The Nation Newspaper

Tag: Economy

  • Expert: Nigerians should train to help economy

    With the economic challenges in the country, Mr George Thorpe, Director of Studies, Market Space, a professional training centre, says it is time for Nigerian professionals to skill up and take advantage of opportunities to help the economy grow.

    Thorpe said at a briefing in Lagos that opportunities abound in areas of marketing and tourism management that Nigerians can build local capacity to deliver.

    He said the desire to empower professionals informed the Market Space partnership with the ABE (Association of Business Employers) United Kingdom, which offers qualifications and skills that it promises employers are of high standard and good enough to “make a difference in the workplace.”

    Market Space has been accredited by the ABE to provide training in Marketing Management (Levels 5 and 6) and Travel Toursim and Hospitality Management (Level 5) diplomas.

    A Level 5 ABE qualification is equivalent to Higher National Diploma (HND), second year of three- year Bachelors degree course; while Level 6 is equal to Bachelors Degree, Graduate Diploma.

    Thorpe said the rigorous curriculum of ABE programmes forced him out of retirement to contribute to quality manpower training in Nigeria.

    “When I saw ABE UK syllabus, I came out of retirement.  The training can contribute to the economy because the marketing space in Nigeria is becoming even more competitive.  believes companies to train their workers to be able to compete.  Any marketing officer worth his salt should partake in this training,” he said.

    Thorpe said Market Space is targeting executives seeking to improve their skills for the training  the reason why it is modeled to run on part-time basis.

    Centre Manager, Market Space, Mrs Edith Keshi-Robinson, said each programme would run for one intensive week each month for 14 weeks.

    Thorpe said his aim is to ensure that all students trained at the centre perform well in all assessments, which are written.  He said a testament to the rigour associated with the assessment process is that the scripts are sent physically to the UK for grading.

    “My target is to ensure that 80 per cent of students from this centre in Nigeria have at least a credit in each paper, he said.

    Mr Anthony Atagamen, ABE Regional Manager, West Africa, said the body, which is accredited by Ofqual, UK’s official qualifications regulatory body, is in talks with the Federal Ministry of Education, Abuja, as well as the National Universities Commission (NUC), which have endorsed its programmes in Nigeria.

     

  • Ex-governor to Buhari: declare emergency on economy

    Ex-governor to Buhari: declare emergency on economy

    A Former Governor of Cross River State, Mr. Clement Ebri, has urged President Muhammadu Buhari to declare a state of emergency on the economy.

    Ebri, who was governor of Cross River State from 1991 to 1993, said the proposed emergency, which should be backed by a law, would give the President powers to deal with the economic depression Nigeria is experiencing.

    Speaking with reporters in Calabar yesterday, he said: “Nigeria’s economy is facing an abnormal situation, and therefore requires abnormal solution.”

    He added: “The situation demands drastic measures, the President should declare a state of economic emergency on the nation, and strengthen it with a bill which should be passed into law by the National Assembly. We are not in ordinary times, the naira is losing its value on a daily basis and the nation’s economy is in a bad shape. An economic emergency will give the President powers to deal with the situation, thereby avoiding unnecessary encumbrances and bottlenecks that constituted stumbling blocks towards the efforts of the President at addressing the problems.”

    Ebri suggested the President should establish a National Economic Recovery Fund (NERF), backed by law, to mobilise funds from patriotic Nigerians for sustenance of the  economy.

    “This should be part of the National Emergency Bill to be placed before the National Assembly. The budget alone cannot fix the economic problems afflicting the nation. The emergency act will be best suited to address the economic challenges,” he said.

    He said an economy emergency law would give the President powers to explore other means, and recover looted funds from those indicted, without going through the lengthy process of litigation.

    Ebri, who has joined the All Progressives Congress(APC), noted that “in most cases the lengthy litigation ends up frustrating efforts at recovering loot tracked and located.”

    On the falling value of the naira against the dollar and other notable international currencies, Ebri said the Federal Government should adopt policies to address the scarcity of international currencies, especially the dollar.

    He suggested that the policy where the Central Bank of Nigeria (CBN) no longer sells dollars to the Bureau de Change should be reversed.

    He said the CBN should rather introduce periodic sale of the dollar to them, preferable twice a month, and monitor them.

    “The Federal Government should inject recovered funds into the economy. Instead of keeping the money in escrow accounts, they can be applied in ways that would address the scarcity of the dollar and other international currencies, thereby shoring up the value of the naira.

    “To avoid leakages, the recovered funds, and whatever they are used for should be properly documented and accounted for to avoid a situation where they will be looted by unpatriotic Nigerians  still in the system,” he said.

  • ‘Agro entrepreneurs good for economy’

    National Coordinator, Nigeria Agribusiness Group (NABG), Emmanuel Ijewere, said more agro entrepreneurs were needed to boost growth and employment.

    He spoke at the entrepreneurship forum organised by the Ikeja District Society of the Institute of Chartered Accountants of Nigeria (ICAN) in Lagos.

    Ijewere, who is the chairman, Best Foods, said the role of education and training in nurturing new generations of entrepreneurs could not be overemphasised.

    According to him, the group is making efforts to make agro entrepreneurship “an attractive and accessible prospect” for accountants, urging professionals to come up with new ideas and new ways of looking at entrepreneurship, taking advantage of opportunities within the agricultural value chain.

    If the potential within the sector is explored, he said thousands of new businesses could be added to the small and medium-sized enterprises sector.

    He argued that scaling up agribusiness could be the next growth frontier as it could offer immediate value addition that exploits forward and backward linkages with the rest of the economy.

    The potential growth of the food markets, he added, would only be possible with adequate investment in small and medium-sized agribusiness enterprises.

    He identified agro-processing as a sector with high growth potential, calling for more efforts to improve the efficiency of small processing units handling crops with efficiency.

    ICAN President, Otunba Olufemi Deru emphasised the need for the national education system to promote entrepreneurship as an appealing and viable alternative and prepare young people to take this career route.

    According to him, ICAN is putting entrepreneurship back at the top of the agenda as the nation faced crisis with dwindling oil revenue and growing unemployment.

    He said this would allow it to continue increasing investments in the people, which is crucial to national competitiveness and creating job opportunities.

  • Budget 2016 ‘ll fix economy, say accountants

    The Association of National Accountants of Nigeria (ANAN), yesterday praised President Muhammadu Buhari for designing the 2016 budget,  to, in its opinion, acheive sustainable growth of the  economy.

    The accountants therefore urged the Buhari to work his talks to diversify the economy, manage inflation, import substitution, export promotion and other creative ways to achieve overall macro-economic stability.

    Its President, Anthony Nzoma, who spoke in Ilorin, the Kwara State capital during the first session of the 2016 Mandatory Continuing Professional Development (MCPD), said the budget will  fulfill the change agenda of the Federal Government.

    He  said government’s effort at revamping the oil sector is a positive indicator for the economy.

    “This will enhance home-grown oil production capacity and reduce the volume of fuel importation. We also enjoin the government to curtail issues bordering on oil bunkering, damage of oil pipelines, spillage, illegal oil exportation and environmental concerns in oil producing areas.”

    On the war against insurgency, Nzoma said: “We enjoin the government to ensure the safety and rehabilitation of internally displaced persons (IDPs). Government should provide resources for our brave soldiers confronting the menace of terrorism on the war fronts. Government should consolidate on the victories by harnessing support from the international community as terrorism has become a global menace.

    “Robust safety precaution and enlightenment should be carried out in the country, especially in the Northeast; community radio stations should be set up in the zonebecause through this way, the message will get to the desired audience.”

    He urged all the ministers in the president’s cabinet to work assiduously to “preserve the commonwealth of the people, develop and implement ideas for the betterment of our dear nation.”

    He urged accountants to be in tune with the International Public Sector Accounting Standards (IPSAS), which is the latest trend in financial reporting. He said this will enable them to possess the leverage and expertise in the ever dynamic world of accountancy.

    “Accountants’ expertise in this aspect of financial reporting is highly encouraged in order to further ANAN’s goal of advancing the science of accountancy through the acquisition of requisite knowledge and skills to promote Nigeria’s status as a key player in the global economy,” he said.

  • Making non-oil export economy’s heartbeat

    Making non-oil export economy’s heartbeat

    Can the Export Rediscounting and Refinancing Facility (ERRF) and the Non-Export Stimulation Facility (NESF) achieve their aims? Yes, they can, argue  experts, who note that the programmes can boost non-oil export and facilitate diversification of the economy, if properly driven by the government. Assistant Editor CHIKODI OKEREOCHA reports.

    They are coming at an auspicious time. The  Export Rediscounting and Refinancing Facility (RRF) and Non-oil Export Stimulation Facility (ESF) designed to stimulate non-oil export are coming when the economy is, perhaps, at its most vulnerable ever. They are coming in the heat of the crisis in the international oil market where the price of crude has been crashing, requiring urgent rejuvenation of the non-oil export sector as a wedge.

    Nigeria depends on oil for 70 per  cent and 95 per cent of her revenue and foreign exchange earnings. But global oil prices have been tumbling since June 2014, putting the finances of Africa’s largest economy/oil producer under severe pressure. From over $120 per barrel in December 2013, oil price nose-dived to around $60 per barrel in December 2014. By December 2015 and January 2016, oil price crashed to as low as $32 per barrel and $27 per barrel, respectively.

    Although, oil price went up slightly above  $30 per barrel, Tuesday this week, the unprecedented fall in oil prices necessitated strident calls on the Federal Government to speed up the development of the non-oil sector and the diversification of the economy to mitigate the impacts made worse by over-dependence on proceeds from crude oil. The new export financing programmes are therefore, seen as indication that the Federal Government may have finally seen the wisdom in reducing the country’s over reliance on export of crude oil as a major source of revenue, which price is prone to volatility.

    The Federal Government through the Central Bank of Nigeria (CBN) said last week that it has designed two export financing programmes known as RRF and ESF to improve non-oil export in the country and achieve total diversification of the economy. The move is seen by not a few experts and stakeholders as a short in the arm of real sector operators especially those in the non-oil export business,

    CBN Governor Godwin Emefiele, who made the initiative known in Abuja at the non-oil exports stimulation conference organised by the apex bank and the Nigerian Export-Import Bank (NEXIM), said the CBN and NEXIM came up with the initiative to encourage exporters expand their businesses as well as provide a pool of funds for commercial banks to enable them support exporters.

    According to Emefiele, credit to the non-oil export sector is currently in the decline, constituting a paltry 0.6 per cent of total domestic credit to the private sector in the past five years, while domestic credit to the economy has been on the rise. He blamed low level of export loans for being largely responsible for the decline in non-oil export revenue receipts from $10.53 billion in 2014 to $4.39 dollars in 2015.

    “The impact of these developments on the country’s export growth potentials is quite significant and has become instructive for stakeholders to dialogue on strategies to expand resources for export,” the CBN boss said, adding that the decline also limited the sector’s contribution to foreign reserve accretion.

    Emefiele said volatility in the international oil market s necessitated the renewed focus on non-oil exports as panacea to the nation’s dwindling foreign reserves. He noted that a rejuvenated non-oil export would stimulate economic growth and development, address the challenges of unemployment and target economic rebirth through the diversification of the Nigerian economy.

    At the conference themed ‘Strategies for Growing Nigeria’s Non-Oil Exports,’ Emefiele pledged that CBN will continue to play a catalyst role in improving export and encouraging local production through collaboration with the Ministry of Agriculture.

    Throwing  more light on the new facilities’ NEXIM Managing Director, Mr. Robert Orya, said the funds would be provided to all banks that lend to the export sector and that the banks would be mandated to give loans to exporters at nine per cent maximum. “If a commercial bank gives you a loan to say that you will return it in a year, the bank will not have money to loan out until you return that money.

    “But this window is such that as soon as this money is given to you, they will bring the credit papers and we refinance and give them the same money that they have given you, so they can give to another person. As soon as they finish disbursing to that person, they will bring the credit papers to us again and we will be able to refinance,” he explained.

    Orya emphasised that the facility is to encourage banks to lend by providing liquidity for them and to also enable them give the non oil facility at a moderated rate. He also said CBN and NEXIM would soon meet to finalise on the quantum of funds to be provided for the facilities and also the modalities for the disbursement.

    At the conference, which attracted about 400 participants across all stakeholders in the non-oil sector, the NEXIM MD said the funding would also aid exporters to improve on quality standards, packaging issues, export productions and operational challenges.

    Indeed, lack of quality control measures has been one of the greatest pains in the neck of exporters, which was why CBN’s latest intervention is music in their ears. “Quality is number one. It is the first thing that ought to be considered as the nation focuses on building a robust export-based economy,” the National President, Association of Systems Management Consultants, Mazi Coleman Obasi, said.

    While describing the initiative as a welcome development, the certified Quality Management Practitioner told The Nation that there is need for the authorities to speed up the adoption of the draft document for the proposed National Quality Policy (NQP) for Nigeria. He wondered why the formulation and subsequent adoption of the document is being delayed despite the fact that the European Union (EU) made available 12 million Euros about two years for the establishment of a National Accreditation System in Nigeria.

    He said the fund was supposed to support the enhancement of the national quality infrastructure, with a view to improving the quality, safety, integrity, and marketability of made in Nigeria goods and services. According to him, the intervention by the EU and other international technical partners was to increase the competitiveness of locally made products at the international market place.

    Under the EU-funded National Quality Infrastructure (NQI) project, implemented by the United Nations Industrial Development (UNIDO), with the support of the Federal Ministry of Industry, Trade and Investment, the objective was to improve the quality of products made in Nigeria so that they can be sold internally and in the international market. It was supposed to help develop a National Metrology Institute (NMI) to ensure that instruments are of international standards, improve the capacity of members of the Organised Private Sector (OPS) to conform to standards.

    The initiative, which was expected to produce a legislation that will contain a NQP and establish an internationally recognized National Accreditation Body (NAB) that will vet the activities of regulatory agencies such as the Standards Organisation of Nigeria (SON) and the National Agency for Foods, Drugs Administration and Control (NAFDAC).

    It will also establish conformity assessment bodies as well as enhance the powers of the Consumer Protection Council (CPC) and other consumer organisations to sensitize consumers on quality standards, and ensure improved consumer protection. But these have so far not happened. Yet, experts say that the creation of these key systems and institutions are supposed to boost the competitiveness of locally made products at the international market place and ensure the global acceptance of products and services from Nigeria.

    Failure by exporters to comply with specified standards is said to be responsible for mass rejection of non-oil exports from Nigeria at entry points in many countries in Europe. The Nation learnt that the rejected exports are mostly in the food and beverage segment where items such as beans, sesame seeds, melon seeds, fried fish, meat, peanut chips and palm oil are said to have been banned from entering Europe till June 2016.

    Non-oil products such as cocoa and cashew nuts were also rejected in many other countries, not only in Europe, with the importing countries citing  exporters’ inability to adhere to global standards, poor packaging, and high level of chemicals, poor labeling, insufficient information on nutritional content, and presence of high level of pesticide residue and presence of Mycotoxins.

    While admitting that lack of quality control measures remains a major hurdle on Nigeria’s quest to ride on the back of a robust non-oil export sector to grow and diversify the economy, the Chairman, Export Group, Lagos Chamber of Commerce and Industry (LCCI), Mr. Obiora Madu, identified other challenges facing non-oil exporters to include lack of incentives, logistics/infrastructure deficiency, and high cost of doing business.

    The Director General, Nigerian Economic Summit Group (NESG), Mr. Laoye Jaiyeola, said although policies to address the constraints of the non-oil sector abound, there is need to harmonise and properly implement them to ensure that they work. “People want to invest in the non-oil export sector, but our institutions and infrastructure must be right, our monetary policies must be consistent and macro economy level stable. But we scare them when we say one thing today and another tomorrow,” he said.

    Jaiyeola said the non-oil sector was fundamental to economic diversification, rapid revenue base expansion, sustainable growth and employment generation. He therefore, advised government to harmonise its non-oil export stimulation policies and ensure consistency in the administration of intervention funds to non-oil exporters.

    The Federal Government’s RRF and ESF are additions to previous policy interventions aimed at giving impetus to the emphasis on the non-oil sector in the face of the economic downturn caused by plunging oil prices. Recall that last year, the Federal Government gave vent to its push for economic diversification when it listing 13 National Strategic Export Products (NSEP) to replace oil. The 13 NSEP were listed in three categories including; agro-industrial- palm oil, cocoa, cashew, sugar and rice); mining related- cement, iron ore/metals, auto parts/cars, aluminium and oil and gas industrial products- petroleum products, fertilizer/urea, petrochemical and methanol.

    The former Minister of Industry, Trade and Investment, Dr. Olusegun Aganga, said then that Nigeria could no longer continue to be an import-dependent country. According to him, the nation was wasting its foreign reserves on imported products most of which can be produced locally.

    The Executive Director of Nigerian Exports Promotion Council (NEPC), Mr. Olusegun Awolowo, also said NEPC under his leadership had long recognised the need to develop the non-oil export sub-sector and had in the process held series of strategic meetings with stakeholders for the development of ideas aimed at improving the foreign exchange earnings by Nigeria through different avenues.

    These, he said, include the development of a 4-year Strategic Plan, One State One Product (OSOP), Nigerian Diaspora Export Programme (NDEX) and the development of new markets for new products. But as highly commendable as govern-ment’s moves to diversify the economy by riding on the back of non-oil export are, the political will to carry such policies to their logical conclusion remains the challenge.

    While real sector operators have thrown their weight behind the emphasis on non-oil economy, insisting that it is more inclusive, growth-oriented and characterized by high economic linkages and more sustainable, the consensus is that the success of the latest initiative, like previous ones, depends on the extent government demonstrates political will to carry them through.

  • DMO ‘ll rescue economy from meltdown, say Reps

    DMO ‘ll rescue economy from meltdown, say Reps

    Members of the House of Representatives Committee on Aids, Loans and Debt Management, has said that it is only through the instrumentalities of the Debt Management Office (DMO) that Nigeria can carefully come out of the looming economic crisis.

    The Chairman of the Committee, Honourable Adeyinka Ajayi, who yesterday led members of the committee on a familiarisation visit to the DMO said that the debt office was the engine room of the nation’s economy that was always expected to come up with sustainable debt management models for the overall prosperity of the country.

    “While acknowledging the crucial role the DMO has continued to play in the management of the country’s economy, this visit is significant and historic. The DMO is the engine room of the Nigerian Economy whose initiatives have often prevented the economy from going into recession”, Hon. Ajayi said.

    He noted that with the current stiff challenges facing the country as a result of the sharp decline in revenues from the sale of crude oil, the DMO is once again, expected to play a pivotal role in the effort to steer the economy out of trouble.

    The Director-General of DMO, Dr. Abraham Nwankwo praised the Chairman and members of the Committee for the special favour of coming to be with” them and expressed the DMO’s appreciation of the invaluable support and deep collaboration it has always enjoyed from the Committee.

    He said the D-G taken the DMO through turbulent times in the nation’s recent economic experience.

    Speaking on the theme: ‘Brief on the Mandate and Activities of the Debt Management Office’ Dr. Nwankwo recounted the background to the establishment of the DMO and outlined the milestones achieved by the Office since its inception.

    He reviewed the successes recorded by the debt office in revamping the hitherto moribund Domestic Debt Market and the successful launch of the Nigerian flag in the International Capital Market with its debut 500 million USD Eurobond issuance in 2011 and subsequent issuances in 2013 to raise funds towards financing the deficits in the national budget.

    Dr. Nwankwo said the DMO assisted the 36 States of the Federation and the FCT to establish their own Debt Management Departments (DMDs) and the fiscal stabilisation intervention of the DMO which led to the restructuring of the debts owed to banks by some States into long tenured bonds.

  • Expert advises government to grow economy

    A lecturer in the Department of Mechanical Engineering, College of Engineering of the Federal University of Agriculture, Abeokuta, Ogun State Dr. Olayide Adetunji, has called on the government to support ideas and knowledge that would grow the economy.

    Adetunji made the call while speaking on a maize-shelling machine, fabricated by him, through the postgraduate diploma project supervision, which involved the design, construction and performance evaluation in the university during the 2012/2013 academic session.

    He said  the machine was designed to bridge the gap between the highly expensive threshing machine and manual method of hand-shelling, to aid food production and improve farmers’ productivity and profitability, emphasising that the machine was meant for local farmers for personal use on farm settlements and for group of farmers in the form of cooperatives, market-women and house-wives as a means of generating income.

    Adetunji noted that the production cost of the machine was over N100,000 because the materials used in its production were sourced locally, but when commercialised, the cost price could go for about N200,000. Describing the mode of operation of the machine, he said, if well maintained, it could be guaranteed for about two to three years by working efficiently without any fault and could last for about 50 years. He stated that the dual-powered machine uses both fuel and electricity, because most of the people that use it are rural dwellers, so they do not have to worry about electricity.

    When asked about the number of the machines produced so far, he said it is “just the prototype that is available,” stressing that finance had been a major problem in exhibiting the machine and that the machine had been nominated for the African Prize for Young Engineers Research.

    He added that COLENG was planning a conference, where the machine would be showcased, saying “we are also looking forward to the Exibition Day. On his future plans, Adetunji said he plans to construct different types of machines like palm-oil extracting machine, rice milling machine, palm-kernel and fruit juice extracting machine, and block-making machines, as he looks forward to partnering with professional bodies like the Small and Medium Enterprise Development Agency of Nigeria (SMEDAN), Manufacturers’ Association of Nigeria (MAN) and the Bank of Industry (BoI).

  • Dollar scarcity creates pressure on Naira – Expert

    Dollar scarcity creates pressure on Naira – Expert

    Ifeanyi Duaka (Ph.D) is the Chief Finance Officer of Lekki Gardens. In a chat with our reporter, BLESSING OLISA he advised on the way forward for the economy.

    At the moment the Naira has been terribly devalued. What do you think is the cause?

    Devaluation of naira is a function of demand and supply. Nigeria is an importing nation that needs dollar reserves to support her import needs. Statistics has it that Nigeria trade imports average of $43billion dollars. Dollars accruing to Nigeria is mainly from oil proceeds. So, as world oil price declines, our reserves keep depleting. CBN starts having challenges in meeting up with dollar needs for importation. The scarcity of dollars creates pressure on the naira as importers become desperate to get dollars to meet their import needs. This pressure creates gap between official exchange rate and that of the parallel market. The trend forcefully resulted in devaluation whether deliberately implemented by the government or market forces of demand and supply. Devaluation of currency has three key merits: (1) It will boost export (2) It will shrink trade deficit (3) It reduces sovereign burden. But because we are an import-driven economy, devaluation tends to be at our disadvantage, making it difficult to benefit from the advantages. Having said that, it is pertinent for Nigeria to focus more on ensuring that the economy becomes export-driven as against the present import-based. Currently our export commodities are facing price decline just as we lack necessary credit stimulus to increase exports. This needs to be addressed as a matter of urgency.

     What is your stand on the inconsistency in the CBN monetary policy and what effect do you think it has on the economy?

    The seemingly inconsistency in CBN policy is due to the drive to save naira from devaluation and preserve our foreign reserves. So, policy is being released in piece meal as reserves of CBN keeps nose-diving southward and widening the gap between the official exchange rate and the parallel market . I expect CBN to have taken a holistic approach in resolving our depleting reserves and currency management so as not to send wrong signals to the investors. The piece meal approach has created a “sit-and-watch” attitude in the investors. The piece meal policy approach has affected the economy negatively by increasing  unemployment, pressurising more companies to close down  due to non-availability of forex, continuous capital flight  as investors are not sure of CBN’s next policy direction, rise in inflation as costs of manufacturing and import continue to increase, drop in purchasing power of consumers as unemployment increases. Besides, there is increased default in bank loans as capacity to pay is in doubt; restriction of cash spending as consumers hold back due to uncertainty. Suffice it to state that economic challenges are not peculiar to Nigeria as the world is now a global village. So, there are always external factors apart from those internally created. To provide a holistic approach, I expect the CBN governor to expand the number of MPC to include past CBN governors and finance ministers with a view to creating a robust solution in solving our economic challenges. The expanded MPC should focus on driving policies that will support non oil exports in the short, medium and long term. A quick win was the effort made by the immediate past administration on National automobile policy; an agreement was signed by foreign automobile investors to assemble and manufacture cars in Nigeria including our local automobile manufacturing companies. CBN should take a critical look at credit guarantee scheme for SMEs, propose Timely Payment Bill for SMEs in the National Assembly, revisit the 10% profit of Banks which are statutorily meant for investment in the SMEs and explore possible direct intervention into manufacturing companies that will create jobs and exports.

    What do you think is the way out of Nigeria’s current economic crisis, because right now it seems the government doesn’t have the answers?

    No doubt, the desired changes expected by Nigerians cannot happen overnight but all the necessary change indices must be in place. We see a government that cannot multi-task in her approach in providing the proclaimed change. The approach of addressing corruption by this administration through the media trials of individuals who were alleged to have stolen public funds and pushing for subsequent court trial, may not yield the desired result expected by government. My thoughts is that government  should take a critical look at the entity called Nigeria with a view to determining key areas that will drive the economy and impact on the masses. Such as (1) Promote bills through national assembly to support key critical reforms (2) Develop budget that will be a clear departure from what it used to be where recurrent expenditure takes (75-90)% and capital project takes (10-25)%. The sweeping reverse is that capital project should take not less than 70% while recurrent takes 30% of the total budget. The implication of this is that there will be a serious downsizing in the public sector but here is the catch: (a) come up with special payout package for those that are willing to input entrepreneurship (b) for those that are close to retirement age, come up with special investment package that will guarantee monthly payment aside their regular pension for one year (c) come up with tax incentive package for any private sector that will absorb the staff of the affected public sector.  Then, the funding of capital project that are self-revenue generation should be funded by debt while the shortfall and recurring expenditure shall be funded with revenue generated from non oil revenue. Government should also focus on export-oriented sectors while energy subsidy, despite its effect on the overall economy, is necessary in the medium term in order to increase competitive capabilities of export-oriented sector. It is equally pertinent for the government to ensure efficient regulation and removal of trade barriers. Moreover, government should create policies that will attract foreign direct investment while efforts to improve on the ease of doing business in Nigeria should be strengthened. However, this does not stop the government from carrying out its anti-corruption campaign within the ambit of the rule of law.

    Do you think the 2016 budget is realistic and capable of addressing some of the growing economic issues?

    If the truth be told, there is no difference between the 2015 budget and 2016 budget. So, for me, the magic lies in the implementation and reliability of the funding strategy. The revenue to be generated to fund 2016 budget is about N3.78trillion while that of 2015 is N3.602 trillion. Note that non-oil revenue for 2015 budget is N1.684 trillion while that of 2016 is N1.45trillion. Expected source of funds from non-oil revenue is not reliable as it is based on recovery and tightening of loose ends in the MDAs There is no numerical statistics backing it up and no past reference. With the further dwindling of oil price which is below bench mark of $38, the funding gap has increased.

    How do you think the Nigerian government can finance the infrastructure currently available, so that even the private sector and small businesses can benefit from them?

    There are some key infrastructural projects on which the last administration has opened up discussion with some financial institutions and China. The projects areas also included clean energy technology worth $100m, East-west Road at the cost of $800m, Mambila Hydro electric power amounted to $4.8bn and coastal rail project estimated at $12bn. All these projects were proposed to be funded through long term concessional borrowing. The targeted financiers were World Bank, African Development Bank, Islamic Development Bank (IDB) and Chinese Exim bank. For internal borrowing, infrastructure funding can be raised from our pension funds but all projects must be able to pay for themselves. The same approach could still be adopted by the present administration for the new infrastructural facilities to be embarked upon although not to the detriment of the infrastructural projects started by the past administration.

     

    Proceeds from oil have drastically reduced. What other sources of revenue do you think are available, and how can Nigeria harness them in order to finance the economy.

    Like I said earlier, government should harness policies of the last administration on automobile industry and support the export sector through credit financing to the sector and policies that will encourage foreign direct investment and needed technology. Our agricultural products should be used as input for our own home-made products so that we can export finished products instead of raw materials which attract low pricing globally. Selling off government strategic assets with IOC to raise fund for infrastructural projects is also a good idea. Government should focus on creating an enabling environment for private sector to thrive.  We should think of gradually changing our NYSC scheme to become one year programme for corps members to work at mechanized farms owned by state and federal government across the 36 states of the federation including the FCT and also be posted to SMEs for support growth.

    What other opportunities abound for Small scale business since oil is on a downward spiral, and how do you think SMEs can thrive in this economy

    There is no gain saying that past governments in Nigeria have made conscious efforts to drive the economy through SMEs but their efforts did not yield any significant changes. The advanced economies have all leveraged on the strength of their Small and Medium-Scaled Enterprise (SME) sector. The success recorded by SMEs in countries like Brazil and India launched them among the BRICS countries (Brazil, Russia, India, China and South Africa). Meanwhile Indonesia and Bangladesh are identified among the Next Eleven (N-11) countries as a result of their vibrant microfinance banking systems. Although Nigeria was listed as one of the N-11, we still have serious challenges using microfinance to support SMEs’ growth. Statistics has it that micro, small and medium enterprises (MSMEs) contribute 46% to the Nigeria’s GDP.

    The 2010 survey carried out by the Bureau of Statistics across the 36 states including the Federal Capital Territory reveals that Nigeria has 17.28 million MSMEs out of which 17.26million is micro enterprise, this generated 32.8million jobs. The figure continues to increase but with the challenge of early death of many of them. It is very possible to use SME sector as a driver to economic growth and employment generation. China has positioned its economy as one of the largest in the world using SMEs and it is the same story with America. China focuses on manufacturing industries while America focuses on service industries.

    Quickly let me identify challenges of SMEs in Nigeria despite various government efforts.

    • Access to fund by the operators
    • Multiple taxation
    • Weak infrastructure
    • Inconsistent government policies
    • Very weak export products
    • Age brackets of SMEs entrepreneur
    • Obsolete technologies
    • Absence of database
    • Perpetual delay in payment of SMEs by large corporate bodies

    I am aware we have national council for SMEs, SMEDAN, National MSME policy and various CBN efforts in putting up specialized funds, agricultural credit guarantee schemes and priority lending to mention but a few. All these strategies and efforts are not out of place, the key issue here is consistency in implementation as government changes hands. The missing link is positioning the SMEs sector as cash provider for government spending like crude oil and lack of holistic approach in solving the SMEs various challenges. I believe that as a first step to depart from our current solution approach, the government must pass the SME payment bill among others that will serve as building blocks in creating an SME-driven economy, which I otherwise refer to as profitable and working economy.

     

  • FG gives FIRS marching orders to meet N4.9tr target

    FG gives FIRS marching orders to meet N4.9tr target

    The Federal government has turned on the heat on the Federal Inland Revenue Service, (FIRS) to meet the N4.957 trillion tax target for 2016.

    A statement from the FIRS signed by Wahab Gbadamosi, Head, Communication and Servicom Department said the minister of finance, Mrs. Kemi Adeosun, handed out the marching order Wednesday in Abuja at the second day of the 2016 Annual Corporate Strategy Retreat of the FIRS.

    The finance minister was said to have categorically warned the FIRS that “there is no room for failure over FIRS’s attainment of its 2016 target of N4.97 trillion to the Federal Government.”

    According to the finance minister, “there is really no room for failure. Please ensure you deliver. The nation will depend on FIRS to fund the budget. We need the money to stabilise the economy.”

    She told staff of the FIRS that “this is not a joke. We need everybody to do his/her beat to ensure that everybody contributes to the achievement of the target. I look forward to the excellent ideas that will improve revenue generation as you proceed in this retreat.”

    Adeosun further told the FIRS staff that “in addition to your professional pride, and the satisfaction you may derive from working for FIRS as a professional, please note that you are also building the nation by realising the target and by being professional, honest and dedicated in the way you do your work. This is what the nation needs now.”

    She acknowledged the strides the FIRS has made in the past and the successes it had attained since its new Chairman, Tunde Fowler resumed. “I know your chairman as an achiever. He did very well in Lagos. Work with him. He will do well here. He is one person who has the welfare of staff on his mind.”

    In his address, the Executive Chairman of the FIRS, Mr Tunde Fowler said, the Service is collaborating with State Governments, tax consultants, major audit firms, stakeholders in the federal system, including the National Assembly.

    He said the tax agency is undertaking a nationwide Value Added Tax and Witholding Tax Monitoring exercise and nationwide taxpayer registration exercise anchored by the FIRS Federal Engagement and Enlightenment Tax Teams, (FEETT).

  • ICT’ll rescue economy, says minister

    ICT’ll rescue economy, says minister

    Minister of Communications Adebayo Shittu said in Ibadan on Sunday that Information and Communication Technology (ICT) will rescue the country from economic doldrums.

    He said: “Eritrea, Uganda, and Rwanda are making progress in ICT, may be because they do not have petrol. I think our petrol became a bane for us and it has affected our progress. I have met with the ambassador of Rwanda and he told me a lot on how to use ICT to turn our economy around. We shall make use of their achievements to build our own.

    “The challenge is real now because what Nigeria is realising before on crude oil has reduced by over 70 per cent, petrol has failed us, agriculture will take a much longer time to mature, and that is why I have always argued that ICT is the way alternative we can bank on to improve our economy.”

    He assured Nigerians that the Federal Government would make ICT lucrative.

    “ICT is one thing that affects every Nigerian, because of 178 million Nigerians, 150 million have keyed into it. So if you make facilities of communication easier for them, the more they become interested, obsessed, the more it will make money for the country,” he said.