The Nigerian Labour Congress has asked the Federal Government to put in place strong measures to revive the ailing country’s economy, saying the country was bleeding and need urgent attention.
Speaking at the 2016 May Day celebration in Abuja, President of the NLC, Comrade Ayuba Wabba said it was unfortunate that one year into life of the APC led federal government, the government was yet to bring out a blueprint for the creation of the three million jobs annually contained in its manifesto.
While admitting that the unemployment crisis in the country is a reflection of the wider national economic crisis, Wabba said “we have persistently pointed out, there is hardly any household in Nigeria where there aren’t at least two or more unemployed persons who have graduated from various tiers of our educational system, looking for job placement for upward of three to five years.”
“The ruling APC government in its manifesto promised to create three million jobs annually. We have waited one year for the government to bring out its blueprints on how it intends to go about achieving this.
“Congress will seek audience with Mr. President to get more information on this important matter. On our part as workers, we will be prepared and willing to contribute to any effort to create a ‘Job Creation Fund,’ nationally to tackle this problem.
“Our worry as organized labour is that if no concrete convictions are secured in the many corruption trials going on, between now and the next 12-15months, those who have stolen these huge fortunes will start feeling that they can outlive the Buahri Presidency, and return to a regime of “business as usual” as far as corruption is concerned.”
He stressed that while in the last twelve months of the Presidency of President Buhari, INEC has been left to run its show as it deemed fit, the desperation of politicians of the two mainstream political parties gives of cause for concern.
“Unless the unfinished reforms started with the partial implementation of the Justice Mohammed Uwais’ electoral reform committee are completed, we see dangers ahead.
“Among these reforms waiting to be implemented is the establishment of the Electoral Offences Commission.
“For us in organized labour, unless our politicians know that there is real possibility that their electoral rascalities carry real penalties of jail terms or long term disqualification from contesting for public offices, the type of disgraceful mayhem witnessed during the recent election in Rivers and other states would continue unabated.
“Similarly, unless we fine-tune the procedure for the appointment of the chairman and key officers of the electoral management body as recommended in the Justice Uwais report, the current progress made in the independence and operations of INEC are not irreversible”.
Tag: Economy
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Labour to Buhari: Nigeria is bleeding, give us blueprint on job creation
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Buhari’s economic policies “opaque, archaic”- Ezekwesili
Former Minister of Education, Oby Ezekwesili on Saturday faulted President Muhammadu Buhari’s current economic policies.
According to her, the economic policies are similar to those he promulgated during the military regime he led in the 1980s.
She spoke at a public engagement forum organized by the Covenant Church led by Pastor Poju Oyemade in Abuja.
Mrs. Ezekwesili said that Mr. Buhari’s “archaic” and “opaque” economic principles are not only encouraging massive corruption and abuse of power, but also hurting the poor they were intended to help.
She said: “During the first coming of this our new president, a command and control economic system was adopted. During that era, inflation spiralled. During that era, jobs were lost. During that era, the economic growth level dipped.
“That era wasn’t the best of eras in economic progress. What did not work in 1984 cannot possibly be a solution in a global economy that’s much more integrated.”
She said that Mr. Buhari was rehashing the same “command and control” approach towards economic issues which has left the country’s economic indices worse off since he assumed office almost year ago.
She added: “In over one year, the president is still holding to the premise that command and control is the only way out.
“In a year we have lost the single digits inflation status we maintained in past administrations.” She said
Mrs. Ezekwesili said Mr. Buhari’s distortion of foreign exchange system has left the poor it was intended to support even worse off.
She said: “The president comes into this economic philosophy on the premise that he does not want the poor to suffer. I can relate to that, a leader must not allow the poor to suffer, especially a leader who knows that most of his votes came not from the elite but from the poor.
“The problem though is that the intention and the outcome are diverged. The weakest and the most vulnerable suffer the impact of inflation the most. Enormous power is being abused as a result of opaque economic policies.
“Companies are suddenly finding themselves unable to produce because they’re unable to access foreign exchange,” she said.
Mrs. Ezekwesili, therefore, urged Mr. Buhari to sit down with his administration officials and reconsider the impact his polices have had on the nation’s economy.
“Mr. President should sit with his team and look at the economic evidence that speaks loudly. It’s time to sit back and review the well-intended idea of command and control economic principle.
“He should do what the Americans say that if it ain’t broken, don’t fix it,” Mrs. Ezekwesili stated.
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How rural development can transform economy, by don
For Nigeria to attain national development, it should prioritise rural development because the rural people are a reservoir of untapped talents, Prof Kolawole Adebayo of the Federal University of Agriculture, Abe-okuta (FUNAAB) has said.
He spoke at the 52nd Inaugural Lecture of the institution titled: Mercenaries and merchants: The dialectics of rural development in Nigeria, where he was lecturer.
The professor of Rural Development Communication at the Department of Agricultural Extension and Rural Development, College of Agricultural Management and Rural Development (COLAMRUD), described a mercenary as a soldier, who traverses the earth in search of its treasures and greedily accumulates as much as possible through whatever means.
He added that in doing so, and if there were any unexpected good, the mercenary usually claims the glory for providing that; but cares less and would do anything to amass wealth.
Adebayo pointed out that while the mercenaries, who enabled rural development many centuries ago could claim glory for the unintended or accidental results of their efforts, the shape and notion of rural development that followed was intentional and for selfish motives.
Defining a merchant as a business person who trades in commodities produced by others to earn a profit, the don said, a ‘merchant’is some one with a profit motive.
He listed the merchants in this context to include the International Bank for Reconstruction and Development (IBRD), also known as the World Bank, the International Monetary Fund (IMF), as well as small regional development banks, such as African Development Bank (AfDB), Asia Development Bank (ASDB), European Bank for Reconstruction and Development (EBRD), and Inter-American Development Bank (IDB).
To improve productivity and living standards of the rural people, Adebayo urged the government to boost the availability of credit and banking facilities to enable rural dwellers embark on productive ventures and employ more labour. This, he added, would take a lot of Nigerians out of the strangle-hold of poverty.
While the economy has witnessed the emergence of rural development merchants in the mode of commercial banks and specialised agricultural banks, Adebayo also called on microfinance banks to take advantage of the enormous market potential.
Acknowledging the efforts to build the capacities of microfi-nance practitioners undertaken by the Central Bank of Nigeria (CBN) and Nigeria Deposit Insurance Corporation (NDIC), the don, however, implored the institutions to extended it to the Board of Directors of the banks.
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How lack of standardisation hurts non-oil economy
Despite the renewed focus on non-oil export, following the plunge in oil prices, Nigeria has no functional laboratories for testing and certifying products before export. Experts say that lack of standardisation of made-in-Nigeria products and services frustrates efforts to leverage the non-oil sector to grow the economy. Assistant Editor CHIKODI OKEREOCHA reports
It would go down as, perhaps, the most embarrassing setback in Nigeria’s renewed push for non-oil export. Recently, five containers of beans exported from Nigeria to the Republic of Ireland were rejected and returned by the importers.
The products were reportedly filled with weevil. Consequently, the European Union (EU) slammed a ban on beans from Nigeria. The EU did not stop there. It also warned that if appropriate measures were not taken, it would extend the ban to other products.
For an economy severely battered by crashing oil prices at the international market, requiring urgent stimulation of the non-oil export sector to give impetus to the economic diversification agenda, this was certainly bad news and a major setback.
The Minister of State for Agriculture, Mr. Heineken Lopobiri, admitted this much when he described it as “a national embarrassment”. He, however, tried to calm the anxiety generated by the issue, saying, for instance, that the EU ban is only on beans and that it would expire by June this year.
He said the five containers of beans were returned to Nigeria because weevils were detected in them by the Republic of Island Quarantine Service. He said the containers were exported without the knowledge of the Nigerian Agriculture and Quarantine Service.
Lopobiri hinted that the government would return the Quarantine Service back to the ports to partake in the examination of import and export containers. He added that henceforth, for any agro-product to leave the country, it has to be certified by the Quarantine Service, as this is the global practice in the United States (U.S) and other developed countries.
But it is doubtful if stakeholders and operators in the non-oil export business were swayed by the minister’s explanations. Their fear is that the EU might extend the ban to other products, and this could hurt Nigeria’s renewed export promotion drive.
Such fear is hinged on the plethora of challenges that have continued to hold back the non-oil sector from taking its pride of place as hub for rapid revenue base expansion, sustainable growth and employment generation. For instance, Lopobiri’s hint on possible return of the Quarantine Service to the ports underscored the challenge of inconsistent policy framework and lack of inter-agency collaboration with regards to non-oil export business.
In 2011, the former Minister of Finance, Dr. Ngozi Okonjo-Iweala, sacked about nine agencies, including the Quarantine Service from the ports to reduce bureaucracy. Now, the Service, including Standards Organisation of Nigeria (SON) is pushing for a return.
While Lopobiri argues that the return of the Quarantine Service to the ports would allow the Service partake in the examination of import and export containers, the Acting Director-General of SON, Dr. Paul Angya, believes that returning the agency to the seaport would stop the importation of sub standard goods into the country.
However, whether or not the agencies return to the ports, it still does not resolve the more fundamental issue of lack of laboratories for testing and certifying made-in-Nigeria products before export. The lack of quality infrastructure especially laboratories to aid certification of locally produced goods for export market, has continued to erode the competitiveness of locally made products in the international market.
“A quality infrastructure for export trade is vital and a laboratory is the way to go. If we do not have the laboratory to test those products and to verify their standard conformity to the standards obtainable abroad, they cannot be exported overseas,” Dr. Angya said. He expressed concern over Nigeria’s lack of capacity to test and certify products in the country.
The Acting DG, who spoke during a recent working visit to Lagos, lamented that Nigeria still depends on its neighbouring countries particularly Ghana to verify compliance of suspected seized goods. “… because our laboratory is yet to be completed, some of these seized goods have to go for testing in Ghana,” he said.
He, however, explained that the agency is speeding up the construction of this facility to make Nigeria self dependent in testing and certifying locally made products before they are exported. He said the laboratory, located at Ogba, Ikeja, Lagos, is 85 per cent completed and that when completed, it would ensure that locally made products become exportable and acceptable anywhere in the world.
Dr. Angya projected that the facility, when completed, would also aid the Federal Government’s drive for alternatives to oil export by more than 50 per cent. According to him, the laboratory will house about four different kinds of laboratories to help the country test and certify products before they are exported.
“This laboratory is going to house about four different kinds of laboratories, which include the chemical, food and engineering laboratories and it is only when these laboratories are tested and accredited that we will stop taking our products to Ghana for testing.
“Our products will be tested and certified in Nigeria to be exported. I believe that when this laboratory is completed, it will aid the Federal Government’s drive for alternatives to oil export by more than 50 per cent”, he added.
A Quality Management Practitioner and National President of Association of Systems Management Consultants, Mazi Colman Obasi, told The Nation that lack of standardisation remains one of the greatest hurdles before Nigeria’s current efforts at growing the non-oil economy. He lamented that lack of a national quality infrastructure is damaging the nation’s economy and brand reputation.
According to Mazi Obasi, a national quality infrastructure is a system of institutions, which jointly ensure that products and services produced in the country meet predefined specifications. It also provides technical support to companies so they can improve their production processes and ensure compliance with regulations or international requirements. The lack of it, he said, is not only partly responsible for Nigeria’s rising unemployment, but also why Nigeria is not globally competitive.
Hear him: “Until we have many companies that are accredited with ISO 9000 management systems certification, we are not going anywhere; we cannot export anything. Nigeria should work towards having a quality management plan. Not up to 1, 000 companies in Nigeria are ISO certified.”
Indeed, products and services manufactured in Nigeria lack global quality certification. They are denied access to markets in developed economies, a situation that has been a pain in the neck of manufacturers, as their productivity and competitiveness continue to suffer.
According to Mazi Obasi and other experts, standardisation will boost the competitiveness of locally made products at the international market and ensure the global acceptance of products and services from Nigeria. This is particularly true for Nigeria considering the fact that her manufacturing sector is still emerging, depending almost totally on other countries for her supplies of manufactured products.
The nation does not have much to offer other than raw materials and that makes the people the poorest in the world. Cocoa, rubber, shear butter, petroleum, iron ore and other commodities sell cheap from Africa and once the other continent has processed them into secondary or tertiary products like beverages, pharmaceuticals, shoes and machines, Nigerians buy them at a huge cost.
SON, EU move to standardise Nigerian export
Bad as the situation is, the SON and the EU have begun an initiative to establish a code of practice for Nigerian agricultural products for export.
A statement signed by the Deputy Director, Standards Directorate, SON, Mrs. Chinyere Egwuonwu, and Mrs. Irina Kireeva of EU said as part of efforts to achieve the goal, the organisations had concluded plans for a final national training on standards on code of practices for the products.
The theme of the training, scheduled to hold in Abuja soon is Standard and Quality: Unleashing the potential of agricultural products to grow the non-oil export in Nigeria.
The statement said the training will focus on products such as cocoa, beans, shea butter and melon. It added that the event would unveil the result of training facilitated by the organisations focusing on exports on key agricultural commodities.
The workshop, the statement noted, would equip participants with the technicalities of the export market with regard to the issues of development of standards and the engagement of the private sector.
It said the workshop was critical for transforming agriculture in Nigeria and would help participants understand that Africa could feed itself through agriculture and export.
The statement, made available to The Nation, added that the training, organised by African Caribbean and Pacific Countries from the EU’s Technical Barriers to Trade, would lead to adopting modernised and commercial agriculture, which is key to transforming the country’s economy.
Interestingly, agriculture and export are two key segments of the non-oil economy, which government is now focusing on. According to experts, the sector is more inclusive and growth-oriented. It is also more sustainable and characterised by high economic linkages.
The hope, therefore, is that the SON, EU collaboration to standardise made-in-Nigeria products would help unlock these bountiful potentials.
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How Dangote, Umeofia, others are driving non-oil economy
Attention has shifted to developing the non-oil sector in the face of dwindling oil revenue. Some big players in agriculture, solid minerals and cement, among others, have taken up the challenge. Assistant Editor OKWY IROEGBU-CHIKEZIE writes on how their exploits are boosting the economies of states where they operate.
Former Lagos Chamber of Commerce and Industry (LCCI) president Mr. Remi Bello is one of the leading advocates of economic diversification. He has been calling on the Federal Government to diversify the economy by paying attention to the non-oil sector. He believes that agriculture, solid minerals and manufacturing, have a lot of prospects. To him, diversifying the economy will correct its age-long dependence on oil, in addition to ensuring that Nigeria earns more.
The former LCCI chief noted that the challenges facing Nigeria because of the fall in oil prices have made the need to look inward imperative. He regretted that because Nigeria had, over the years, relied almost on oil to fund its economy, most states are having challenges meeting their basic financial obligations. He was, therefore, emphatic that if the economy must survive and industrialise, there is an urgent need to diversify sources of income and encourage local entrepreneurs.
Minister of Solid Minerals Development Dr. Kayode Fayemi could not agree less on the need to encourage local entrepreneurs to harness the immense potential in the non-oil sector.
At the groundbreaking of Dangote Cement plant in Okpella, Edo State, Fayemi said the greatest desire of the government was to see Nigerian entrepreneurs working with it through the Backward Integration Policy (BIP) to unlock the potential of the solid minerals sector.
According to the minister, a recent report his ministry inaugurated revealed that Nigeria’s mineral resources can be used to drive the country’s industrialisation. The report added that whereas the sector contributed just 0.34 per cent to the Gross Domestic Product (GDP), with more investment in the sector, the government would stand to earn $25 billion annually by 2025. He said plans had reached an advanced stage to encourage states to tap their mineral resources, insisting that the country can only grow as more local players come on stage.
Interestingly, some discerning local investors have seen the bountiful opportunity which the Federal Government’s BIP has thrown up and are willing to invest in the states where the mineral resources are domiciled. Already, states, such as Lagos, Ogun, Edo and some states in the North are benefitting from huge investments by some indigenous players and multinationals. This has given more impetus to the BIP, which ultimately seeks to pull Nigeria out of its perpetual dependence on imports, particularly, since that crude oil prices have been crashing since mid June 2014.
For instance, in Edo, where the President of Dangote Group, Aliko Dangote, is producing cement locally by using the abundant raw materials in the area, the Governor Adams Oshiomhole and the indigenes have been jubilating.
The governor personified that joyous mood when he said: “By investing $1 billion in a cement plant in Okpella community, Dangote has established a factory that will feed thousands of mouths directly every day, while 100,000 people will benefit from education and health facilities that will come from the investment.”
The six million metric tons Dangote Cement’s new plant in Okpella expected to employ thousands of youths, directly and indirectly in the next 18 months. This was why Oshiomole lauded Dangote’s aggressive investment drive, noting that without his (Dangote’s) resolve to build industries and employ Nigerians, so many youths would have been jobless.
While saying that Nigerians will be forever grateful to the industrialist for helping to reduce unemployment in the country, the governor said: “Dangote is a special breed. He is an enigma that has done so much for the youths of this country. He should be lauded for doing so much to develop our youths and put food on the table of thousands of Nigerians. For us in Edo state, we are grateful and will continue to be grateful for this huge investment.”
Apparently endorsing the decision of local entrepreneurs in the mould of Dangote to help drive the non-oil sector, Oshiomhole said the practice where manufacturers obtained land from government only to use the land as a base for importation was the most destructive practice for an economy.
His words: “Dangote has set an example by manufacturing locally, using Nigeria’s abundant natural resources. It is a wicked practice for investors to get government land and use it as a base for importation. If Nigerian investors invest in the economy, the economy will grow from strength to strength and young men will have jobs.’’
The Okuokpellagbe of Okpella Kingdom, Dr. Andrew Dirisu, also echoed the hopes of residents of the community that the investment will create jobs and pther positive spin-offs. While lauding the doggedness of Dangote Cement and its prompt response to the call for the establishment of the cement plant, he commended the State Governor for his support in acceding to the desire of the people to have Dangote Cement in the community, since the raw material is available there.
The paramount ruler, who promised that the community will provide the necessary enabling environment for the plant to operate and generate economic activities, also
urged the company’s management to ensure that the various Corporate Social Responsibility (CSR) projects that the indigenous conglomerate is known to have provided for its other host communities in various sectors are replicated in Okpella to the delight of his people.
The expectant mood of the people is not lost on Dangote, which was why he noted that the new cement plant could transform the economy of Okpella and Edo State. He said investment in local cement plants saved Nigeria $3 billion spent on importing cement. While promising to always invest in Nigeria, as the country remains the best place to invest in the world, he urged other private sector investors to invest in critical areas of the economy. He said the government has expressed readiness to resuscitate the industrial sector.
The Executive Secretary, Nigeria Sugar Development Council (NSDC) Dr. Lateef Busari, said the upward swing in the size of injected investment by operating companies in sugar manufacturing expresses possibility in achieving self sustainability. He said the outlook for local sugar production is optimistic with the rekindled commitment of sugar companies to exploring backward integration in achieving self sufficiency.
Busari, who spoke with The Nation in an exclusive interview, said the refineries, particularly, Dangote Sugar Refinery, has expanded and refurbished its factory operations site at Savannah Sugar Company (SSC) in Numan, Adamawa State with about 6,000 hectares (ha) of sugarcane plantation.
He noted that Savannah, the most efficient of all plants has also acquired a new 12,000TCD mill and expanded the estate to include adjoining Guyuk with size of about 7,500 hectares recently granted by the State. Also, the firm has acquired land in six other states including Lau/Tau, Taraba State; Kebbi State; Kaugama, Jigawa State; Mambe, Niger State; Kpata, Kwara State and Kogi State for sugar projects.
Erisco Foods Limited
also investing
Dangote Group is not the only indigenous operator that has thrown its hat in the non-oil ring. In tomato puree manufacturing, for instance, an indigenous firm Erisco Foods Limited has taken the gauntlet by investing over N300 million into the production of tomato paste. The tomato paste company, said to be the largest in Africa and the fourth largest in the world, is billed to create thousands of jobs.
The company’s Chief Executive Officer, Chief Eric Umeofia, however, urged the Federal Government to sustain the formulation of positive policies that would enhance production capacity of manufacturers, stressing that the issue of multiple taxation should be addressed. He stated that the foreign exchange restriction of 41 items by the Central Bank of Nigeria (CBN) has saved the country a huge forex and compelled Nigerians to patronise home-grown foods.
Umeofia said for the company to fast track its backward integration programme, it has developed a technology that synchronizes its existing machines to produce tomato paste directly from fresh tomatoes to tomato pastes and ketchups. He stated: “The Erisco Foods revolution in tomato paste production will stop the annual wastage of over 75 per cent of fresh tomatoes across Nigeria. If we continue with the good policies of the present administration, there will be nothing like a tomato glut anywhere in Nigeria in the next two years.”
The CEO explained that as off-takers, the company will produce and process to meet its local demands and export to earn foreign exchange provided government continues to support manufacturing. “Our backward integration programmes planned for Jigawa, Sokoto and Katsina will generate employment and prosperity for 50, 000 Nigerians within three years,” Umeofia said, adding that the company has an installed production capacity of 450,000 metric tonnes per annum in its Lagos factory alone, making it the biggest in Africa and 4th Largest in the World.
He urged the government to direct heads of government agencies involved in industrial sector to prioritise local manufacturers over their foreign counterparts. He pleaded with government to stop giving undue advantage to what he called ‘briefcase’ foreign investors who camouflage as industrialists but whose primary interest is to import finished goods as raw materials without paying taxes or the relevant customs duties.
Agric also on local
investors’ radar
Apart from manufacturing, the Dangote Group is also investing heavily in agriculture for massive employment generation. For instance, the group recently commenced multi-billion dollar rice projects in some states in the North, aside flagging off a rice out-grower scheme, with the distribution of rice seedlings to farmers in Jigawa State. The plan, according to Dangote, is to reduce Nigeria’s dependence on imported rice, create massive jobs for the people and provide good returns to the famers.
He explained further: “We envisage producing up to one million tons of white rice with the cultivation of 200, 000 hectares of land. This will lead to a conservation of about $11 billion presently spent on importation of food items that could otherwise be produced locally. It is gratifying to know that the Federal Government has recently announced that it is putting in place strategies that will make farmers have greater access to implements and other inputs.”
Local manufacturers in the flour milling sector are also not left out in the backward integration programme. For instance, Flour Mills of Nigeria Plc (FMN) has invested in Thai Farms and other agricultural projects to cultivate raw materials for most of its processes.
Although there are still challenges with meeting factorydemand, thereby necessitating importation, the company has been able to reduce importation of raw materials by over 50 per cent, according to the Group Managing Director, FMN, Mr. Paul Gbededo.
Government
reaffirms support
The Minister of Industry, Trade and Investment, Dr.Okechukwu Enelamah, said his ministry is ready to play a critical role in the nation’s economy, especially now that the government is poised towards the diversification of the economy away from oil in a sustainable manner.
He said he plans to achieve this through creating an enabling environment for industry, trade and investment through the implementation of the Nigeria Industrial Revolution Plan (NIRP), championing the cause of the Micro Small and Medium Enterprises (MSMEs) as a means of creating jobs and achieving inclusive growth.
Enalamah also said despite the challenges the nation is facing, the present administration is poised to attract long-term local and foreign investments.
In his words: “The flip side of the crisis is the opportunity it presents; to create something new; to develop new attitudes and appetites.
“Fully convinced that the crisis is too good an opportunity to waste, the administration of President Muhammadu Buhari has started the difficult but rewarding task of breaking free from our traditional dependence on oil and gas and in its place developing a diversified export base and a solid base of domestic manufacturing.”
Enalamah hailed indigenous entrepreneurs and promised that government will do all things possible to create an enabling environment for them to thrive.
Secretary to the Government of the Federation, Mr. Babachir Lawal, also said the government would continue to support the growth of indigenous businesses, especially in this period of economic downturn.
He said the current economic reality calls for a decisive policy thrust to address issues which must be pragmatic enough to leverage on.
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‘Nigeria needs 2.4 mbpd to grow economy’
President, Nigeria Association for Energy Economics (NAEE), Prof. Wumi Iledare, yesterday said that Nigeria needs to boost its crude oil production to more than 2.4 million barrels per day (bpd) to stabilise the economy.
Iledare, who spoke during a pre-conference media briefing in Abuja, said the upcoming 9th NAEE/IAEE international conference holding next week in Abuja, would address how the country could ramp-up its crude oil production and how proceeds from it could be used to energise the economy.
He said although the 2.4m bpd is not enough to sustain the economy, or even grow it, resource management is vital because studies have shown that emerging economies often experience economic degression when oil prices are good because they tend to be lacking in capacity to manage the boom.
He said the purpose of the conference is to explore the energy supply options for energising emerging economies like Nigeria, adding that the low oil prices should not be viewed in bad light but as an opportunity to diversify the economy and do away with petroleum subsidy.
“In our opinion, low oil prices offers Nigeria an opportunity to cut wastage in spending, set aside fiscal irresponsibility, reduce overdependence on oil and get rid of bloated governance spending expenses,“ he said.
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Economy: Bishop seeks international help
The Chairman, Southwest zone of the Christian Association of Nigeria (CAN), Archbishop Magnus Atilade, has called for sincere and transparent intervention from the international community to solve Nigeria’S economic challenges.
Atilade spoke at a news conference on a seven-day Universal Day of Prayer for Nigeria holding between April 29 and May 5 by the Christian Welfare Initiative (CWI) held in Lagos.
According to him, there is an urgent need for the international community to focus its attention on Nigeria “as we seek for ways to get out of the quagmire of economic woes”.
He said: “The end of our problem is not in the hand of President Buhari who is doing all his best to make Nigeria work but in the hands of Nigerians and the world to make it work. The thefts of our common wealth are the highest in the world and retrieving those stolen wealth require sincerity and transparency of the world.”
He lauded the anti-corruption fight, adding that “catching the thief is not the end but how we outdo corrupt people and reorganse the system to make stealing difficult locally and internationally is key.”
Atilade, who is also the National President of CWI, said: “President Buhari means well for Nigeria and is working hard at providing the dividends of democracy but he needs the goodwill of the world to succeed.”
He added that the situation in Nigeria is “not only physical but spiritual and it is our duty to tell the world that we are facing peculiar problems. It involved individuals and collective will and action for our problems to be solved”.
He also appealed to Nigerians to continue to pray and lift Nigeria to God.
“With prayer, we can move the hand of God. It is the will of God for Nigeria to be peaceful, prosperous and progressing and God will make it happen when we pray to him in faith,” he said.
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‘Strategic action plan required to move economy forward’
Dr. Obadiah Mailafia, a former deputy governor of the Central Bank of Nigeria, economist, international development specialist, top executive of the African Development Bank, in this interview with Emmanuel Ado, Host of Let’s Talk – a current affairs programme that airs on Liberty Radio, Kaduna, speaks on the budget, the power crisis among other issues. Excerpts:
Finally, we have a budget of N6.6 trillion. As usual, N2.6 trillion is for recurrent expenditure and N1.5 trillion for capital expenditure. Is this not a failure already, considering that one of the critical objective was to increase capital spending so as to address infrastructural problems and create jobs?
Well, I wouldn’t use the word failure already, no. On the contrary, I think it is some form of incremental progress. Don’t forget that until recently, a lot of our budgets used to be like 20 percent capital expenditure and 80 per cent capital. Today it’s more like 28 verging on 30 percent recurrent. I think that we have made some progresse and we should see it that way. We hope that in the coming year that there will be more progress. At least let it be 50, 50 capital as well as recurrent. Why do I say so? Because it is only when you invest in capital projects that the economy will grow, recurrent expenditure is just for consumption, nothing will come out of it. You consume and that is it. Whereas if you invest in capital expenditure, you are sure that the economy will grow tomorrow, it will create more jobs, create more infrastructures and the overall economy will prosper. In the Asian countries, Singapore, Malaysia, China and the rest of it, in fact normally recurrent expenditure is about 20 percent, capital expenditure is 80 percent. In Nigeria, we have completely reversed those terms and we need to work on it if our economy is to grow in the coming years.
You want 50/50. Is that possible?
Well, it is possible. We can move towards that if we plan well ahead, we should be able to reach that level. Why not?
If we’re going to do that, it means there will be massive layoff of workers to achieve 50, 50.?
No. I don’t think it will automatically translate into layoffs. Today we have governors, executives and all the rest of it – all the paraphernalia of government, so many cars, so many hangers-on, if we could shed some of that excess baggage, a lot of money can be saved that could then be deployed into capital expenditure.
I‘m not in favour of laying off workers. I don’t think it is a good thing. People have families, people have children in schools and we have to be compassionate. But having said that, we must cut cost. All these excess baggage that government people have around them, we need to shed some of them so that money will be left over to invest in capital expenditure. We can do it. We can plug the sources of haemorrhage, the sources of waste in the economy, so that there could be money left over for physical infrastructure projects.
Now the economic summit, was it a necessary exercise? Why do you think they needed to do that?
I think they are two separate issues – the necessity or the otherwise of the economic summit and the fact that government came into power without any economic blueprint. Summits never settles anything. They can be talking shops. Sometimes, government deliberately creates summit as a means of diverting attention. So, it depends on the motivation. I know there was a retreat at the level of National Economic Council involving the states and the Vice President chaired the National Economic Council. They had a two-day retreat presumably to discuss the critical issues facing the economy. We don’t know what were the details of the outcome but we understand that they gave priority to creating jobs and at the same time, an amount of N350billion was announced as quick fix programme to get the contractors back to work to pay their backlog of salaries to get them back to work as soon as possible. I welcome that development any day. It is good for us to talk and to engage in some amount of introspection and to build the necessary coalition in order to help the economy move forward. The other aspect of your question has to do with the blueprint. The fact that the government didn’t have a blueprint, well, they have answered that question. When they were campaigning, they had items which they hope to achieve. For some, that is good enough. From my own humble experience, when people don’t want to have economic blueprint, it could be that they have agendas and they don’t want those agendas articulated clearly, they prefer an implicit approach in which you will know what the blueprint is by the actions and pronouncements as they go along. But in this day and age, I think economic blueprints are very good because they serve as rallying point for all stakeholders – this is what we want to achieve over the coming years, we need your support, and we need to mobilise everyone. That blueprint is also very good for external investors to be able to anchor their expectations. This is what the government intends to do, this is where we come in, this is the magnitude of resources needed, we can mobilise capital and the rest of it. It is also a marketing tool for the international development agencies to better appreciate what the government wants to achieve, what its priorities are and how they can engage in meaningful dialogue with the international development agencies. So, of course, I have a bias in favour of having an economic blueprint. The fact that they don’t have one is not necessarily a crime but I think they should be more upfront about their economic thinking and what it is they want to achieve in the short, medium and long terms.
In summary, what do you think is exactly Buhari’s political and economic principles?
Well, President Muhammadu Buhari is a patriot, he is a Nigerian nationalist. He is very angry at the way the country has been thrown to the dogs over so many years, the magnitude of corruption. It is staggering and beyond belief. So, I think he has a point in some of the things he is trying to do. But I sometimes worry that he may be more analogue than digital as far as the economic thinking is concerned. During his first incarnation as military head of state, that was an era people believed in controls in the role of the state in commanding heights of the economy. Ever since that time, the collective wisdom of economic size is more and more towards strong and predominant role of market forces. I’m a believer in the market itself. But I will caution that even the market is made up of human institutions that are depository of information, there is lack of information some times, there are vested interests and so on and so forth. What I will advocate is a strong, smart entrepreneurial state being the driver of economic growth, economic development within a context of open market micro economy. I think this is what we need to go forward.
Now you have talked about outcome of the summit, of course the President described the power situation as no longer a laughing matter. I read something you once wrote about the DISCOs and oil marketers and the Lebanese businessmen that they are involved in this power problem, how true is this assertion? The second part of the question is what is it that Nigeria is doing wrong on this issue of power, considering the amount of money that has gone down the drain?
Money doesn’t seem to be the problem. Well, let me make it very clear. I have nothing against Lebanese. They have contributed a lot to the Nigerian economy as they have contributed to a lot of the countries of West Africa – from Cot-devoir to Liberia, Sierra Leone and the rest of them. My point is about cartels. They are very strong cartels in the Nigerian economy. A cartel is a group of individuals or firms who corner a sector of the economy because they don’t allow anyone to come in. They fix the prices in order to fleece off customers. In Nigeria, there are cartels, they corner a lot of sectors in the economy and that is not good enough. There are cartels in the pharmaceutical industry, there are cartels in power sector, especially in generator importation, there are cartels even in luxury buses, and there are cartels in long distance trucking. These are the people who went to Shagari and said ‘no, don’t start railways, we don’t want them to kill our trucks.’ They are all sorts of cartels, oil sector and the rest of it. In this country, we don’t have anti-monopoly and fair competition legislation. In all advanced and prosperous economies, there are anti-monopoly agencies. In the European Union, there is a Fair Competition Commission. In America there is antitrust legislation. Before then you see the big time capitalists – the Rockefellers of this world cornered the oil sector to himself, Carnegie cornered all the steel sectors to himself, J P Morgan cornered the financial and banking sector to himself. There were all sorts of trusts and cartels. And if you want our economy to grow and prosper, there is even a cartel for cement, I forgot. So, we are buying cement at triple prices than it is sold in other countries. So we need legislation to crush these cartels. Nobody wants to talk about it because anybody trying it, the cartel will either destroy him or they will spend all their money to kill the anti-legislation. So I would hope that President Buhari will be bold enough to set up an antitrust-legislation in order to break the back of these wicked and diabolical cartels. They are there and they are doing a lot of havoc to the economy of this country. I don’t blame the power deficit only on the cartels; it is an issue of incompetency on the part of the administration. The fact that you spent on a capital project is not good enough. The fact that you created an enabling environment is not good enough. You must have a sound and robust mechanism for monitoring and implementation. We don’t have those instruments in place. That is the crux of the matter.
In spite of the billions, we are not likely going to get steady power supply is that what you are saying?
Yes. We don’t have strong institutions for monitoring the implementation. If you will recall, President Yar’Adua of blessed memory actually toyed with the idea of setting up a situation of war room for the power sector to declare even an emergency on the power sector. If we want things to move in this country, we must fix the power sector. And like the Chinese, we should be ready to take out those who are sabotaging it. Take them out by legal means and by illegal means. In war and this is a war, all means are fair if we are to fix the electricity situation. It is as serious and it is as desperate as that. We can do it. Jos Plateau Kura falls can provide electricity for the whole of Plateau State, Southern Kaduna, Nassarawa, Kogi and the Federal Capital, if only we can dredge the Kura falls and set up new turbines there. Our situation has reached a point where all means are fair. It is a war and in war, you can commandeer anything from anybody. We need a strong and serious approach to fix electricity.
You have described the situation as almost like a war situation. Will you support the ban on the importation of generators?
You know, even in Europe and America where there is hundred percent power supply 24hours, they didn’t ban generators altogether because people still have farms where their investments are off-grid and people still go camping where there is no electricity. So one way or the other, we still need generators. So I don’t advocate outright ban. What I advocate is nationalisation. We should nationalise all importation of generators. Only government can import generators. If you put that legislation, we will kill the cartels by the scruff of their necks and that is what we need to do. Only government should have a right to import and distribute generators. You know, part of the problem is that at one stage in this country, the Vice President of this country had one of the biggest generator importation license in Nigeria.
Who was this?
No, I cannot say his name. At the sametime, he was in charge of the power sector. So you can imagine, will such a person be interested in having steady electricity? If we want to fix the economy of this country, a lot of things are dependent on the power sector. In fact, we did some econometrics modelling when I was with the CBN that showed that if we can fix the electricity alone, the GDP of this country will increase automatically by 60 percent on top of what we already have. So, fixing power sector is very central. Without power sector, without stable electricity, you will not have for example tramps, you will not have metros, a lot of the railways will not function and all of that. So fixing electricity is central to fixing a lot of other issues.
Are you ready to see the Pre
Have you met former President Olusegun Obasanjo since he removed you as Deputy Governor of CBN?
I met him many times. He is my baba. He is somebody I respect as an elder statesman. Mostly outside Nigeria, I have met him in Boston, the Middle East at one of those big conferences. We sat together, we had tea together, we chatted for hours but the subject of my leaving CBN never arose. I decided that it was not polite to raise such a topic. It has been so many years down the road, it is not something I sulk over. I believe in my name with great honour. I have kept my name with honour and dignity and that is the way it is going to be. And look if you find yourself in a situation, in a mad house and you are the only sane person, the rest of them will see you as if you are the mad one and they are the sane people. I use that analogy with great responsibility. There were a lot of rots going on and my crime was that I was not part of that rot. So I am happy that I left the place alive, I left the place with honour because there was a lot of rots going on. This issue of people taking money that was meant to be destroyed, it didn’t happen yesterday. It didn’t start from yesterday. It has been going on for quite sometime. Worse things were happening at the mint. These things were going on. Do you know that even one of the plates allegedly some years ago disappeared? So these things have been going on. The integrity of the naira is at stake. The integrity of the central institutions for managing monetary policy, for managing our currency have left rooms for serious doubt and a lot of things were going on with the way even the banks were being restructured. You know you are going to restructure a bank, somebody comes and invites you for dinner and they begin to ask you, how much do you need. You borrow money from them, you borrow a few billions, you buy shares in that bank which you know you are restructuring and they are going to merge and the value of the shares will quadruple. I refused to participate in that and that was part of my crime. They even set up panels to investigate me. In fact they went outside the country to where I went for meetings, conferences; they found nothing because there was nothing there to be found. So I left off my head and there was a lot of jealousy. They felt that I got my Phd at the Oxford and I was a scholar there was something that a lot of them couldn’t stomach. I didn’t take myself to Oxford but some people just hated the idea of it and all sorts of things. Well, I can’t change myself. And, believe you me, I’m not desperate. I’m living very comfortably. You know I’m in demand all over the world and I keep a regular column in BusinessDay just to keep the national conversation going on public issues, public policy issues on the economy and the rest of it. The problem with this country is that if you have a hourable background and you are honest and sincere, you are an enemy of the people. I can’t change. I’m a son of missionary parents. My father started working with a white missionary even before he got married and he only died over a year ago at the age of 100. He is a man of great respect, great honour, a very loving and God-fearing man. I took after him. He was over 50 years before he got married and I’m his first child. We were extremely close. He prayed and fasted for us till he died. In fact, I’m a very happy and contended person. I can make millions of fortunes, if I want to, any day. God has given me the knowledge, the wisdom to achieve anything I put my mind to. So this is not about government jobs.
As an indigene of Kaduna State how will you rate Governor Nasir El-Rufai’s performance thus far?
Well that is a difficult one because he is a friend of mine. Look he is the best federal minister for Abuja we have ever had in the history of this country. Make no mistake about it. He was by far the best. If it were not for him, today, Abuja would be worst than Lagos in terms of disorderliness and chaos. He enforced the master plan for Abuja. He modernised it. He built this dirt collection centres. He created a system that has worked and today Abuja is the pride of the nation.
Some people might disagree?
Some people might disagree and it is fair enough that they disagree but that is my own personal opinion. I think I know Abuja well enough to reach that conclusion and I’m in a position to compare with Lagos. So, I know what I’m talking about. He is a brilliant man. Don’t get me wrong. But I suspect that his intelligent quotient is by far higher than his emotional quotient. You see, psychiatrists and Nero surgeons today will tell you that you don’t need only I Q and it is not the only measure of intelligence. You need to combine it with EQ ….If you have only IQ and you have no EQ you are just like a robot. But when you combine IQ with EQ then you become a highly effective machine that understands not only intellectually, but understands also emotionally and can get people to do what you want them to do, you can exercise effective leadership. So I’m afraid that his IQ is higher than his EQ. So, that is my own assessment.
Where do you stand, to devalue the Naira or not to?
I think the question is misplaced. With all respect, I don’t think that is the biggest issue facing the Nigerian economy right now. It is not about to devalue or not to devalue. The first question I would ask you is what our greatest economic challenges are right now. Our greatest economic challenge right now is not whether the Naira is overvalued or whether it should be devalued or not. Our greatest challenge is that we have been dependent on one mono-cultural export, oil whose price has collapsed. In a year, we have lost 70 percent of the revenue from oil and we are depleting our oil reserves and we are not going into alternative export in order to address the deficit. Left to me, it is the biggest challenge. The issue of whether the Naira should be devalued or not should be a secondary one and I will not refocus on the economic dependent on that. Having said that, I think when people talk about devaluation, it is strictly speaking in reference to a fixed currency system. There are three exchange systems in the world. You have fixed exchange system, flexible exchange system and the free-flowing exchange system. When you talk about devaluation, it is strictly in reference to the fixed exchange rate system. Nigeria’s exchange rate system is based on the flexible exchange system. So, the word there to apply is depreciation rather than devaluation. Right now, there is a differential between the official rate and the parallel rate. The parallel rate is about N315.00 and the official rate is still around N199.00 to N200.00. So long as that differential exists, there will be continued to be rent seeking activity. Right now a lot of the banks are chasing the governor of the central bank ….he has become the biggest and the most powerful man in Nigeria, because he controls the allocation of foreign exchange. They follow him everywhere, they are begging, they are groveling. All they want is foreign exchange. They don’t use it to import anything, they use it to buy and sell and round trip …because they make more money in that. Why waste your time going to import when you can just sell it in the black market and make your fortune. This is what is happening. So how do you plug that gap? I think that we have to allow water to find its level so that you plug that gap and you eliminate the differential between the parallel market and the official so that it will be more expensive. But that will mean that those who truly need foreign exchange will have access to it at the market rate and they can use it to import whatever they want to import in order to develop their businesses. So yes, eventually you may need to depreciate it to eliminate the gap. Let me also say this that my vision for the naira is that the naira will become a strong and stable currency that is progressively internationally convertible. Don’t forget that in those days, in the 70s it was N1 to $1. We may not go back to that level. The issue was that you could go to, some of our brethren Muslims who go to Saudi Arabia, naira was accepted. You go to London, Liverpool Street where they sell electronics, some of those Pakistanis and Arabs traders there accepted the Nigeria naira. Today nobody wants to even touch the Nigeria naira. Not even in Benin. They are rejecting it now. We can only achieve that when there is integrity in the central institutions that govern the monetary system – from the Central Bank to the mint and the rest of it, strong institutions, transparent institutions, forward looking institutions, effective institutions.
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How govt can boost economy
The Federal Government has been asked to galvanise the economy with policies that will drive business growth.
A real estate consultant, Mr Omo Aisagbohi, said things were not moving for now because of the liquidity crunch.
Speaking at Trinity Mall customer reward show in Ikeja, Lagos, he said the real estate sector was the most affected by the current economic hardship. The dearth of liquidity in the system, he said, was discouraging patronage for personal mortgage ownership.
Aisagbonhi said: ‘’The real estate sec experiencing tough time because there is no liquidity. People are merely trying to survive and those who have money are careful about spending. Generally we are struggling to remain in business as things have gone worse. If not for banks that help us, maintaining our equipment have become more expensive.
“We expected that the first few months of the administration will make things better. But I don’t think our sector is growing in particular. One must first be well before thinking of owning a house. My fear is that government is discouraging hardworking Nigerians from owning their houses.”
He explained that challenges, such as multiple taxation, general import policies and difficulty in accessing Foreign Exchange (forex), among others, have prevented the sector from providing affordable housing to Nigerians.
He said the implication was that it encouraged smuggling of goods and services into the country while stimulating the economy of neighbouring countries.
The property expert noted, however, that those who make the harsh policies are not aware of the damages they are doing to the economy. He said they are enriching other countries as they smuggle those goods in.
While stressing the need for the government to rethink its policies in order to stimulate the economy, Aisagbonhi emphasised that the government should be less concerned with the provision of housing, but focus on creating the enabling environment for private sector operators to thrive.
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Labour to Fed Govt: fix the economy
Labour has called on the Federal Government to take steps to revamp the economy.
The Trade Union Congress of Nigeria (TUC) is worried that the economy is down and thousands sacked because of the closure of some companies.
The President, Comrade Bobboi Kaigama said: “Aside fuel scarcity , the dearth of US dollars has made it impossible for firms to repay foreign loans and import needed materials for production of which the consequence is mass sack of workers.
“Our role as a labour centre is multifaceted. We are saddled with the responsibility of functioning as change agents and watchdogs of both government and private businesses, with the issue of workers welfare as priority.
“But, of late our desk has been inundated with industrial issues, ranging from redundancy complaints to anti-labour practices, casualisation of workers to outright termination of employment.’’
Kaigama lamented that the food and beverage sector had lost over 500 employees in the few months.
He said the naira exchanges for N197 to a dollar at the official window and N320 at the parallel market, adding that firms that borrowed dollar-denominated loans were facing the risk of foreclosure on assets.
The union chief demanded that the power distribution companies should stop sending estimated bills to Nigerians.
“They are defrauding consumers while the government consistently looks the other way; how else do we explain the fact that Nigerians are paying for services not rendered?
“We recall that the Minister of Power, Babatunde Fashola, prior to the 2015 elections said any government that cannot fix power in six months is irresponsible,” he said.
He said it was worrisome to labour that the lingering fuel scarcity appeared to defy all solutions in a country that is the sixth largest oil producer in the world.
Kaigama said Nigeria has become a laughing stock in the comity of nations, adding that man-hours lost in traffic because of long fuel queues were unimaginable.
“As it stands now, virtually all sectors of the economy are groaning in serious and unbearable pain.
“We are adverse to people blaming any particular political party for the ordeals of the country.
“The people voted for the Federal administration because they desire change. We need to see that change now,” he said.