The Nation Newspaper

Tag: Economy

  • ‘Buhari fixing battered economy’

    A governorship aspirant on the platform of the All Progressives Congress (APC) in Ondo State and former Nigerian Bar Association (NBA) President, Rotimi Akeredolu,  yesterday said President Muhammadu Buhari is fixing the country’s badly battered economy.

    In a statement to commemorate Democracy Day, Akeredolu urged Nigerians to be patient as great days lie ahead.

    The statement reads: “This administration inherited a near-empty treasury from the immediate past administration. The profligacy of the ousted ruling party is legendary. Revelations of brazen acts of malfeasance is mind-boggling. Many honest citizens agree that the victory of President Muhammadu Buhari at the polls saved the country from the brink.”

  • Senate invites Adeosun, Emefiele over economy

    Senate invites Adeosun, Emefiele over economy

    • Senators seek measures to fix economy

    The Senate yesterday resolved to invite the Minister of Finance, Mrs. Kemi Adeosun and Central Bank of Nigeria (CBN) Governor, Mr. Godwin Emefiele, to brief it on the state of the economy.

    The invitation followed the adoption of a motion on “urgent need to address present economic state of the nation”.

    Senator Bassey Albert Akpan (Akwa Ibom North East), who sponsored the motion, said the motion was informed by last week’s National Bureau of Statistics (NBS) release on the nation’s economic scorecard for the first quarter of this year for Gross Domestic Product (GDP), inflation and unemployment.

    He observed that the report showed that the economy plunged into recession with a decline of 0.3 per cent year-on-year in real term, which is a drastic drop from 2.11 per cent in quarter four of last year’s GDP.

    He also observed that from the report, unemployment rate rose to 21.1 per cent from 10.4 per cent in the last quarter of last year.

    According to him, unemployment also increased to 19.1 per cent from 18.7 per cent in the same period while inflation rate rose from 9.6 per cent in January this year to 13.8 per cent in April this year with attendant increase in prices of basic food commodities and services in the country.

    Akpan said he was worried that the declining GDP and unemployment, besides the high inflation rate, clearly showed that economic policies “are not achieving desired impact and requires an urgent review to avoid further plunge in our economy”.

    The lawmaker is worried that the current economic contraction is the first major drastic slump since June, 2004, which, according to the CBN, is a 12-year-low when the World Bank’s position is a 21-year-low.

    He recalled that the CBN, had in March deployed a contracting monetary policy increasing bench mark interest rate from 11per cent and cash reserve ratio from 20per cent to 22.5 per cent.

    “The question is why contracting monetary policy instead of expansionary monetary policy of boosting economic activities at such a critical time as this,” he said.

    Akpan said he was deeply concerned that the continued complacency of the current state of the economy, if allowed unchecked, will set the tone for a full blown economic recession by the end of June as already confirmed by the CBN in its last Monetary Policy Committee meeting.

  • It should be economy, economy and … economy

    It should be economy, economy and … economy

    While much credit is given to President Muhammadu Buhari for the fight against corruption and insecurity, not much encomium has come its way for the management of the economy, writes Group Business Editor SIMEON EBULU

    President Muhammadu Buhari’s handling of the economy in the last one year has not yielded the expected result. But there is hope.

    Since the beginning of the second quarter, more activities that will have impact on the economy are being undertaken.

    Vice President Yemi Osinbajo, speaking at the ‘First National Forum on the Economy’ organised by The Nation in April, amplified the fulcrum of government’s economic direction.

    Osinbajo said. “Our approach was to anchor the vision of the government on three critical constraints which if properly addressed, would have positive ramifications for national development. We accordingly resolved to improve security, tackle corruption and grow the economy in an inter-related manner.”

    It is on the economic flank that many have picked holes with the administration’s policies. Some even said the government was unprepared to tackle the economic challenges before it.

    However, if anyone was still in doubt as to the direction the government was headed, the signing of the 2016 National Budget and the fuel price adjustment have begun to clearly erase those doubts and to situate the direction the government is headed, economically.

    Interestingly, government officials said Buhari has as much interest in advancing the nation’s economy as he is in fighting corruption, et al.

    To kick start the agenda, government through the Minister of Finance, Mrs. Kemi Adeosun, has unveiled plans to pump N350 billion quarterly into the economy  “ to stimulate growth”.

    Mrs. Adeosun, who spoke on Sunrise, a Channels TV programme, said the fund would be released as soon as the budget was signed.

    She said: “We are going to pump N350 billion into the economy in this quarter and we are going to do so every quarter until we stimulate growth. And we would see growth if we spend money on those things that would create jobs.”

    The other flank of the government’s economic reengineering – diversification– has been given added impetus with the guided deregulation of the oil and gas segment of the economy.

    The announcement of the  new N145 fuel pump price is seen as a strategic economic decision designed to ginger business activities in the larger economic space,  create jobs,   free government resources hitherto spent on subsidy payments (amounting to about N1trillion) in 2015 alone and building the needed infrastructure whose absence or inadequacy has resulted in stunted economic growth in the past . This couldn’t have come at a better time, given the fact of dwindling government revenue in the face of falling oil prices in the international spot market.

    As Mrs. Adeosun aptly put it, the drop in crude oil prices presented a good opportunity to reposition the economy, pointing out that the opportunity for diversification of the economy created by the crisis should not be wasted.

    The injection of the N350billion, in whole or in part following the signing of the 2016 Budget by Buhari, is expected to help re-invigorate the productive capacity of the nation’s economy and grow its Gross Domestic Product (GDP). Also,  government’s decision to open up the downstream segment of the oil and gas sector, is viewed by experts and stakeholders  as the first step towards unbundling the economy which is in line with the position of the Organised Private Sector’s (OPS’), that it is the way to go. The call for the diversification of the economy from oil is more urgent now that the drop in oil prices has made continuous reliance on oil as the major source of revenue for government, as a risky adventure.

    The former Executive Director, Keystone Bank, Richard Obire, agrees with  the argument that following the tumbling of crude prices at the international market,  government should be shifting its priorities to agriculture, solid minerals’ exploitation as avenues for creating employment opportunities for the millions of jobless youths. He said beyond diversification, government should also crack down on corruption as a way of ending financial leakages.

    Apparently avoiding the pitfalls of the past, the government has earmarked 30 per cent of this year’s budget for capital expenditure with a plan to financing it through incomes from non-oil revenues.

    Obire said the options open to government to drive its revenues streams are through an effective tax regime and earnings from excise duties from the Nigeria Customs Service. He said the government has to be prudent in its spending by ensuring that every naira spent, comes with the maximum value.

    In agreement with Obire, the former President of the Chartered Institute of Bankers of Nigeria (CIBN), Mazi Okechukwu Unegbu, said government should spend efficiently, ensuring that every naira spent gets the maximum impact, stressing that all financial loopholes must be plugged.

    Unegbu cautioned that the new economic drive should be devoid of imposition of arbitrary fines on corporate organisations by some regulatory agencies, saying such fines would scare both local and foreign investors.

    He said:  “The reign of impunity has to go. The market is being hounded by fines. The regulators are not doing well and they need to be called to order. Government has to help stabilise the financial market.”

    While calling on government to reduce its domestic debt, he nevertheless made allowance for more government borrowing in so far as it will lead to value addition. “Government can borrow more, but such borrowing must create value for the economy. It should reduce the domestic debt and encourage growth of more domestic businesses,” adding that government should look the way of taxation and Customs duty to get more money.

    A lecturer at the Pan Atlantic University, Dr. Austin Nweze, said government should direct its path towards building infrastructure to be able to industrialise the current local business so as to create employment.

    He said: “The only way to create employment is to be able to industrialise, making sure that the infrastructure need for industrialisation is available to take advantage of opportunities in the global scene, to see how Nigeria can compete in the global scene and make use of the opportunity when it present itself to us as a nation,” adding, “we have to put in place the ease of doing business so that whatever may be the obstacle, all the rigidity that prevents people from doing business must be removed.

    And then they should sort out the foreign exchange thing, It’s been staying around for long. What I believe is, we should find a way of increasing production within Nigeria.

    “The policy is wrong. In the first place, you are saying you don’t want to devalue and then you are using money to defend what is not defendable. What they should do is leave Naira alone and let it find its level. It’s already unofficially devalued, at N320; it can’t get higher than that. They should look at that. Don’t just ban any importation of any item, have a long-term programme for restriction on imported items, give people time, he stated, pointing out that banning is encouraging corruption.

    On non-oil export, he said what should be done is to have a strategic direction of what you want to do. “It all boils down to the same thing. The strategy they should adopt is natural resource factor-endowment based economic development. People should be encouraged to build factories there. We should find a technology to capture our raw materials’ base. When mangos come, you see mangoes become cheap everywhere. They should find ways deliberately to capture these raw materials such that we can ship it for industries, we should refocus on our natural endowment using those raw materials for industry to increase the value chain. By the time you do that, industries will have access to raw materials.”

    He said in addition to fighting corruption and recovering stolen funds, government should look the way of industrialisation.

    “The first year was used to fight corruption and repatriation of stolen money. This second year next month, June, should be used to invest in infrastructure, to recapitalise industry. The third one is education, focus should be in science and technology that will support industry. Until Nigeria becomes Original Equipment Manufacture, it will be difficult to industrialise, Nweze, said..

    He called on government to let industries be, saying manufacturing thrives when there is no interference. In the 80s, manufacturing was contributing about 34 per cent to GDP, but now it is about four per cent. The problem of the Nigerian economy is government. They should allow the industries to function, he said.

    The fuel price fixing adopted by the government is adjudged correct by the Group CEO of Prima Garnet Africa, Lolu Akinwunmi.

    He said: “In a proper deregulation, it isn’t expected that government would fix prices; it would simply regulate quality of deliveries. Two, it would have come out with specific guidelines on implementation. Hopefully it would also have anticipated a string of negative socio economic effects by announcing certain palliatives to support, especially the poor.

    “In this case none of these happened, which was what prompted us two days ago to note that it was very unusual to casually announce a “deregulation” through Kachikwu and without addressing these political and socio economic issues.

    “We are simply tired of the N16 billion monthly spend by government to pamper the lifestyle of a few. So what government has done is to shift the great importation burden to more importers. Now anyone with access to forex can bring in PMS. The margin is attractive enough especially if there is no reversal.”

    His prediction is that in the next few months the sector will experience a spike, and that forex demand will go up and the dollar/naira exchange rate will literally hit the ceiling. However, he believes that in the long-run, the interplay of market forces will steady the exchange rate mechanism in line with Nweze’s position of an unregulated exchange regime at a N320/$ parity. Hopefully as importation and sales stabilise, the forex rate will readjust as importers begin to make their margins and generate own forex for future importation, Akinwunmi stated.

  • ‘Focus on economy not strike’

    The Executive Director Leadway Assurance, Ms. Adetola Adegbayi, has called on the Nigeria Labour Congress (NLC) to focus on how to grow the economy rather than embarking on strike over increased petrol price.

    Ms. Adegbayi, who made the call while speaking on “The Role of Loss Adjusters within a Challenging Economic and Insurance Environment” at the Investiture ceremony of the Institute of Loss Adjusters (ILAN) in Lagos, said the NLC should be embarking on strike to force the oil companies to have refineries, which will in turn serve the people, adding that the Labour should be more concerned about how the Nigerian economy can be restored and not be import dependent.

    She said: “Labour had called on Nigerians to embark on strike. I begin to wonder what we are striking for. Is it the fact that there is increase in the price of petrol or what is really important? Is it not more important for us to focus on what happens to the value of naira in respect to dollar and other foreign currency we use in importing this petrol?  Shouldn’t we really be striking to force the oil companies to have refineries in-country?

    “The crude comes from the Niger Delta and within this region; there is an exploration into the interland. So if we are to calculate the kilometres/miles from one end of the Delta to other areas including Lagos State, we will have enough points to position refineries to serve the people.

    “Dollar appreciated to N350 and pounds to N500 because our economy is too dependent on importation. Our economy has been bastardised that it’s not self-sustaining. So shouldn’t refineries be the priorities of Labour because more people will be employed. When this happens, they will acquire assets, acquire liabilities and the insurance industry will have more things to protect.

    “Why is it that labour is getting us to be striking against what is inevitable when they can be striking to compel what is possible that has not been done, it is when we compel what is possible that has not been done that our industry begins to grow,” she added.

  • NGOZI AKABUEZE – Economy is changing women

    NGOZI AKABUEZE – Economy is changing women

    Ngozi Akabueze is the head of the Foundation for Sapphire, an organisation that teaches women to be virtuous, hardworking and dedicated. In this interview with YETUNDE OLADEINDE, she talks about the challenges facing women today, how to find solutions to them, passion for mediation and life being married to Ben Akabueze, Special Adviser to the President on National Planning and Provincial Pastor, RCCG Kingscourt, Province 39, Lagos.

    What are some of the things that helped you in your marriage?

    From day one, we had a standard and the standard was the Word of God. So, whenever there is an issue, we go back to God. That is what has been helping us.

    Has it been very smooth?

    No! I would be lying if I say it’s been very smooth. As a matter of fact, it is not about being problem-free, it is about how the problem is handled. The scripture says ‘that a man born of a woman is of few days, full of trouble.’ So, it means that the world is characterised by trouble. So, if that is the case, then it is how you handle the trouble that matters. If you are married and there is no trouble, no issues, then I would believe that it is artificial and they are not telling themselves the truth.

    What are the things that occupy your time?

    I always keep myself busy. I have a business and one thing that I love doing so much is going to school.

    What areas are you interested in?

    Any area that interests me. Now, I am concentrating on my Law programme. I just finished a programme on mediation advocacy and I got a letter that they have approved of my being a mediator come July. I still cook for my husband.

    Can we say that it was food that you used to win his heart?

    No! I think it was fate that brought us together. When I met him, I wasn’t thinking of getting married. God just helped us and had mercy on us and He is still having mercy on us. Somehow, when a woman understands her husband well, my people would say you have gone to make medicine, but the truth is that, it is not so. It is because you have taken your time to understand what it takes and God helping because there are some people that you understand; you put in your best but things just do not work as planned.

    What were the things that you liked about your husband?

    For me, I like intelligent people. I don’t like people that are not intelligent. So, that was the first thing that attracted me to my husband. He is easy going, but not very easy going because when you are dealing with intelligent people, you have to be articulate yourself. It is just the mercy of God.

    Which is your favourite book or quote?

    I read anything and everything. I read whatever captures my interest. It depends. My advice to young people is that they should read and have a strong reading habit. The truth is that ‘my people perish for lack of knowledge.’ Without knowledge, so many things would elude you.

    What is the Sapphire Foundation about?

    We are the Women’s Ministry of RCCG, Kingscourt. God has given us a mission for the International Women’s Prayer Conference. This is the maiden edition and it is taking place this weekend. The focus of the conference is to deal with the issues around us; basically cry out to God to help us. We are talking about issues around the family, things that befall us as a nation. There are so many unpleasant things happening around us, things like the children’s need, provision for food, business and everything you can think about.

    The premise is of the fact that even the scripture recognises that there is a problem. It says: “A man born of a woman is of few days and is full of trouble.” You have not done anything for there to be trouble. That means that the world is about battle.

    We are called to the families in Kingscourt, our communities and the nation. For you to take care of somebody, you must have taken care of yourself. We do things to be able to take care of and affect our environment. We would be have training sessions on home management, cooking, skill acquisition like soap-making, how to hear from God, how to pray, and we are very expectant. We also talk about health, real life issues and things that affect our husbands. Sometimes, we organise programmes on relationships, the do’s and don’ts and share experiences. So that if you find yourself in a particular situation you would know what to do. When you are experienced, it is not everything that people would teach you.

    Why do you think that it is the women that should pray?

    We are co-creators, having children is not just a matter for women. There is something about women; we care to the details and everything gets to us. A man can go on as if nothing is happening but it is not possible for a woman. So, somebody has to take it on and at the end of the day, whatever happens in life affects us more as women. If it happens to a man, we are affected, if it happens to our children, we are affected.

    Most times, we are affected by other people’s issues than what concerns us, our personal issues. I think that it is high time to do something, not just sit in our corners complaining. Some of our children are not in school right now because of the economy. We just can’t sit down and be crying; we must talk to the person that has the solution. We are calling the conference because we have hope. We know that in spite of everything, He has the solution. So for the two days, we will be crying and creating the right atmosphere for God to intervene. Apart from the prayers, there will be praises, worship and prophecies.

    The economy is in a state and it is affecting everyone. What should women do at this time?

    We are doing what we are supposed to do. Apart from prayers, I know that a lot of women are doing things; there is a change in perspective. There is a change in lifestyle and there are so many changes going on around us, just to adjust to the economy. The issue is yes, it is tough and it is going to get tougher. Our daddy in the lord had told us earlier in the year that things will be tough but towards the end of the year, things will get better. The word of God says, ‘believe in the Lord your God and you would be established, believe in His prophets and you would prosper.’ So, we don’t just hear these prophecies, just sit back and wait for it to happen. Apart from taking the battle to the gate of the enemy, we are also trying to call upon the lord to have mercy, because at the end of the day, it is not about what the devil has done, it is about what God is doing and what he is about to do. We are in a critical stage now, everybody needs help.

    Apart from the economy, there is also the problem of insecurity in the nation. The Chibok girls have not been found; what message do you have for their mothers?

    Oh my God! Whenever I remember that, it is heart-breaking for every mother and we have not ceased praying for them because God is on the throne. He knows the times and the seasons. Those girls, by the special grace of God, we are still expecting them back; we have not given up. Our God is able; He knows where they are now. At this point in time, we pray for God to give the family exceptional grace. It is mindboggling for you to know that your child is somewhere and you don’t know what is happening to your child. You don’t know who is with your child, you don’t know what they are doing with the child and more importantly, when you think about whether your child would be violated or defiled. So, mothers need exceptional grace and the only one that can give the kind of grace that they need is God. That is basically the message – we are with them. It is not just about them. It is something that has happened to all of us, even though they are the ones that have brought these children into the world, it is a slap on the faces of us, as women. We would not just let our labours go in vain like that.

  • ‘Economy is hindering ability to own houses’

    ‘Economy is hindering ability to own houses’

    Is affordable housing possible under the prevailing economic reality? For those in government, the answer is no! According to Jide Ogunsholu, Ogun State Property Investment Corporation (OPIC) Managing Director and Special Adviser to the Governor on Property and Investments, it is difficult to build a house for N2 million in the face of current realities. He tells MUYIWA LUCAS that with developments in his state, there is hope for affordable housing.

    For an average Nigerian, getting an affordable house is paramount.What is OPIC’s effort in this direction?

    What we have done is to put in place flexible schemes that make it easier for people to acquire our homes. That is why we have  the ‘OPIC Advantage Plan.’ This is not a mortgage plan, but a financing plan that allows you to spread the course of acquisition over a three to four year period. A lot of people struggle to build their own house in our country; most of such people buy land in the first year; save money and do the foundation in the second year; and in the third year, they complete the building and call everybody to a party. Nobody builds over less than three years in this country. This is a typical Nigerian style of building especially where the owner is not rich. So, for such category of people, what we have done is that instead of the person bearing all the burden, we (OPIC) will build in one year, and allow the person to pay over an extended period of time. That is what OPIC is all about- targeting an extended period of time for housing payment to make it easy for the people. We believe that easily within the Lagos – Ogun market axis, we have over 200,000 people that fall into this category. For people in this category, affordability is about how to pay, not what to pay. That is a smaller market.

    For the larger market, it is about cost and how to pay, which is where we are bringing in people like Lafarge Holcim and other banks. We enter into an agreement with firms like Lafarge and use them to build houses for us. We can pay in installments over an agreed period of time; we can spread the payment a bit and we can get some form of credit from their system. This makes us to get construction done at a reduced rate and by getting it at a reduced rate, we are able to get those buildings to the aspiring owner at reduced price. We are aware this effort is still not enough but we now think the last step is aggregating some mortgage banks, who we are working with now, to create a product that will make it possible for such people to get facilities. Once they key into the scheme and they show over a period of time that they are reliable and can be depended on to pay as and  when due in a 20-year mortgage loan, then we as OPIC come in to work with everybody to make it viable.

    Our goal is to try and get cost of houses as low as possible. In New Makun City, located in Shagamu interchange, if it is possible, we want to get N2 million as construction cost for our houses. But let’s be candid, people want to build houses of N2 million, but this is not possible. Government doesn’t have unlimited resources now. Ogun State is fortunate in having a number of agencies working together on different housing schemes; so that is why we have been able to subsidise.

    How can housing cost be reduced?

    Introducing a multi-level unit apartment into the system would reduce cost. But from survey we conducted, we were shocked that the market doesn’t want that because our people still have that cultural thing of everybody wanting his own separate space.  We tried to educate people that the space they are talking about will make the house more expensive. If you are talking affordable housing then you are talking commercial transactions where you make it viable, so that is a challenge. I know that Lafarge has done a lot of work trying to simplify cost of construction, by bringing in form works and aggregates to reduce construction cost, but if you aggregate all of that together, there is no way as of today where you can get a house for less than N2.5 million, excluding profit and all other elements.

    OPIC is the business arm of government. Does this presuppose that social housing is closed to your Corporation?

    Well, of the four agencies that work in Ogun State, Housing Corporation does social housing, and now they do government subsidised housing. We, as OPIC, deliver dividends to government; while the other three agencies get subsidies from government. These are two different things. So if the government decides that for this year she wants to spend N200 million subsidising housing, the first set of people that can access that kind of money is Housing Corporation and Ministry of Housing, which takes care of public building. Housing Corporation takes care of subsidised social housing. For instance, in Abeokuta, we have 160 housing units at Laderin workers’ estate, which is a new estate just built by the government comprising of 2-3 bedroom semi-detached bungalows. The cheapest unit there is sold at about N3.5 million to N4 million. However, on each unit sold at that price, government subsidy is at least N2 million. So if you remove the government subsidy, it is actually N5.5 or N6 million.

    In your quest to provide housing for the people, are you considering rent-to-own scheme as an option?

    Yes, we will probably go into the rent-to-own space probably when we are done with the first face of EMTR gardens. One of the things we have noticed is that the element of the rent-to-own is also characteristics in the OPIC advantaged scheme. This literally means you pay 30 per cent of the total cost of the house, take your keys and you move in and every month you are required to pay a fixed minimum sum and then you have bullet payment points along the line over a 36 month period, with no interest elements.  What we have done with OPIC advantage is to take the characteristics of rent-to-own scheme and characteristics of a typical housing loan and bundle them together to make it affordable. Our sister agencies like Housing Corporation, have variance of their own models that work but not as elaborate as this one because we are the ones that interface mostly with the commercial end of the market, but they also have schemes modelled to make it affordable and flexible for people.

    So, how many units do you propose to have and how do you intend to build them?

    Well, the first face of New Makun City is 400 hectares; 50 per cent is meant to be commercial and the other 50 per cent residential. Within the residential phase what we have also done is to partner with some developers, who come in to pay for the plots to do commercial housing, we have about three of them. We have also agreed with every partner in the scheme on their house pricing and the kind of houses they are to build. Reason is to encourage cross cooperation and to avoid cannibalising each other’s market. Between the interventions, we intend to have a minimum of 2,000 units in all within this first phase. We are responsible for building a minimum of 500 units on our own which is going to be mostly in the lower entry level. What we really want in New Makun City is to get to a point where entry level homes does not exceed N8 million instead of the N15 million we are selling now. We are looking at over the next year or two for 50 per cent reduction in the prices.

    How has the crashing naira impacted on your projects?

    Well there is a direct impact because the prices of building materials tend to fluctuate; but the flip side is somewhat good, because in the housing market if we look inward we can source many things locally. So one of the good things of working with Lafarge is that everything, except for the frame work, is sourced locally. We really don’t have any imports other than the pipes, because the top grade pipes are still imported. The finishing stage is where we have problem as we still have to import titles and sanitary fittings, lightings, etc. But then, the bigger problem is not even the supply side but the demand side, as the economy is contracting peoples’ ability to afford homes. Because we have had economic downturns in the past, people start right sizing their pocket; they start scaling and prioritising what they hope to do. For us, part of what is likely to happen to our model is that we will have more people key into our ‘OPIC Advantage’ scheme.

    Ogun State housing projects seem to be mainly concentrated along the boundry of Lagos. This probably presupposes that you are trying to eat into the Lagos market. What are your housing projects for the interiors?

    By factor of providence, Ogun State surrounds Lagos, there is no way you can enter or exit Lagos State, even by water, without passing through Ogun State. Only a foolish man wants to go on walking when he is given an option to fly. A reasonable man will say let me take the one that will be less stressful, so for us here, the least stressful impact is to take care of the significant over flow of Lagos. So we started working on ourselves and that is why we find that most of our border towns now compete favourably with their neighbouring towns in Lagos. I live in Lekki, but I tell people that it is easier for me to live in Abeokuta than to live in Lekki, the only thing I go to do in Lekki is shopping, but very soon we will have our own mall here so I will not have to go to Lekki for shopping. To get from my house in Lekki to toll gate or phase 1 takes about two hours, whereas to get from my house in Ibara, Abeokuta to Ikeja, Lagos, takes an hour and 50 minutes. Is this not better than facing a constant two hour nightmare to get from Chevron roundabout to Lekki Phase 1. People were going through it because that is where the infrastructure was, that is where services are, but now we are providing the same thing and better grade of services here (Abeokuta). So why would you have to go through that stress when you can live here more peacefully? So its like starting from a point of least resistance by dealing with that sector first, generate revenue from there and then go to the inner cities and start turning them into upscale communities too. Incidentally, OPIC is in Agbara, Isheri, and Abeokuta. The Ministry of Housing is doing interventions in Ijebu-Ode; Housing Corporation is doing interventions in Ota. So when you look at the government interventions in housing holistically, you will see that we have covered the entire spread of the state.

    With the crash in crude oil price, the real estate sector is believed to be the next phase to drive the nation’s economy. Do you agree with this and why?

    When you are checking the health of an economy, you check the consumer index and also the housing sector index. It is only in Nigeria that we check crude oil price. This is an aberration because no country survives by depending on a single commodity. I see the downturn as an opportunity, because it makes everybody that is focusing on the top of the pyramid are now forced to come down. I believe that we are going through a tightening period but it is an opportunity and a window for growth of the sector. If you begin to create policies that supports the sectors that are productive in the society, then things will begin to get better. It will interest you to note that 21 per cent of America’s GDP is from the construction industry and the major index is how much they sell houses in a month. It is a chain economy- the importation guys working; the transportation guys working; the labour, and everybody is working and generating money and they are spending. So it is a wing that could turn this economy.

  • Govt plans N350b quarterly injection into economy

    Govt plans N350b quarterly injection into economy

    Finance Minister Mrs. Kemi Adeosun yesterday spoke of the Federal Government’s plans to inject N350 billion into the economy quarterly to stimulate growth.

    Speaking on Sunrise, a Channels TV programme, she said the fund will be released as soon as the budget is signed.

    Said Mrs Adeosun: “As soon as the budget is signed, we are going to pump N350 billion into the economy in this quarter and we are going to do so every quarter until we stimulate growth. And we would see growth if we spend money on those things that would create jobs.”

    To Mrs Adeosun, “there are no quick solutions to fixing the economy.

    “If you have cancer, you cannot take panadol; you have to take proper medication. I don’t want to come here and give people false hope. I don’t want to use the word magic because ministers get into trouble when they use the word “magic”. It has to be done painstakingly,” she said.

    The minister said the drop in crude oil prices presented a good opportunity to reposition the economy, adding that the opportunity for diversification of the economy created by the crisis should not be wasted.

    “Everybody is now extremely sober. Every Nigerian is sober. All the governors have realised that oil price can plummet from $110 per barrel to $28 per barrel over such a short period of time and we could be so exposed that we cannot even pay salaries.

    “So, there is a sobriety that has come in and I don’t think we should waste it. We are working very hard with the states and we said to them, first of all we are not bailing them out; we have said we would have a fiscal structuring plan. Whatever we are doing is conditional; they must go and drive efficiency.”

    On the  Sovereign Wealth Fund (SWF), Mrs Adeosun said the Federal Government wanted to “reposition it and have it focused in line with the government’s objective, which is investments in infrastructure”.

    The government  realised that even with 30 per cent of the budget, the country’s infrastructure gap is so wide that government alone cannot bridge it, she said.

    “So, what we are hoping is that the Sovereign Wealth Fund now becomes a channel to attract further private money, particularly from investment funds from abroad. So, we really want to focus on infrastructure – toll roads, bridges, power plants, things that would help the economy grow.”

    She went on: “Let me explain the structure of states and Federal Government. Fifty-two per cent of the money actually comes to the Federal Government. So, even if the Federal Government say they want to spend theirs, the Federal Government too didn’t save its portion. Federal government was not saving. In fact, Federal Government was borrowing, even to pay salaries. And that is where the disconnect comes in.

    “So, I think it is largely unfair for the Federal Government to say ‘states were the ones that made me to spend’. I can spend mine, but I can’t force you to spend yours. The Federal Government didn’t save its share. So, collectively, I don’t think we should be trading blames. I think what we should be doing now is to look at the lessons we have learnt. The federal, states and local governments must have savings. Even if we don’t have savings, we can have investments. Look at Saudi Arabia; it has about $700 billion of reserves unspent, and we have about $28 billion. Oil goes, oil comes, but they still have something to show for it.”

    She said the government was focused on revamping domestic production as part of efforts to diversify the economy.

    “If we just feed ourselves rather than importing food, we would create jobs and wealth. We have a huge population, a huge land mass and what is missing, perhaps, is, unfortunately, infrastructure”.

    The minister also disagreed with a recent comment by a former minister, Oby Ezekwesili, that President Muhammadu Buhari has introduced “archaic and opaque” economic policies which are hurting the poor.

    Adeosun said: “I don’t agree that we have a command and control economy. What we are trying to have is a planned economy. There must be some planning. When we were growing, they used to say Nigeria has the highest number of private jets and we would all clap for that.

    “But we also have the most terrible unemployment rate. So, what we are trying to do is to plan for the future and have an economy that meets the needs of Nigerians. We are a huge economy, so we shouldn’t have an economy where growth is not inclusive and allows few people to prosper at the expense of others. So, I don’t think we have a command and control economy.”

  • How I will boost Edo economy, by Edebiri

    How I will boost Edo economy, by Edebiri

    A Peoples Democratic Party (PDP) governorship aspirant in Edo State Chief Solomon Edebiri has promised to develop the agricultural potentials of the state to boost its internally generated revenue without over-taxing the people.

    Edebiri said he would make Edo the food basket of Nigeria, if elected as governor on September 10.

    Speaking at a press briefing in Benin City, the state capital, he noted that Edo could generate N12 billion annually from rice production.

    Edebiri, however, said that building a viable economy would require a workforce that is well motivated.

    He warned of dire consequences of not voting for a labour-conscious governor.

    Edebiri said: “What is uppermost in my mind is that we must develop our agro potentials to tackle poverty and boost the economy in the face of the dwindling oil price.

    “If we produce rice in this state and tax N1000 per bag, we will generate N12 billion in a year from rice production. This state will become a centre for food production. We will negotiate and get crude oil from the Federal Government. We will build modular refinery and produce petrol at N45 per litre.”

    The aspirant noted said the sufferings of workers would be prolonged, if a labour-conscious aspirant does not emerge.

    His words: “Enough is enough of electing people who get into office and treat people like slaves. If you make an error of not electing a labour-conscious candidate, we are in for a mess. There will no welfare and there will be low staff morale.  For workers not to be corrupt, we must look at all the issues.

    “The only way to create jobs is to set up industries. How many workers can say they have gone for capacity training? It is pathetic. I know we will manage a state where workers will be happy and the people will be happy.”

  • Why we should worry about the economy

    SIR: If recent reports from Nigeria’s data powerhouse, National Bureau of Statistics, have much to glean from, then, the assertions of a dead economic nation might hold true, a glaring reason you should be worried about Nigeria.

    This is certainly not the best of season for the Nigeria’s economic profile and citizen’s welfare. To say the least, Nigeria is way below itsleast, perhaps, worst economic potential as a nation.

    Yesterday, the National Bureau of Statistics, NBS, released the capital importation report for the first quarter of 2016 stating that the country recorded its lowest investment inflows in nine years at N140 billion.

    According to the report, “This represents a decline of 54.34 percent in the final quarter of 2015, and a year-on-year decline of 73.79 percent. Both the quarterly and year-on-year declines were also the lowest recorded since the series began.

    “As a result of these changes, total capital importation has fallen by 89.13 percent since its peak level in the third quarter of 2014.”

    Literally, no country survives on its fortunes. Trade interaction facilitates expanded financial and non-financial gains for countries. For a consuming nation like Nigeria, the failure to increase investment inflow while outflows in forms of importation, illicit outflow (thanks to the grand corruption and impunity, here) expand, implies that local businesses that require foreign stimulation, ideas that appeal to the international community, and investments that should be propelled for external funds, are all starved to death due to a decline or seizure in investment inflows. This in turn guarantees low profit for businesses, deteriorated lifestyle, poor living conditions and shredded hope of economic welfarism for citizens.

    Compounding the economic woes on the home front, the NBS in its 2016 first quarter report, revealed that Nigeria’s annual inflation rose to a near four year high of 12.8 percent in March from 11.4 percent in February, driven by a rise in food prices with a 13.2 percent projection for April. It’s May already and the situations are not any better.

    Nigeria is facing its worst economic crisis in decades fueled by the collapse in crude prices, which has slashed government revenues, weakened the currency and caused growth to slow. The economy grew 2.8 percent last year, its slowest pace in decades.

    The consequences of this economic downturn are apparent. From massive unemployment to social dislocation, Nigerians are groaning.

    It is no longer a trending tale that the global oil market is fading, hence, the much felt impact on oil-dependent nations like Nigeria.

    The Nigerian government through synergy with relevant stakeholders must with its sense and vigour of urgency think through and implement short-term strategies that will cushion the effect of a dwindling volatile economy on Nigerians whilst working on viable medium and long-term agenda to build a more resilient economy independent of oil.

    Beyond rhetoric, this government must show itself capable of innovatively leading Nigeria out of the present economic and social quagmire.

     

    • Tayo Elegbede Jet,

     Lagos.

  • ‘Why tourism sector can’t drive economy’

    Unless massive investments in infrastructure are made, diversification of the economy into tourism might remain a mirage, Minister of Information, Culture and Tourism, Lai Mohammed has said.

    Mohammed, who kick started the sectoral debate on the diversification of the economy on the floor of the House of Representatives yesterday said that the culture and tourism sector could only account for a paltry 1.5 percent of the nation’s Gross Domestic Product (GDP).

    The lawmakers had asked the Minister the road map prepared by his Ministry to turn the culture and tourism sector into a foreign exchange earner capable of driving the economy.

    Speaker, Yakubu Dogara noted that the time for paying lip -service to economic diversification was over.

    “With the fall in crude oil prices, Nigeria really has no choice but to stop paying lip- service to the urgent need for diversification of sources of revenue for Nigeria.

    “The acute scarcity of foreign exchange, power supply challenges, falling GDP, fuel scarcity are some of the current matters of urgent national importance to be fixed.

    “It is our belief that Nigeria possesses the human and material resources required to successfully transform our economy and earn the needed foreign exchange for Nigeria.

    “It is time for Nigeria to develop and transform into a knowledge – based economy.

    “Indeed ICT, agriculture, solid minerals, culture, tourism and entertainment; trade, investment and manufacturing; taxation and finance policies; science and technology; efficient Infrastructure such as power, transportation, etc have huge roles to play in the diversification of the Nigerian economy,” he said.

    In his presentation, the Minister said the abysmal economic performance of the sector was due to a number of factors which lacking and decaying infrastructures was most critical.

    Mohammed said though, this year’s budget allocation was better, the Ministry would still present a supplementary budget to the National Assembly to be able to execute some of its programmes for the sector.

    In addition, he regretted that negative perception of Nigeria as an insecure and corrupt country contributed largely to the slow growth of the tourism sector.

    The negative perception, according to him was not helped by the incessant  travel advisories issued by certain Western country which discourage potential tourists hereby leading to low turn-out of tourists annually.

     

    On way forward, Mohammed said being the only sector that has the potentials of gainfully employing the unskilled and uneducated Nigeriana, the negative perception must be worked on.

     

    Towards this end, he said there is need for a change in visa regime as Nigeria is in dire need  of tourism-friendly visa, that will make visits to Nigeria less cumbersome.

     

    He  said though Nigeria would be working with other countries towards a change in attitude on perception, “It’s better to take control of narratives on Nigeria to change the perception.  There is a need for us to take control of the perception

     

    “We will exploit diplomatic channels to ensure that countries are more circumspect in issuing negative travel advisories in respect of Nigeria,” he added.

     

    While disclosing that his Ministry has gone into Memoranda of  Understanding  (MoU) with two local and foreign organisations on capacity building for local creative arts, the Minister stressed the need for the private sector to drive the sector.

     

    Saying that the sector can not be a stand-alone, Mohammed  said database, which is critical to the sector was lacking because of lack of information from those in  charge like Immigration Service, hotels among others.

     

    According to him, without the support of the Ministires of Foreign Affairs, Commerce and Industry, Environment, Immigration Service, Security Agencies as well as  investments in basic infrastructures, the sector can not function optimally.

     

    While seeking the support of the lawmakers, he said that an number of draft bills were  being prepared for presentation to the National Assembly on how to reposition the sector,  citing the National Tòurism Development Fund which he said will be the legal framework for funding capital projects in the sector.

     

    The Minister assured the lawmakers that the sector is capable of contributing 2.5 percent to the GDP within three years if the policies and programmes were vigorously executed.