had a meeting with ambassadors, who have come to our state to discuss myriads of business opportunities and explore their potentials as regards the need to strengthen bilateral relationship.

    “This administration is giving priority to agriculture, mining, tourism, information and communication technology among others, to ensure proper diversification of the economy.

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    “We had a very fruitful session with them; we have reached a compromise on the need to expand the window of business opportunity, particularly in the areas of agriculture, mining, tourism, science and technology.

    “They have shown interest to partner the state in these areas to ensure that Osun achieves her goals.

    The Venezuelan Ambassador said his country was ready to collaborate with the Osun state government to promote agriculture, mining and tourism.

    Valasquez-Caraballo, who described the agriculture exhibition as fruitful, rewarding and adventurous, said no effort would be spared to partner Osun towards actualising its set objectives.

    He said: “We have come to Osun to deliberate on some of the areas in, which we can collaborate and strengthen bilateral relationship.”

  • ‘Buhari’s second term will improve economy’

    Chairman of the Delta State All Progressives Congress (APC) Governorship Campaign Council Dr. Alex Ideh has said the second term of President Muhammadu Buhari will usher in economic prosperity in terms of job creation, social welfare package and direct foreign investments into the country.

    In a congratulatory message to the president, Ideh attributed the President’s victory to the people’s trust in him, and their resilience through hard times in the first term. The electorate, he said, believed that the second term would yield positive relief to the people.

    The statement reads: “Many Nigerians said they were ready to endure for another four years since the President is rebuilding the economy that was almost comatose at the time he took over in 2015. That trust won’t be a disappointment in the second term.

    “Mr. President will decisively shore up the space to improve the economy. He’s fully aware of the complaints of the people; therefore, in his second term, he has promised a renewed commitment to deliver a better and improved economy using a stronger economic team that would usher in economic prosperity which is the promised Next Level.”

    Ideh urged Nigerians to support and pray for God’s guidance and wisdom for Mr. President and his team. He also prayed for sound health and truly committed people for the President in his mission of national rebirth and reconstruction. “Buhari means well for the country, therefore, he needs people of like-minds to navigate the ship of the state to a safe harbour. These, I believe God will give him,” he added.

  • How budget delay is affecting economy

    With the hope of the passage of the national budget still uncertain, stakeholders worry this may have a rippled negative effect on the economy, reports Ibrahim Apekhade Yusuf and Medinat Kanabe

    No doubt there has been a long wait for the passage of the national budget. But for how much longer the wait would be is what many stakeholders are worried about.

    One such stakeholder who has raised his voice above the din is the top echelons of the Chartered Institute Bankers of Nigeria (CIBN), Dr. Uche Olowu.

    At a public forum recently, he decried the incessant delay in the passage of the national budget, saying it impacts negatively on national productivity even as he called on the Federal Government and the National Assembly to close ranks in order to release the budget on time.

    According to CIBN President, there was need for a new approach to the nation’s budget. “The country needs to rethink its strategy of handling some of its economic activities. For instance, according to the African Development Bank, ADB, Nigeria needs to re-orient its federal budget currently dominated by recurrent spending towards more capital expenditure and accumulating savings to sustain social spending.

    “Besides, delays in budget approval and signing have become predominant that it is not available for implementation in most cases in the first quarter and rare cases a better part of the second quarter over the past 15 years. Incidentally, this year is not an exception. This has led to uncertainty in the system, affecting the delivery of projects which has profound impact on productivity in the economy. I, therefore, wish to implore the executive and legislative arms of government to close ranks to release the budget on time,” Olowu said.

    Budget 2019

    President Muhammadu Buhari presented the 2019 budget to joint session of the two chambers proposed a total of N8.83 trillion last month.

    Budget parameters

    Details of the proposed budget showed that it was based on crude oil benchmark price of $60 per barrel of oil and 2.3 million barrels per day. The budget is further predicated on an exchange rate of N305 to $1, a real Gross Domestic Growth of 3.01 per cent and inflation rate of 9.98 per cent.

    The proposed budget shows that about a quarter of the sum (N2.14 trillion) will be used for debt servicing while capital expenditure is expected to gulp N2.031 trillion.

    Further breakdown presented by the president shows that proposed recurrent expenditure is N4.04 trillion, statutory transfer is N492.36 billion, there is a sinking fund of N120 billion, while capital expenditure is N2.031 trillion.

    Mixed reactions trail 2019 budget proposal

    Apparently wary of the performance of the previous budget, a lot of stakeholders have expressed concern that the 2019 budget need to address a lot of grey areas.

    Firing the first salvo, the Director General of the Lagos Chamber of Commerce and Industry (LCCI) Muda Yusuf in a statement made available to The Nation while noting that the latest Gross Domestic Product (GDP) statistic released by the National Bureau of Statistics (NBS) shows that the Nigerian economy grew by 1.81% year-on-year in the third quarter of 2018 amongst others, he observed that  this performance is lower than the LCCI, IMF and Economic Recovery and Growth Plan (ERGP) growth forecasts of 3.5&, 2.1% and 4.1% respectively for 2018.

    The managing director of Cowry Asset Management Limited, Johnson Chukwu, on his part, said the projected revenue from crude oil, based on production and price, was cause for worry.

    “I think the oil price benchmark is too optimistic. We have never reached 2.3 million barrels per day production in the last four years. And now, the oil cartel has cut production level. If you cannot achieve your revenue projection, it becomes difficult to carry out capital expenditure plans. We would surely overshoot our deficit projections again and as usual, we would borrow more.”

    In the view of Gabriel Ikese, a public affairs commentator, “Presenting the 2019 budget proposals in December should not be an excuse to delay the passing of the bill within reasonable time. 2017 and 2018 budgets were presented November, fairly reasonable time frame but still lingered for over 5 months at the National Assembly.”

    Members of the legislature, he stressed, “should be patriotic enough to put aside personal interests and frivolous allegations from any quarters for the overriding national interest in passing the budget expeditiously. With commitment and adequate capacity, the budget can be passed in 30 working days.”

    The 2019 budget proposal should be expeditiously considered and passed in record time as a test of integrity and attestation of a responsible legislature. This would change the negative perception of lawmakers and the hallowed institution of the National Assembly.

    Also speaking in an interview with The Nation, Sola Fijabi, Managing Director/CEO, Brookes and Blakes, a media relations company with expertise in the emerging economies, said the sign at the macroeconomic level hardly shows any promising except in the microeconomic levels.

    Worries over budget delay

    In the view of Prof. Sheriffdeen Tella, Professor of Economics, Olabisi Onabanjo University Ago-Iwoye, Ogun, “The delay in budget approval in the last two years has affected the growth of the economy because such delay will not allow for the implementation of the capital part if the budget to a large extent and the implementation of capital budget is what engineers growth in every economy.”

    Pressed further, he said, “The delay is very bad and it has been affecting the economy in the last three or four years because in the last three or four years budget has not being passed earlier than May or June which is very bad for the economy so the current delay will also bring about the same thing.

    “The last report states that the economy grew in the last quarter of the year but in the first two quarters of the year there was no such growth, when you have that kind of situation it means that if the budget is not passed in time; that growth that we witnessed in the last quarter of the rest will start growing down by the first, second quarter of the year so if the budget is passed in time definitely that growth will continue and it will help us to get out of the economy problem that we are in now.”

    According to him, “The problem is not with the government but the legislature, the government has submitted the document but also the government didn’t send it to the nearly 2017 the government submitted the budget early enough on October 7 but was not passed. Now the government submitted late but it is not good for the legislature to delay especially because of the period that we are in. The election period; they ought to have done everything before they embark on a full scale politicking. So now that that has happened one will implore them that as soon as they come back, they should not focus on the out one of the election anymore but on how to pass the budget in time so that the economy will continue go forward.”

    The university, who reiterated that the perennial delays in passing yearly budgets showed that the legislature was ignorant of its responsibility, said, the early passage of the budget would promote economic growth and development.

    “The Nigerian economy depends on government’s budget to function properly. The private sector particularly needs to see government direction to plan and execute their plans. Early passage of budget helps in this regard. The private sector is the major participant in the capital market.

    “Growth enhancing activities in the capital market are negatively affected by the delay in passing the budget,” Tella said.

    He noted that passing the federal budget in good time was capable of promoting economic growth, assisting private sector for optimal business performance as well as energising money and capital market activities.

    Tella explained that early budget passage would promote planning in the lower levels of governments and the private sector.

    In the assertion of Prof. Leo Ukpong of University of Uyo, “It is bad for the economy. One, it sends a bad signal to investors in terms of expenditure. Projects that are approved or expected to be involved in, when they delay the budget that means those budgets will also be delayed. In terms of expenditure activities, that will also delay.”

    The second major problem, he stressed, “Is in terms of uncertainty, it creates fear because we don’t even know when they will approve it so those who want to invest and those who have contracts, all those things will slow down. The question is not whether it will be bad for them economy the question should be how long the budget will be delayed? We do you know because right now we are in election cycle and right now most of the focus right now is on election so this may throw things up for about two to three months. I hope it is not that long, before they will focus on the budget. We don’t know who is coming in and no party will like to pass a budget when you are not sure your re going to be there so generally, we are going to see a drop in a lot of activities, we are going to see a drop in stock market especially the foreign investors hold back and those are all negative feedbacks of negative effect of the delayed budget.”

    Like Tella, Ukpong argues that “Constitutionally budget should be passed one year before the next fiscal year so that we don’t have any problem. Unfortunately that is in our constitution and it is the right thing because it is like saying I should pass a budget for what I will do next year so that the budget is approved and then the allocation in terms of payment can start taking place. I think every other country that is what they do. They make sure that one year ahead budget is on ground so that have start fighting for the other year at least we have money on ground to keep the government going if you follow USA you will see that they shut down the government for about three weeks because there was a budget fight between the parties.”

    On the forward, Ukpong, who has expertise in Economics, Energy Economics, Monetary Economics, advises that the constitution need to be strengthened. “The presidency as the executive must do everything to make sure that the budget is approved one year before we start reading other expenditure so that it doesn’t completely throw us off. Right now we are hoping that they will finish election and focus on budget.”

    Mr. Sola Oni, a chartered stockbroker and Chief Executive Officer, Sofunix Investment and Communications, said delay in the passage of the budget was highly injurious to economic growth and development.

    “This enables them to advise their clients on taking positions and reviewing their portfolios accordingly.

    “At macro level, early passage of the budget implies prompt implementation of capital projects. This is critical to the growth of the economy as it has impact on growing the Gross Domestic Products (GDP),” Oni said.

    Light at the end of the tunnel

    In the view of Zainab Ahmed, Finance Minister, Nigeria recorded the highest capital spending in history under the present government led by President Muhammadu Buhari. She was optimistic that the 2019 budget would achieve its set objective.

    “You see, that’s the thing we can’t dictate to the National Assembly – how they do their work. In the process of budget preparation the Ministry of Budget and National Planning meets with every MDAs to defend their budget before us and then we collate that budget and submit to the National Assembly. We simply cannot decide or dictate to NASS how they handle the budget process or any of their processes for that matter. They are a different organ of government. It’s just like saying the judiciary and the executive is trying to determination how they take cases in court you can’t do that.”

  • Economy on the path of growth, says minister

    Nigeria’s economy has turned the corner and is now firmly on the path of growth, Budget and National Planning Minister, Udoma Udo Udoma has said.

    Pointing to the recently released fourth quarter numbers by the National Bureau of Statistics, the Minister told a gathering of media practitioners at the Nigeria Union of Journalists Press Centre, that the report shows the strongest performance since the economy emerged from recession.

    “It shows that 39 out of 46 economic activities are now growing. Agriculture is growing; Manufacturing is growing, and Services has recorded its best performance in 11 quarters. Particularly notable is the fact that the growth is driven by the non-oil sector which has recorded its strongest growth since the fourth quarter of 2015. In short, we have turned the corner and are now firmly on the path of growth, he said”

    Senator Udoma said the current real GDP growth performance is most encouraging and shows a movement in a very positive direction, especially with regard to the non-oil sector performance; and assured that with the Buhari Administration’s continuing commitment to the implementation of the ERGP, the economy is expected to further strengthen in 2019, and over the medium term.

    He explained that at inception the administration faced real crisis in the economy which included a sharp drop in oil revenues with consequent fiscal challenges as the Federal Government had to struggle to meet its commitments while many states were unable to pay salaries on a regular basis.

    Investors and businessmen complained about the difficulties they encountered in doing business in Nigeria; Foreign reserves had dropped from $37.33 billion in June 2014 to $23.81 billion in September 2016 and inflation had risen from 9.2 per cent in June 2015 and peaked at 18.5 per cent in December 2016 coupled with exchange rate instability as the Naira lost value in the parallel market, ultimately falling to as low as N520/$.

    These, he further explained, led to the economy dipping into recession by the second quarter of 2016 registering GDP contraction of -1.49 per cent from where it dipped further to -2.34 per cent by the third quarter. Government had to take immediate steps to stop the economic drift and reverse the collapse, he added.

    He enumerated the steps to include the introduction of an expansionary budget in 2016 christened the Budget of Change, because once an economy begins to decline and goes into recession, the private sector is usually reluctant to invest.

  • Guinness lifts economy with projects, campaigns

    Guinness Nigeria Plc is championing community development initiatives meant to promote economic development and better society. This, the firm is doing through  developmental projects and campaigns.

    Guiness Nigeria Plc  is not only empowering farmers with credit facilities, access to market and training but also supporting campaigns on responsible drinking in the interest of the society.

    For instance, the National Bureau of Statistics (NBS) data showed that  Nigeria had about 11 million motor vehicles at the third quarter of 2017.

    Around 3,000 car accidents occur every day around the world mainly due to alcohol abuse and human errors like use of phones when driving, disobeying traffic light and signs, impatient drivers , over speeding, bad roads, tires, driving under exhaustion among. This led to 12,077 road accidents of which 5,400 persons died in 2015.

    Guinness Nigeria, as part of their corporate strategy for reducing alcohol-related road crashes, has set ambitious responsible drinking targets and is committed to measuring and reporting on every programme. The firm promotes the  Diageo and United Nations Institute for Training and Research (UNITAR) partnership which has been running globally but will be implemented in Nigeria.

    The UNITAR Road Safety Conference, recently held in Abuja served as an outlet to discuss solutions and share best practices and learnings on road safety legislation. It was also meant to look at regulation that will help address the issues of road safety in the country.

    At the event were Minister for Transport, Rotimi Amaechi, Executive Director of UNITAR, Nikhil Seth, Managing Director of Guinness Nigeria Plc, Baker Magunda, and over 100 local and international experts and stakeholders. The stakeholders introduced plans to unveil major road safety engagements to reduce traffic death and injuries and improve road safety both globally and in Nigeria during the conference.

    The partnership with UNITAR and Federal Government will deliver a high-visibility drink driving enforcement campaign in Lagos. It will involve the training of Federal Road Safety Corps (FRSC) officers in planning, running and evaluating road-side breathalyzer checkpoints using the model created by renowned expert Othon Sanchez; who successfully ran a sustained drink drive campaign in Mexico City which delivered a 40 per cent reduction in crashes and fatalities. The objective of the three-year campaign is to increase awareness and knowledge among drivers about the risk factors associated with drink driving and also curb alcohol-related fatalities.

    The programme Sanchez, a former police chief of Mexico City and a founder of “Conduce Sin Alcohol Programme” delivered a reduction in drinking and driving related crashes and fatalities. The training aims at addressing drinking and driving and the commitment to the “Drive Dry” campaign – meaning driving without alcohol consumption in the hope of reducing fatalities on the road; is the model that will be adopted by Guinness Nigeria and effected through the partnership with UNITAR and The Ministry of Transportation.  It is also to note that the initiative by Sanchez was also in partnership with UNITAR and Diageo and yielded results across Africa, Asia and Latin America.

    The target for Guinness Nigeria is to ensure that as a corporate organisation there is a strategic plan to achieve the United Nation’s Global Goals and support WHO’s programmes on health. With UN, road safety targets have been included in the final text of the new Sustainable Development Goals adopted by UN member states in New York. A specific stand-alone target in the Health Goal is to reduce road traffic fatalities by 50 per cent by 2020 and a target on sustainable urban transport in the cities.

    Guinness Nigeria is also engaging other stakeholders to curb the scourge of road crashes, in Nigeria. It launched the Annual Ember Months Campaign in partnership with the Federal Road Safety Corps (FRSC) to sensitize drivers on the dangers of drink driving especially during the end of the year through the festivities; to the New Year, when vehicular movements on the roads are usually high. The Annual Ember Months Campaign by Guinness Nigeria has been ongoing for 14 years and has garnered much impact.

     

  • Buhari renews pledge to boost economy, fight graft

    ALL Progressives Congress  (APC) leaders yesterday took their message of hope and better future for the country to Sokoto State. They were led by President Muhammadu Buhari.

    It was at the party’s presidential campaign rally at the Giginya Township Stadium in Sokoto, the state capital.

    At the rally were APC National Chairman Adams Oshiomhole, the party’s Presidential Campaign Council Co-Chairman Asiwaju Bola Ahmed Tinubu and a leader of the party in the state, Senator Aliyu Wamakko.

    They were received by a mammoth crowd of supporters who thronged the stadium.

    President Buhari renewed his promise to strengthen the economy, fight corruption and guarantee security.

    The President, who arrived at the stadium amidst cheers, promised to re-engineer the machinery of governance to make life more comfortable for all, especially, by boosting agriculture.

    According to him, farmers now enjoy better yield through the government responsive patronage and investments in agriculture programmes.

    “It has afforded a number of them the legitimate means of responding to their financial needs and sustained food security,” the President said.

    He explained that insecurity, particularly in Borno and Yobe states, and the entire Northeast, was being tackled with appreciable successes.

    “We are doing our best and Borno people can testify to that,” Buhari added.

    Acknowledging the efforts of Senator Aliyu Wamakko in uniting the party in the state, the President pointed out that his administration was doing everything possible in  fighting corruption, adding that “we are not relenting and any one established to be guilty will face appropriate penalty”.

    Tinubu told the audience about President Buhari’s and the APC’s determination to make Nigeria a better place for all.

    According to the former Lagos State governor, Buhari has always been the best and trusted candidate to steer the ship of governance at the centre.

    Tinubu said: “He (Buhari) has the moral character, honesty and zeal to move the country to the ‘Next Level’ of prosperity.

    “Farmers in Nigeria have never had it good like under this APC government, being led by Buhari. I am convinced that Nigerians will vote for him to move the country in the right direction.”

    Oshiomhole said Nigerians were ready to give their votes to Buhari who he described as “a man of the people” with national acceptance across the states.

    According to Oshiomhole, “that is why we are behind the voice of the people to ensure his re-election”.

    On the opposition Peoples Democratic Party’s (PDP’s) outcry over alleged plot to rig election, Oshiomhloe reassured that APC’s grand support was enough to send a signal to the opposition.

    He said: “It is clear that since their defeat in 2015, the PDP has lost ground and the machinery of rigging, which they were used to, hence the allegations.”

    Presidential Campaign Council’s Director-General and Transport Minister Rotimi Amaechi explained the need renew the President’s mandate, saying that doing so will put the country on the right pedestal of good governance that would ensure the transformation of the  economy.

    The former Rivers State governor announced that a blueprint was being developed for the implementation of the concluded rail lines designed to link Jibia- Gusau- Sokoto and Kebbi.

    In his welcome address, the party chairman in the state, Sadiq Isah Achida, told the rally that the love for the President and the APC by Sokoto people remained unprecedented, describing the coming of Buhari as a home visit and not one for soliciting votes.

    He spoke of the Sokoto business community’s plea for the President to approve the reopening of the Illela border, as they were willing to pay duties.

    Wamakko, who doubles as the Northern Senators’ Forum Chairman, assured the President of the resilience of Sokoto people whom he said were ready to vote Buhari and all APC candidates.

    Also at the rally were: Interior Minister Abdulrahman Danbazau, Minister of State,Trade & Investment, Aisha Abubakar; Zamfar State Governor Abdulaziz Yari; Senators Ahmed Sani Yariman Bakura; Senators Ali Modu Sherif and Abubakar Umar Gada.

    National Women Leader Hajiya Salamatu Baiwa, Sokoto State APC Campaign Council Director-General Muhammadu Maigari Dingyadi and Musa Bashar were there. Shiekh Malam Badhir Gidan Kanawa led the opening prayer.

    The campaign team also stopped over in Birni Kebbi, the Kebbi State capital.

  • 2019: Forlorn hope for economy

    Ibrahim Apekhade Yusuf, Charles Okonji and Medinat Kanabe in this report, capture the fears and apprehensions being expressed by a cross-section of Nigerians on the shape of things to come in the already troubled socioeconomic landscape

    For many discerning Nigerians, the nation’s socioeconomic outlook for 2019 is indeed ominous. This is even more distressing in view of the forecast by economic watchers both within and outside the country, many of who have given damning verdict.

    Economy on the red

    To the average Nigerian, what matters is welfare and quality of life, especially lower food prices, reduced cost of healthcare, improved transportation system, constant power supply and security of lives and property. But with a population of over 86 million people living in extreme poverty, and unemployment rate at 21.8% in Q3 2018, from 13% in Q1-2016 (see NBS Q3-2017 Job Report) and many employers in both private and public sectors finding it difficult to pay workers’ salaries as at when due, there are concerns that things may get pretty messier in 2019.

    If there was any doubt about the parlous state of the economy, President Muhammadu Buhari erased that doubt when he addressed governors about a fortnight ago. Nigeria’s economy in bad shape, Buhari pointedly told the governors at the closed-door meeting with the 36 State Governors of the federation in Abuja.

    Even the report presented by the National Bureau of Statistics (NBS) hardly showed any positive image. The agency lamented about the alarming job loss, which currently shows about 20 million Nigerians lost jobs in the last few years with statistics worsening in three years.

    Budget blues

    Since President Buhari presented the N8.83 trillion budget to joint sitting of the Senate and House of Representatives, controversies have continued to rage over the overly ambitious projections.

    For the year 2019, a general slowdown in the real growth rates of economic activity in both the oil and non-oil sectors has been projected at 1.9% by the World Bank.

    This rate is well below the 2019 budget projection of 3.01% and is not enough to create the needed jobs for the growing population of the country or for the attainment of the Sustainable Development Goals, SDGs, some analysts have averred.

    2018 in perspective

    The latest Gross Domestic Product (GDP) statistic released by the National Bureau of Statistics (NBS) shows that the Nigerian economy grew by 1.81% year-on-year in the third quarter of 2018. This figure indicates an expansion in the economy for Q3 2018, compared to the 1.17% GDP growth rate of the corresponding quarter in the previous year. There is also an improvement in the quarter-on-quarter GDP growth rates from 1.50% in Q2-2018 On the other hand, the year-on-year nominal growth rate was 13.58%. The real GDP value for Q3 2018 stood at N18.1 trillion, whereas its nominal value was N33 trillion, reflecting the effect of inflation in Nigeria.

    This performance was however lower than the International Monetary Fund (IMF) and Economic Recovery and Growth Plan (ERGP) growth forecasts of 3.5&, 2.1% and 4.1% respectively for 2018.

    Data from the Organisation of Petroleum Exporting Countries (OPEC) showed that oil prices are trending down at $59.1p/bl on 17th December 2018 from its peak of $88p/bl in the month of September and October 2018. This recent oil price is already below 2019-2021 Medium-Term Expenditure Framework (MTEF) and 2019 budget benchmark of $60p/bl. The declining global oil price will likely distort government’s economic projections for 2019 as well as impact adversely on its MTEF if the trend is not reversed.

    Exchange rate was relatively stable in 2018 in different segments of the FX market. For instance, at the parallel market, the naira hovered within the band of N361/$ – N363/$; the interbank foreign exchange market moved around N305.75/$ – N306/$; and at the I&E FX window, the naira traded within the tight band of N360.95/$-N363.32. Higher oil prices and stable local production levels of crude oil are the two key critical factors that helped to restore calm in the forex market.

    Consequently, in a bid to support the value of Naira, the CBN maintained consistent intervention; the apex bank put $11.3 billion in the various segments of the interbank market from January to December 2018.

    The local forex market is already responding to recent sharp fall in oil prices. For instance, the local currency has dropped to N373/$ in the parallel market from N363/$ it traded for a better part of 2018. As foreign investors continue to pull their money out of Nigerian assets, stakeholders are worried that the Central Bank of Nigeria may not have enough foreign reserves which currently stand at $42.1 billion, to defend the naira against a possible further weakening of oil prices.

    After 18 consecutive months of decline, inflation rate began to rise in August 2018 with headline inflation of 11.26% in October 2018 compared to 15.13% in January 2018 and 18.7% in January 2017. Following the bottoming out of high base effect in August 2018, the country is likely to see headline inflation trending up in the early part of 2019.

    The Debt Management Office (DMO) put the nation’s total debt stock (federal, FCT and states) at N22.38 trillion ($73.21 billion) as at June 30, 2018, thus raising concerns about the fast-growing public debt profile and the country’s fiscal sustainability in the medium term.

    The 2018 World Bank Ease of Doing Business report, ranked Nigeria 146 out of 190 countries. The report showed that the country took a step backwards from the 145th position it ranked in 2017. The ranking takes to account, trading regulations, property rights, contract enforcement, investment laws and availability of credit.  This ranking did not reflect efforts of the present administration through the Presidential Ease of Doing Business Council (PEBEC) and series of Presidential Executive Orders targeted at improving the business environment.

    Faulty oil benchmark

    According to Muda Yusuf, Director-General, Lagos Chamber of Commerce and Industry (LCCI), the nation’s economy remained dependent on a small oil sector (less than 10% contribution to GDP and 96% of foreign exchange) for the bulk of its fiscal revenues and foreign exchange earnings.

    Thus, with little progress realised from the ongoing effort by the government to diversify revenue sources, but constrained to use oil price as the baseline for 2019 projections.

    Citing estimates by capital economics analysts, Yusuf said: “Every $10-per-barrel fall in oil prices boosts incomes by about 0.5 to 0.7% of gross domestic product in major emerging market oil importers. The same discount will cause a 3-5% decline of GDP in most of the Gulf economies, and a slowdown of 1.5-2% of GDP in Russia and Nigeria on an annualised basis. Given the challenging economic conditions, key policy reforms would be imperative to support and sustain macroeconomic stability.”

    Economic managers need to do more

    In the view of Mazi Okechukwu Unegbu, lawyer, arbitrator and stockbroker and currently Managing Director/Chief Executive, Maxifund Investments and Securities Plc, the economic outlook for the coming year is a mixed bag of some sorts.

    Unegbu who is unsparing of the current economic managers holds the view and very strongly too that they are to blame largely for the way things are.

    “People, who understand the economy, know that you must have to do environmental impact assessment. Our regulators have not done an environmental impact assessment forgetting that the Nigerian economy cannot be compared to the UK or the US. So you cannot introduce the rules of engagement in those economies to Nigeria because we are still developing and that is why the economies like Malaysia, Singapore will always come with policies that would help their economy. Here, there is nothing like that. Nobody is thinking about that. What are those incentives or policies that you bring on board to encourage local investors? These are things you do and we know where we are heading. So that people will start forecasting. People are disturbed here, been happy earning their salaries without thinking much about the nation’s economic development. It is rather very sad. This is why we are saying give us people that would know the direction of the economy.

    “If you look at the Brazilian election, the moment one of the candidate was announced as leading, the stock market spiked up in Brazil because the people have been studying their various policies. Now between you and I, tell me, if you look at the current president and APC, what economic policies have they been canvassing upon? There is none. The PDP, what policies are they canvassing upon, none? All you hear is that APC is confused, PDP is corrupt. That is not what we should be living upon. We should be looking at what they are bringing to the table apart from the bickering of the political parties. If they say they want to do this so that things will happen, I will create jobs because a lot of jobs have been lost, inflation is on the increase. So where are we heading to? So these are the things investors would be looking at to guide them to be able to make investment in an economy that is supposed to be doing well amongst its peers in the world. So it’s unfortunate.”

    The one-time president of the Chartered Institute of Bankers of Nigeria (CIBN) who commented on the 2019 budget said the fiscal policy which is still awaiting a passage from the National Assembly hardly portrays a positive forecast, adding that the benchmark is as well as ambiguous and highly ambitious.

    Nothing to cheer about

    In the view of Victor Ndukauba, Deputy Managing Director of Afrinvest West Africa Limited, one of the leading independent investment firms, the signals are not positive at all.

    According to him, the socioeconomic outlook in the coming months shows that Nigeria should prepare for the worse. While offering a prognosis of the parlous state of the economy, he said a combination of factors may be responsible for this.

    “Whereas other countries are becoming globally competitive players we are not playing in the big league. Imagine a market like Nigeria where investors would rather pull out and then take the money back into developed market. So the cocktail of both internal and external factors unfortunately is happening at the time when the country is heading towards election. This is ordinarily the time we should be focusing on growth, job creation focusing on infrastructure but we are now more cut off in the political circle. For me, the outlook for the rest of the year and beyond as we go into election mode is that there is not going to be a lot of work in the area of governance. The government is literally going to shut down. So the outlook is not very good for the economy, it is not a positive outlook.”

    On what the economic managers should do to turn things around in terms of quick wins, he waxed philosophical.

    “A quick win suggests that there are some potentially low hanging fruits and all that. Now we could argue that one thing they could do is to lower the benchmark Monetary Policy Rate (MPR). Perhaps you would like to encourage a bit of growth but unfortunately that would be a wrong move to take at this time when inflation has gone southward. What Nigeria needs to do majorly is to take some very hard decision many of which require fundamental reforms around how we do business and we have to unlock the capacity of the economy.”

    Raising some posers, he queried, “Is Nigeria sufficiently wealthy? Does it have access to sufficient capital to be able to unlock the economy? Ultimately, I think the jury is out. I think the government itself recognises that it hasn’t achieved a lot of what it had hoped it was going to be able to achieve and they are under pressure. But ultimately, I think the pressure itself is also sending a signal to everyone else. So we really need to get the economy right because I personally get worried when I think about some of the factors around the demographics. “Population is growing at 2.6 per cent annually and any economic growth or GDP that is not at least doubling that number is suboptimal. So we should be doing at least 5.2 per cent year-on-year in order to be able to grow the wealth of Nigerians. Just like our population is growing, it means that we are actually becoming poorer; hence it was not a surprise when they said we are now the country with the largest active number of poor people across the world.”

    According to him, there is need to get the economy growing back to at least 6-10 per cent growth rate prior to the crisis in 2014. “We really need to get the economy moving because the impact is there. Jobs are not adding and everyone who has a job is under so much pressure from those who depend on their income to survive at the end of the day. So it’s tough.”

    Low hanging fruits

    Despite the fears being expressed by many on the state of the economy, there appears to be some positives in the horizon in the agriculture sector for instance, where the federal government interventions have made a lot of difference and much of which are already yielding dividends, especially among the medium small scale enterprises (MSMEs).

    The Senior Special Assistant to the President on Industry, Trade and Investment/Secretary to the Presidential Enabling Business Environment Council, Dr. Jumoke Oduwole, who spoke recently in Lagos during the Lagos Chamber of Commerce and Industry International Investment Conference with the theme: ‘Promoting Industrialisation for Economic Recovery and Sustainable Growth,’ empahsised that there is a lot going for the country in the SME space.

    Represented by an official of the council, Mr. Soji Akinyele, Oduwole disclosed that the action plan targeted the SME sector of the economy with 11 initiatives. The first action plan contained eight initiatives for the sector.

    She added that with the plan, the government would execute the new initiatives and further deepen the existing reforms to deliver significant benefits to the SMEs.

    She stated the new initiatives added to the plan took the Nigerian environment into consideration.

    She said, “One of those initiatives is trading within Nigeria, which is the internal version of the World Bank indicator, which is called trading across border. While we believe that export and import are important, we also believe that working within internal network of Nigeria is important.”

    Oduwole pointed out that the first phase of the national action plan was responsible for moving Nigeria 24 places up the ladder of the World Bank Ease of Doing Business ranking.

    The government at all level should enhance the ease of doing business in the country, the local government, States and federal government should work towards the provision of infrastructural facilities, like: good roads, security, upgraded railways service, among others. The federal government and its partners should strive towards the improvement of the power sector. The Lagos State Employment Trust Fund that provide credit facilities to MSMEs at 5% interest rate as well as the Ogun State Government partnership with BOI that provide credit facilities to MSMEs at single digit should be emulated by other states.

    If the news from Vice President Prof. Yemi Osinbajo is anything to go by, the MSMEs though small in units, account for 50% of our GDP collectively.

    Osinbajo who has been at the forefront of the TraderMoni initiative where he has had the opportunity to traverse different parts of the country revealed in his official twitter handle, @ProfOsinbajo that recent studies have shown that SMEs contribute to over 55% of GDP and over 65% of total employment in high income countries also that SMEs and informal enterprises account for over 60% of GDP and over 70%of total employment in middle income countries, even as he assured that the sector would add a lot of jobs in the year.

    Like Osinbajo, Hajia Zainab Ahmed, Minister of Finance also holds the strong view that there may be a lot to hope for in the coming year if the positive fundamental in key sectors is anything to go by.

    Addressing some newsmen in Abuja recently, the Finance Minister said the NextLevel campaign of the ruling party was going to translate to a lot of goodies to the electorate.

    According to her, “The president has done extremely well. People should remember where we are coming from and where we are, right now. We have done a lot of very good programmes and projects. Some have been concluded but there is still a lot that needs to be done. So we need to vote for him and return him as president so that he can complete the good work he has started.”