The Nation Newspaper

Tag: Economy

  • ‘How govt can stimulate economy’

    There is no quick fix to the recession, economists and job creation experts have said.

    Except the government breaks its monopoly in the real sector, opening the economy for Foreign Direct Investment (FDI), the recession would bite harder, they noted.

       The experts spoke yesterday at a lecture: The challenges and opportunities of managing a recessionary economy: The American experience, organised by the Alumni Association of Hubert H. Humphrey Fellowship at the Nigerian Institute of International Affairs (NIIA) on Victoria Island, Lagos.

      It was held in collaboration with the United States Mission to Nigeria.

    The association’s Patron and National President of Nigerian-American Chamber of Commerce, Chief Olabintan Famutimi, described Nigeria’s recession as self-inflicted, saying the nation’s dependence on one source of income was largely responsible for the situation.

    He blamed politicians for lack of innovation to boost the non-oil income and lift the nation out of the mono-economy quagmire.

    Famutimi said recession was a universal phenomenon not peculiar to developing countries. Since the cause of Nigeria’s recession was as a result of failed government’s policies, he advised the nation to look inward for solutions.

    The United States Consul-General John Bray, who delivered a keynote lecture, defined recession as “a significant decline in economic activity that lasts more than six months, normally visible in real gross domestic product, including, employment, industrial production, wholesale-retail sales”.

    The envoy noted that America had faced 47 recessions since 1790, saying each time the country overcame recession, its government and people usually learned new lessons about the best way to get American economy on the path to recovery.

    Bray said: “The best lesson we have learned is that recessions offer government an opportunity to make the case to the people for taking action on overdue economic reforms. Some of the U.S. most important long-term efforts in addressing economic challenges have come in the form of legislative and policy changes.”

  • Of elite spat and the economy

    Of elite spat and the economy

    Nothing epitomizes our tragedy as a nation than the latest squabble among the monetary elite over issues that would in normal times be deemed classified. For while I am well assured that these are no ordinary times, we must agree that it goes beyond the pale for an erstwhile number one banker to dare to hang the federal government and the monetary authorities out there in the merciless sun like the Emir of Kano, Muhammadu Sanusi II did at the the Savannah Centre for Diplomacy, Democracy and Development dialogue last Friday. Although never known to take prisoners, it was again vintage SLS in what is arguably the most emphatic put-down of the Buhari administration till date.
    To be sure, that would not be the first time the monarch will be giving the federal government a hiding. Recall that the monarch had at the 15th meeting of the Joint Planning Board and National Council on Development Planning in Kano August 24 similarly took the Buhari-led federal government to the cleaners: “If you take a brand-new car and hand it over to a driver who doesn’t have a licence to drive it and you are involved in an accident, you can’t say you are surprised, unless you are some kind of an idiot…We should not just keep blaming the previous administration; we also made some mistakes in the current administration”.
    However, whereas Nigerians may have lately heard such descriptions as “clueless” and “incompetent” in what has become the routine characterization of the administration; the monarch’s latest summation that “the problem of the current government is not having the right policies to fix the current economic woes” would appear to mark the final parting of ways between him and the Buhari administration, a final statement about his perception about those running the government. Here, it does not appear to matter whether the issue is the federal government’s 2017-19 borrowing plan which he insisted would not sail through, or the Central bank loose monetary management of which he accuses the latter of being only a little more than an appendage of a bumbling fiscal authorities, one observes, not just his barely disguised contempt for the judgment of those calling the shots but a disavowal of everything that the Buhari administration is doing to stop the downward slide in the economy.
    “I can tell you for free, if the Senate today approves that we can borrow $30bn, honestly, no one will lend to us. It should be approved and I will like to see how you will go to the international market with an economy that has five exchange rates”, he says of the now controversial loan request.
    Rather gloatingly, he would not hesitate to go for the apex bank’s underbelly: “CBN claims on the federal government now tops N4.7 trillion, equal to almost 50 per cent of the FGN’s total domestic debt… This is a clear violation of the Central Bank Act of 2007 (Section 38.2), which caps advances to the FGN at five per cent of last year’s revenues”. The country’s heavy indebtedness, he further claimed, has led into the situation in which out of every one naira made, 40 kobo of it goes to debt repayment and 60 kobo is left for salaries, health, education, power, and infrastructure.
    That was Muhammadu Sanusi II at the SCDDD dialogue last week. Although the president’s spokesman and that of the apex bank have since issued separate statements denying the substance of the emir’s charges and accusation, it is expected that there will be no shortage of opinions on the matter in the coming days if not weeks over what smacks of the monarch’s indiscretion.
    Was Sanusi in order? To start with, we must see something unusual in the revered monarch coming out as he did. Surely, the matter goes beyond stating the facts as he saw them; rather, it is about the exploitation of the revered office for a less than altruistic ends by an individual known to be given to exaggeration. Remember the erstwhile number one banker who could not even get his figures right before hitting the road to disclaim the other party only to be forced to eat the humble pie?
    One had thought before now that mindless activism was incompatible with the revered institution of the monarchy, particularly when the occupant is an individual that has not only served at the highest policy levels but retains a measure of privileged access to the seat of power. Even permitting that his advice was shunned by hierarchs of the administration, would that suffice to take the administration to the laundry house? And who is making the judgment call? The lone individual who think he has all the answers as against a government that has the benefit of alternative viewpoints? And to what purposes? To force a change of direction or to needlessly antagonize the government? And who wins?
    In the convoluted public space, Nigerians can permit themselves the luxury of which factions of the elite to support on the issue, there can be no debating the damage that such tactless interjection can do to the public cause. For while no one denies that the economy is in terrible shape; or that the therapies being applied by the managers are having their desired effects; and just as a lot has been said of the insularity of this administration, particularly its reluctance to be open to new ideas, the real issue really is whether what the nation deserves at the moment is an ‘all-knowing intellectual powerhouse’ firing all cylinders from outside of the cathedra of power. At this time, what we must worry over are contributions that are not only unhelpful but are clearly designed to maximally distract.
    What alternative policies is Emir Sanusi offering? Nothing that the public is not already aware of. First, he is averse to debts. That is understandable. Unfortunately, he has not told us where the funds to finance the huge infrastructure gaps will come from. Are we to assume that this would also come from the nation’s reeling private sector? Secondly, he wants the CBN to let go of the naira. Yes, for the naira not only to find its value but to eliminate the multiple exchange rates. How that would address the current forex fetish, he does not tell. Or even crisis of management occasioned by the severe shortage of foreign currencies. Or the tribe of the currency speculators who have long mastered the art of shifting the goalposts at every whim? Easier, it appears to sell the mantra of a free floating naira than confront the delinquencies of the elite, the mind-boggling capital transfers which offer no tangible returns to the national economy, and the terribly short-sighted policies which have nursed the climate in which industries which ought to be sources of forex to the nation are themselves hung on the narrow forex market.
    Surely, that is neither what the nation want nor desire.

    .

  • Hope rises for economy as Nigeria, others get OPEC relief

    Hope rises for economy as Nigeria, others get OPEC relief

    The Organisation of the Petroleum Exporting Countries (OPEC) OPEC stunned the business world at its 171st Conference last Wednesday. The cartel announced that its members will cut production by 1.2 million barrels daily. Nigeria, Libya and Iran were exempted. Assistant Editor NDUKA CHIEJINA, who was in Vienna, the Austrian capital, venue of the conference writes that the planned cut remains the most significant business decision taken by the cartel in a decade.

    After some failed attempts, the Organisation of the Petroleum Exporting Countries (OPEC) has taken a step to protect its members’ pot of cash. Skeptics were confounded last Wednesday when members of the cartel agreed in Vienna, the Austrian capital, to cut supply as outlined in Algiers two months ago.

    The cartel agreed to cut production by about 1.2 million barrels a day to 32.5 million. It also secured a commitment from Russia to reduce its output by 300,000 next year. Non-OPEC members were also convinced to key into the deal.

    It was OPEC’s first production cut  in eight years and a move intended to reduce the global oil stockpiles which have grown to unmanageable levels as well as boost the revenue of member-countries, many of whom have slid into financial crises.

    The journey to the historic cut was not without intrigues, petro-diplomacy and stiff opposition. Those opposed to the deal were allowed to part ways with the organisation if it sailed through.  The ‘Algiers Accord’ first move to cut production, was reached in September. A high-level committee on the implementation of the ‘Algiers Accord’ was raised and mandated to form a consensus among OPEC members on the basis of a proposal put forward by Algeria to implement a new range of targeted production levels.

    After the accord came the petro-diplomacy of OPEC’s Secretary-General, Mohammed Barkindo. The shuttle diplomacy saw the Nigerian-born Barkindo visiting Iran, Iraq, Russia, Saudi Arabia. He was invited by the International Monetary Fund (IMF) in October for assurances that the cartel would find a solution to the ‘run-away’ price of crude oil. Beyond the trips, Barkindo used other approaches, including phone calls. It was learnt that he exchange messages with oil ministers’ of OPEC and non-OPEC member-countries on WhatsApp platforms, all in a bid to drum up support for the decision.

    “I had to go to Baghdad and Tehran to meet their leaderships, because at some points, the issues became more political than the issues on the ground, and therefore necessitated the need to meet with their leaderships to seek for their understanding, supports and to facilitate dialogue within the group”, Barkindo told The Nation in Vienna last week.

    At OPEC’s 171st Conference, the cartel’s President, who doubles  as the Energy & Industry Minister of the State of Qatar, Dr. Mohammed Bin Saleh Al-Sada, said member-countries “in line with recommendations from the high-level committee of the ‘Algiers Accord’, agreed to institutionalise a framework for cooperation between OPEC and non-OPEC producing countries on a regular and sustainable basis. The conference underscored the importance of other producing countries joining the agreement.

    “Russia was engaged on this and with the help and assurances from Saudi that OPEC members would agree to production cut in support of Russia’s assistance to get non-OPEC members to also agree to some measure of cuts to help raise the price of crude.”

    Barkindo told reporters that “bigger volumes of oil in storage mean lower prices, but the agreement of last Wednesday to cut production will accelerate the decline of global stockpiles.”

    Venezuelan Oil Minister Eulogio del Pino at the end of the conference told Bloomberg that “within nine months, OPEC’s deal should bring inventories closer to normal levels and potentially lift crude prices as high as $70 a barrel.”

    Barely days after the production cut announcement, the price of crude oil has crossed the $50 per barrel border with Brent reaching its highest level in more than a year. The deal is expected to bring global oil supply and demand back into balance early next year, faster than previously expected.

    Not a smooth sail all through

    But it was not a smooth sail. Indonesia, which only returned to OPEC last year after a seven-year absence threw spanner in the works as the deal inched towards completion. The returnee OPEC member was however sacrificed to see the deal through.

    Indonesia, which has been buying more oil than its production was sacrificed.  So, its objection to the planned cut at the minister’s’ meeting was a view the cartel could not entertain. The Asian country was therefore obliged to suspend itself again from the cartel.

    According to Bloomberg whose contact was privy to pre-decision negotiations at the ministers’ meeting, “the terms of the agreement obliged the Asian country to cut output by 34,000 barrels a day, yet its delegation was permitted to authorise a reduction of just 5,000. The difference – a minuscule 0.03 per cent of global output – was about to derail the biggest oil-market accord in years. A harsh solution was chosen: for a second time, Indonesia’s membership was to be suspended.”

    In his capacity as OPEC president, Al-Sada announced that Indonesia’s quota cut would be spread among other members in order to keep production from getting out of control.

    No cut for Nigeria, Libya, Iran

    Another issue that generated a lot of talk after the conference was the exclusion of Nigeria, Libya and Iran from the implementation of the production cut.

    Libya was exempted because of the ongoing crisis in the country since the death of its former leader Mohammed Ghadafi.

    The  grace was extended to Nigeria because of the activities of Niger Delta militants, who have consistently attacked oil infrastructure. The attendant effect of pipeline vandalism (which has not allowed the country to meet it daily production quota) on the economy, informed OPEC’s decision to leave out Nigeria.

    Barkindo said on the decision: “Nigeria is a very important member of OPEC. It has always been a leading advocate of market stability. What OPEC did in drafting the Algiers accord, if you recall, is to take into account the special circumstances of Nigeria plus Iran and Libya, to allow these other countries to restore their production capacity and capabilities before they can participate in any supply management.”

    Nigeria, whose output has been crippled by militant attacks on its oil facilities could see production rise to 1.65 million barrels a day next year from 1.57 million a day in October, Deutsche Bank AG analysts said in a report.

    “One of the key things, and potentially the deal breaker, will be what happens if Nigeria or Libya recovers some of their production,” said Spencer Welch, a director at consultants IHS Energy. “Will OPEC stick to the 32.5 million maximum, and if so, who will provide the extra cuts?”

    Task before Fed Govt

    To leverage on Nigeria’s exemption, the Federal Government  must find a way stop the militants in the Niger Delta from bombing oil facilities by adopting a peaceful solution, rather applying military force to solve the problem.

    By peacefully securing the goodwill of the militants to stop the attacks, the government will make gains from accruing revenue from crude oil sale and at a reasonable price.

    However, time is of the essence. The six months of assessing the agreement would soon expire and should the government and the militants failed to strike a deal, the exemption would be of no significant benefit to Nigeria and its economy, which is already in recession, will be the worse for it.

    But, there are concerns that “even if countries stick to their output caps, those that were granted exemptions could make the collective target unreachable if they boost production. The difficulty of monitoring non-OPEC cuts adds a further layer of uncertainty.”

    Olivier Jakob, managing director of Zug, Switzerland-based consultants Petromatrix GmbH lamented: “You do have a problem with production compliance for sure. Rising output from Libya and Nigeria – both exempt from cuts – will push OPEC production beyond the quota next quarter, while it will be very difficult to get 100 percent compliance from non-OPEC countries.”

    Financial giant and keen market watcher Goldman Sachs Group Inc. said in its analysis: “Focus will now shift to implementation. Evidence of compliance could add $6 a barrel to its oil-price outlook.”

    Another oil market analyst, Jefferies Group LLC, said: “OPEC’s adherence to the agreement will be critical and its track record is poor, while compliance by non-OPEC producers is even more tenuous.”

  • I will improve our poverty- stricken economy, says Gambia’s President elect

    I will improve our poverty- stricken economy, says Gambia’s President elect

    Gambian President-elect Adama Barrow on Saturday vowed to work for national unity and economic growth after power was peacefully transferred in the small West African nation for the first time in its history.

    The real estate mogul pledged to introduce an independent judiciary, promote media freedom, establish a two-term limit for the presidency and make the civil service transparent and accountable.

    He said that political prisoners would be freed and a truth and reconciliation process to “amend past injustices” launched.

    “The position of president is not an ordinary one.

    “I am seeking it to make a difference and give Gambia a new start so that the potential of the country and its citizens would be developed to the fullest,’’ Barrow, 51, said in a statement.

    Barrow said that he would form a government that represents all seven coalition parties that supported him during his candidacy.

    “The government will improve the poverty-stricken nation’s economy with a focus on agriculture, technology, energy and mining,’’ Barrow said.

    Report says Gambia, one of Africa’s poorest nations, currently heavily relies on peanut exports.

    Incumbent Yahya Jammeh, who had ruled the Islamic Republic of 1.9 million people for 22 years with an iron fist, conceded defeat, in an address to the nation on Friday.

    The former army colonel, who took power in a coup in 1994, vowed a peaceful transfer of power in January 2017.

    Barrow won 28 of 53 constituencies or 263,515 votes in Thursday’s polls, followed by Jammeh with 20 constituencies or 212,009 votes. (dpa/NAN)

  • How to revive economy, by union leader

    The General Secretary, Nigeria Textile Union and Vice President (Africa) of the IndustriALL Global Union, Comrade Issa Aremu, has urged the Federal Government to revive key industries for rapid industrialisation, job creation and poverty reduction.

    He made the call at a press briefing in Abuja to mark the 2016 Africa Industrialisation Day with the theme: Back to Basics: Revival of Basic Industries and Creation of Sustainable Employment.

    Aremu urged the government to make electricity supply steady to drive the industries.

    He said it was imperative for the government to diversify the economy and chart a road map to encourage industrialisation so as to exit recession.

    “The sectors include textile, garment, oil and gas, power, steel, engineering, solid minerals among others,” he said.

    Aremu implored  the  government to implement the 2014 National Industrial Revolution Plan for the country’s  growth.

    He noted that major stakeholders  agreed on the plan, pointing out that Nigeria is not short of development policies, but rather lacked the will to properly implement its many development policies.

    Aremu said it was unfortunate that many  years after their independence, African nations were still exporting their raw materials instead of adding value to them.

    According to him,  it is time for African countries to start processing their raw materials locally in order to generate employment and create wealth.

    He enjoined security agencies to curb smuggling across borders, noting that smugglers are undermining the growth of local manufacturing.

    Highlight of the activities to mark the 2016 Africa Industrialisation Day observed on November 21 include march for industrialisation, job creation and revival of the textile industries.

    Members of the union marched from Eagle Square to Yar’adua Centre, Abuja, chanting labour slogans and displaying various placards bearing their demands from the government.

    Some of the placards read: “Industry key to mass decent jobs,” “Copy China,” “re-industrialise Nigeria,”“Nigerians stop smuggling fake and counterfeiting of textiles,” “Buy quality, save jobs, buy Made-in-Nigeria,” “Africa produce what you can consume,” “consume what you produce,” amongst others.

  • Economy: Moving from collapse to recovery

    It is interesting that almost all stakeholders who have tried to discuss our current economic predicament believe that the Nigerian economy is in “recession”. But is this a correct characterization? If these stakeholders are in error, then, we can conclude that the nature of the problem is not generally understood, and if policy makers are in error in this regard, then policies designed to revive the economy will be ineffective, and may aggravate current problems.

    What economic condition is Nigeria now experiencing? Let us quickly dismiss what it is not. First, it is not depression, where national output, incomes, employment levels and rate of inflation are all negative. Second, it is not deflation, where price levels and interest rates decline as well as aggregate expenditure in the domestic economy, as is now happening in Japan. Third, it is NOT recession which is characterized by negative growth in national income for two consecutive quarters (six months) without incidence of inflation. Fourth, the closest term to describe the current Nigerian situation is stagflation, which is decline in national income combined with inflation. We can argue that while stagflation is the closest description of the present state of the economy, that state is actually worse than stagflation, in the sense that inflation is accompanied by absolute reduction in national income and employment level, as well as a chronic external deficit. If we accept the fact that Nigeria is experiencing something worse than stagflation, then the appropriate package of policies that can revive the economy is significantly different from that being proposed by government, external donor agencies and by the organized private sector to tackle recession.

    Recognizing the causes of the current Nigerian economic predicament is a major step to resolution. Some of these causes are policy mistakes of previous and present governments, wrong attitudes of Nigerians to production and consumption, and a curious tendency of accepting policy advice from stakeholders who place their individual interest over that of the country. We shall be specific.

    1. Failure to refine crude petroleum at home due to constant breakdown of the four refineries;
    2. Excessive importation of food and other agricultural inputs which Nigeria is well suited to produce, due to irrational dependence on shared oil revenue;
    3. Continued depreciation of the naira exchange rate which propels cost-push inflation arising from imports; especially petroleum products, industrial inputs and food;
    4. Sustained tight monetary policy implicit in high and rising interest rates which discourage investment by small and medium-scale enterprises;
    5. Recent trend of introduction of new taxes at Federal and State levels which is a leakage from the national income stream as it discourages production and consumption;
    6. Failure of the National Assembly to pass the Petroleum Industry Bill (PIB) which is expected to liberalize the downstream segment of the Petroleum and Gas sector with huge potential to increase output, incomes and employment;
    7. Failure of the political party in power, past and present, to restore a proper federal structure with considerable devolution of powers to federating states which was destroyed when the military overthrew the First Republic in 1966. All federal governments have resisted the restoration of the federal system that provided a solid foundation for stability, peace and mutual respect during the First Republic. Current political discontent and agitation in oil-producing states resulting in destruction of production and pipeline facilities reduces output of crude oil and gas, in the process destroying the environment, reducing earnings of foreign exchange as well as electricity supply. The solution to the constitutional problem is negotiation among the geopolitical regions, and definitely not the militaristic approach adopted by the Federal Government in 2016.
    8. Shortcomings in the implementation of The Treasury Single Account (TSA) which suddenly drained large sums from the commercial banks with adverse effects on liquidity, lending capacity, employment in banks and solvency, and increased exposure to bank distress.

    Current economic problems arise from WRONG exchange rate policies adopted since 1986 under the Structural Adjustment Programme (SAP). Before then, the country operated a fixed exchange rate regime which provided a stable environment for the country to attain middle-income status during the Gowon Regime. Proponents of SAP and flexible exchange rate system argued that the naira was “over-valued”. From the initial exchange rate of N1= $1 in 1986, the exchange rate has deteriorated to N310.00= $1.00 on the inter-bank market and N475= $1 in the parallel market as at October 5. The orthodox theoretical argument is that depreciation of the national currency raises domestic prices, improves the balance of payments position and increases gross national income. But empirical results of depreciation of the naira indicate that the policy reduces national income as well as worsens the balance-of-payments position. This confirms the position taken by experts that the Nigerian foreign exchange market is unstable. The implication of this is that to obtain the desired results of improved balance of payments position, increased national income and reduction in the rate of inflation, the country should find a way to appreciate (raise the value of) the naira. This would involve devising policies to tackle destabilizing speculation against the naira, increase exports and devise a strategy of taming the parallel foreign exchange market by integrating it with the Bureau De Change and subjecting it to Central Bank control. Appreciation of the naira then results in lower rate of inflation increased national income and improved balance of payments position.

    Nigerian monetary policy has been restrictive since the introduction of SAP. The Central Bank, in its inflation-targeting strategy of monetary policy, regularly mops up so-called excess liquidity by selling securities to banks, resulting in rising short-term interest rates. This discourages lending and makes the structure of lending interest rates prohibitive to investors. This works against increased national output and employment. The assumption of the Central Bank is that lending is for consumption, which would have been tenable if the inflation was demand-pull. In cost-push inflation, rising short-term interest rates, in addition to reducing output, may also compound inflation. In the current Nigerian situation, easy monetary policy is preferred.

    Fiscal policy should be significantly restructured. Government’s commitment to increasing non-oil revenue should continue. The percentage of expenditure on recurrent items should be reduced while capital expenditure is significantly increased to accommodate additional infrastructural facilities. In the short run, budget deficits should be employed to expand national income and employment opportunities. Sale of national assets should not be considered.

    In this era of globalization, application of new technologies, particularly ICT and the development of entrepreneurial capabilities make a country more competitive in world markets as well as increase the productive capacity to satisfy domestic demand. This policy, working closely with fiscal policy, increases national income, improves the balance-of-payments position and reduces inflation.

     

    • Paper delivered by Professor Osagie on behalf of recipients of honorary degree awarded at the 42thgraduation ceremony of the University of Benin, November 26.

  • Again, it’s the economy, stupid!

    Despite the gloomy outlook, it is frightening that government is yet to chart the way forward

    For the recession-hit Nigerian economy, there seems to be no respite anywhere in sight going by the latest statistics from the National Bureau of Statistics (NBS), the Gross Domestic Product (GDP) revealing that it contracted by 2.24 percent in the third quarter. In the second quarter, it shrank by 2.1 percent.

    Like then, the indices remain gloomy: crude production – the pivot on which the economy spins now turned an albatross – again fell for the fourth consecutive quarter from 1.69 million barrels in the three months through June to 1.63 million barrels per day. On the whole, the oil industry contracted by 22 percent over one year. Whereas the non-oil sector which includes manufacturing, banking and agriculture chalked up a 0.03 percent in expansion, factory output contracted by 4.4 percent – the third consecutive quarter of decline. Leading the club of the laggards is the construction sector which shrank 6.1 percent, the fifth straight quarterly contraction.

    While the situation is grim enough, the situation in the Main Street would appear worse than any statistics could ever attempt to capture. While some have suggested stagflation – an admixture of persistent high inflation, high unemployment and stagnant demand – as a more fitting description of the situation, truth is no single concept can come close to capturing the daily grind that living has become for the ordinary Nigerian or even the ugly spate of de-industrialisation that currently defines the nation’s experience.

    Meanwhile, if the nation expected a rebound in oil prices, that has been rather slow in coming as oil prices currently hover below the $50 a barrel mark. Worse is that the activities of the militants in the Niger Delta have proven to be more devastating than often admitted. Whether in terms of crippling power shortages from damaged gas infrastructure, the shrunk oil revenue that has left most states as indeed the Federal Government struggling to meet their financial obligations; or even the current volatility and the crippling scarcity of foreign exchange that has left most manufacturing industries endangered, there is no question about how daunting the challenge is.

    Unfortunately, the Buhari administration is either yet to see the problem for what it is – a serious emergency – or simply lacks the capacity to match its pace with the challenge, aside the now familiar indulgences in blame-game and fruitless dissection of the problems.

    We are forced to ask – yet again: where is the roadmap on which the Buhari administration expects to navigate the nation out of the current crisis? For all the perennial complaints of industries about being ill-served by the plethora of government policies, when will the government begin to tackle the problems seriously to alleviate some of the problems of the sector, at least in the short run? Now, thanks to the expected harvest in the agricultural sector this year; where are the policies in place to guarantee sustainability in the long run?

    Moreover, what is the government’s thinking about the current situation in which industries rely almost exclusively on imported raw materials? Is it not a shame that some of these raw materials –currently a huge source of forex depletion – could actually be developed locally were government to put appropriate policies in place? What programmes are in the works to ensure that the nation begins to reap for once the benefits of backward integration?

    It is not sufficient for the Federal Government to claim to accept that the way out of the current crisis is diversification of the economy. Nigerians want to see practical measures to achieve this.

    A little while ago, this newspaper was willing to grant the administration the benefit of the doubt on its request for emergency powers to fast track the implementation of its infrastructural renewal programmes, and for $29.96 billion to finance the development of critical infrastructure. In the two instances, what comes across is the difference between wishes of the administration and the imperative of hard work. It is time the administration moved from proving that it knows its onions to getting things done.

     

  • ‘Non-passage of PIB hurting economy’

    ‘Non-passage of PIB hurting economy’

    The delay in the passage of the hotly debated Petroleum Industry Bill (PIB) hurts the economy generally and stymies progress in the extractive sector in particular, experts have said.

    The experts, who spoke with The Nation in separate interviews, lamented that despite being touted as the best thing that would happen to Nigeria’s oil & gas industry and also boost the economy, the PIB remained stagnated at the National Assembly (NASS) since 2007.

    The PIB, which began in 2007, was expected to produce a dynamic policy framework for massive reforms in the oil & gas industry. The reforms were expected to form the nucleus of Nigeria’s aspiration to become one of the most industrialised nations in the world by the year 2020.

    For the country to realise this dream, it was envisaged that the major source of revenue to the Federation Account, the oil & gas sector, must be repositioned for greater efficiency, openness, and competition built on corporate governance as obtained in other resource-rich nations.

    Sadly, the PIB, which is the vehicle to achieving these goals, has yet to be passed into law, with experts noting that the industry and the economy will continue to lose with the its non-passage.

    “It is unfortunate that the PIB, which is touted as the best thing that would happen to Nigeria’s oil industry and also boost the economy has been stagnated at the national assembly,” the Chief Executive Officer (CEO), Holistic Security Background Checks Limited, Don Okereke, lamented.

    The security expert and consultant attributed the non passage of the PIB to high wire politics. “It appears some powerful cabals are opposed to it, he told The Nation, pointing out however, that the current Senate is reportedly making arrangements to expedite or fast track its passage.

    Also speaking, the Director, Health of Mother Earth Foundation (HOMEF), Mr. Nnimmo Bassey, said: “When a suitable PIB is passed into law, it will provide a good playing field for all stakeholders in the sector.”

    Bassey, a renowned international environmentalist, told The Nation that if Nigeria values its people and the environment above money, it ought to show this in the formulation and enforcement of environmental laws.

    He said this bridge can be crossed by having uniform provisions for the environment and host communities in the extractive sector.

    According to him, this will eliminate parochial considerations and arguments that stymie progress in the sector thus allowing an unacceptable regime to persist.

    Although the PIB recently passed second reading at the NASS, Bassey noted that the reasons why the initial PIB could not be passed after eight years of negotiations and debates are still at play, adding that the unfortunate fact was that some of the contentious aspects of the Bill ought not to be contentious at all.

    “The current approach has been to break the PIB into four bills and have them passed into law in bits. The troubling aspect of that approach is that the concerns of communities and the environment may be pushed to the back burners, while financial management issues take the front seat,” Bassey argued.

    While noting that the PIB is a good first step in reforming the industry, he said the delay in passing the Bill into law was unacceptable. He attributed the delay to several factors among which are toxic politics and pressure from the International Oil Companies (IOCs) who he said have openly said they would not accept laws that curb their excessive profits.

    Bassey also identified the pressure points as wrong perception by some legislators that provision of funds for communities means more money to the oil-bearing states. “Actually the PIB makes the offer of money to communities on one hand and takes it away on the other. It criminalises communities when it says that if oil facilities are tampered with then the communities, LGS and States would pay,” he said.

    The expert argued that communities are not the policemen of oil facilities. “The PIB speaks the old language of subsisting laws that free IOCs of responsibility where facilities are interfered with by third parties. That has made the claim of sabotage the favourite refrain of the oil companies even before incidents are investigated. The PIB fell into the same anti-people trap,” he said.

  • ICT can pull economy out of recession, says NCC

    The Executive Vice Chairman, Nigeria Communications Commission (NCC), Prof. Umar Dambatta has advised investors and other key players in the nation’s economy to leverage on the information communications technology (ICT) sector as well as telecoms innovations to pull the economy out of recession.

    Represented by the Director, Public Affairs at the NCC, Tony Ojobo at the  Nigeria Innovation Conference (#nis2016), Dambatta cited the pharmaceutical industry where the authenticity of drugs are now verified through the use of mobile phones, as one of the innovations powered by telecoms industry.

    “We are all aware of the innovation where farmers were equipped with mobile phones and they are able to be reached for distribution of fertilisers and other critical infrastructure that have given them better yields.

    “In the movie industry, as represented by Nollywood, the Commission has taken steps to collaborate with the actors and producers to evolve better ways to distribute their contents to the worldwide audience and also to improve their production capabilities through the application of relevant technologies available in other parts of the world,” Dambatta said, adding that the overall effect of this is economic growth.

    The EVC said innovation is one of the eight-point agenda of the current leadership of the Commission. “The fourth item of that agenda, in particular, seeks to promote ICT innovation and investment opportunities. By this, the Commission makes conscious efforts to promote ICT innovations in ways that improve the nation’s ability to compete in the global economy, increase investments in youths, and promote small medium enterprises (SMEs) for new businesses deliveries and breakthroughs,” he said.

    Also speaking on: How Nigeria Higher Education System Can Drive Innovation: Opportunities for Collaboration and Partnership for Economic Development, Senior Education Specialist at the World Bank, Dr. Tunde Adekola, said: “What it means to be ‘innovative’ in 2015 may be different to what it was in 1885 or 1985 (and it will perhaps be different still in 2085). That said, there is little argument that, whatever the year, and wherever you are, basic numeracy and literacy skills are fundamental to one’s education and ability to navigate successfully through life now require learning and innovation skills, statistical literacy,  digital literacy skills, life and career skills”.

    He said both innovation and higher education are important for national development and must be value added. He said:  “In the midst of competition, time is also of essence. It is not only about what we know but when do we know it? Innovation makes all the difference between a developed and marginalised economy.

    “Developing countries will have little success boosting economic.

  • Southwest governors meet today on economy

    Southwest governors meet today on economy

    Southwest governors will meet today in Ibadan, the Oyo State capital, on the economic development of the region, it was learnt last night.

    Expected are Governors Akinwunmi Ambode (Lagos), Abiola Ajimobi (Oyo), Rauf Aregbesola (Osun), Olusegun Mimiko (Ondo), Ayodele Fayose (Ekiti) and Ibikunle Amosun (Ogun).

    They are to discuss how to boost the infrastructure in the region and how the states can collaborate to improve the economy of the region, a source privy to the agenda of the meeting which is bipartisan, said.

    “The ultimate goal is the economic integration of the region from Ondo State in the northern part to Lagos State in the South.

    “States will have to lift each other up, working from their areas of strength. This has nothing to do with politics but the overall economic development of the Yoruba,” the source said.

    For some time now, moves have been ongoing, led by some leaders in the region, for the states to collaborate to develop the economy of the region thorough a collaborative effort and integration.

    Special Adviser Communication and Strategy to host Governor Ajmobi said the meeting was called at the instance of the Oyo State helmsman.

    In a statement, Mr. Yomi Layinka explained that the meeting would discuss several issues of common concern in view of the challenging economic circumstances confronting the nation and its constituent parts.

    He said, “These issues include security of lives and properties of all citizens and our peoples; the economic development of the states by leveraging on common resources and the competitive advantages of the region.

    “Other issues to be discussed will include the identification and development of critical infrastructure, especially road networks and the need for a regional rail network for transportation of goods and services within the region.”

    The statement added that the conversation would be facilitated by Director-General of the Nigeria Institute of Social and Economic Research, Prof. Dosu Adeyeye; Director-General of the Development Agenda for Western Nigeria (DAWN Commission), Mr Dipo Famakinwa; and the Group Managing Director of O’odua Investments, Mr. Adewale Raji.