The Nation Newspaper

Tag: Economy

  • Economy : Tougher times ahead for local manufacturers, SMEs

    Economy : Tougher times ahead for local manufacturers, SMEs

    The prevailing macro-economic indicators point to an economy in distress.  No thanks to rising inflation rate; worsening unemployment; declining economic growth and a weakened manufacturing base. But, experts say the situation is redeemable if local manufacturers are provided with necessary incentives. Assistant Editor CHIKODI OKEREOCHA writes that the promotion of export could be the wedge to avert a looming catastrophe. 

    THESE are not the best of times for the economy. No thanks to the ripple effects of tumbling  prices of oil at the international market. The effects – dwindling national revenue and the falling value of the local currency – continue to hit the economy, and by extension, Nigerians, at the most vulnerable points.

    The prevailing macro-economic indicators point to an economy irretrievably headed for more troubles in days ahaed. Last month, inflation rate soared to 9.4 per cent from 9.3 per cent in August. It was the highest inflation rate in two years,  a National Bureau of Statistics (NBS) report said.

    There are fears that the rate may be inching to double digit by next quarter. Such fears, The Nation learnt, arose from the fact that at 9.4 per cent, headline inflation rate, has moved further away from the Central Bank of Nigeria (CBN’s) six to nine per cent target band.

    Expectedly, the rising inflation  has triggered an unprecedented surge in the prices of food items.  Despite the much-touted ‘healthy growth’ of the economy under the immediate past administration, which the government argued was averaging almost seven per cent, many Nigerians can barely afford a balanced diet of three square meal daily. Unemployment has also risen alongside the increased incidence of poverty.

    A recent World Bank report has classified Nigeria, with about 170 million people, among countries with extreme poverty. The bank says more than 70 per cent of Nigeria’s population lives on $1.25 (abot N250) or even less per day.  Specifically, the report revealed that seven per cent of the 1.2 billion people living below poverty line in the world are Nigerians. An increasing number of Nigerians are said to be daily losing their access to basic social and public infrastructure; potable water, sanitation and healthcare.

    The economic growth rate has been on the decline , a development, which experts identify as a direct consequence of falling oil prices and subsequent depreciation of the naira.  The economy, which recorded a Gross Domestic Product (GDP) growth of 6.54 per cent in the second quarter of last year, has dropped to 2.35 per cent this year, the NBS said. The 2.35 per cent GDP growth recorded in the second quarter of this year, marked the second quarter in a row that the economy will record a GDP below its anticipated performance.  According to experts’ interpretation, an average Nigerian is getting poorer when a 2.35 per cent growth is recorded at a time the population growth is close to 2.85 per cent.

    The final projection for the year, according to the Bureau, is expected to be 2.63 per cent, compared to last year’s 6.22 per cent. The projection is less than half of the budgeted growth rate.

    Industry watchers are worried that the third quarter has ended without any visible economic stimulus to raise the GDP growth from the abysmal 2.35 per cent recorded in the second quarter.  They argue the focus of the President Muhammadu Buhari led-administration has been more on the fight against corruption and Boko Haram insurgency.

    “The economy has been in its lowest ebb because President Buhari is focusing on the fight against corruption, which has been with us for a very long time,” the Registrar/Chief Executive Officer of the Institute of Business Development (IBD), Mr. Paul Ikele, observed. According to him, the economy should run alongside the anti-corruption war.

    Describing the anti-graft battle as a welcome development, the IBD chief told The Nation that the government has been dissipating much of its energy on the crusade to the detriment of the economy. He urged the administration to come up with people-oriented programmes and policies that would stimulate the economy and starve off the likely catastrophe that may follow the oil prices crash.

     “The local currency, the naira is still losing value. Unemployment is rising dangerously. Manufacturers are either closing shops or putting their expansion programmes on hold due to rising production cost that has in turn triggered infrastructure challenges, particularly power,” he said.

    Ikele, who spoke of the need to encourage local manufacturers and upgrade decaying infrastructure, has an ally in Nesbet Consulting’s Managing Director Alaba Olusemore.

    Dr. Olusemore said there cannot be any other auspicious time to encourage local manufacturers with incentives than now. A  fellow of the Chartered Institute of Bankers of Nigeria (CIBN), Olusemore told The Nation that Nigerians should not expect any miracle on the economy, less than three months to the end of the year.

    He predicted that the economy and Nigerians may find it difficult to heave a sigh of relief until the second quarter of next year when the Federal Executive Council (NEC) would have settled for a policy direction.

    His words:  “We may not see any major improvement in the economy before the end of this year. The second quarter of 2016 is more to it. The fight against Boko Haram insurgents and the renewed war against corruption seem to have diverted the attention of the present administration from manufacturing and agriculture – two critical sectors that will  put the economy on a quickly recovery path.”

    The renowned economist and finance analyst urged the government to initiate aggressive and deliberate policies to wean the economy of its over-dependence on oil in the interim, pending the inauguration of the FEC and the assigning of portfolios to ministers.

    Olusemore said: “The monolithic nature of the economy is unsustainable. We must immediately begin to initiate and sustain policies directed at economic diversification. And in doing so, we must look at manufacturing and agriculture, which have the potential to create employment opportunities.”

    According to him, the Small and Medium Enterprises (SMEs), which can turn around the fortunes of the economy, must be encouraged to thrive.

    This, he said, could be done by providing operators with consultants and mentors, who would assist them to develop bankable business plans and proposals.

    Some analysts have projected that respite might not come for the economy until the third quarter of next year.

    A banker, who pleaded for anonymity, said the measures designed to prevent the economy from sliding into recession require ample time to show results. The banker said some of the measures, especially those pertaining to infrastructure development and the expansion of the manufacturing base; require huge investments, which cannot be mobilised locally, at least, now.

    “This is true considering the fact that the crash in crude oil prices by more than 40 per cent in the past year has not only put tremendous pressure on the naira, but also cut government revenue, resulting in huge borrowing,” the banker said.

    The country’s debt profile has been climbing. According to a report by the Debt Management Office (DMO), Nigeria’s domestic debt has hit N11 trillion; external debt ($11 billion). However, DMO’s Director-General, Dr. Abraham Nwankwo, said the huge debts remain sustainable. He spoke at a function in Kaduna.

    “I want to assure you that Nigeria’s debt remains sustainable,” he said, noting that the size of the debt was not as important the resources deployed to stimulate economic growth, development, generate employment and reduce poverty.

    Nwankwo, who noted that the current global economic problems, particularly the oil prices fall, have significant impact on economies all over the world, said the Nigerian economy “is very resilient and because the government is in control, the debts continue to remained sustainable.”

    He went on: “Nigerians should be proud that they have a government, a sound Central Bank and an economic system, despite the oil prices shock.”

    He DMO chief hailed the Federal Government and the CBN for maintaining a healthy reserve and for

    stabilising the exchange rate despite the shock occasioned by the drastic drop in oil revenue.

    CBN policies under scrutiny

     

    But, Nwankwo’s assurances of a sound economic system, propelled by the apex bank’s policies may not have swayed Nigerians.

    For instance, the Treasury Single Account (TSA) policy introduced by the Federal Government has triggered liquidity crisis in the banking sector. The interest rates are also soaring, forcing investments to ebb. Foreign investors have been divesting from the Nigerian Stock Exchange (NSE), with experts expressing the fear that prices of crude oil may remain low throughout next year.

    But, the greatest fear is from organised labour. Bank employees are jittery that the policy could lead to rationalisation due t depletion of liquidity following the implementation of the Federal Government’s directive that all Ministries Departments and Agencies (MDA’s) must remit all revenues into the TSA.

    In compliance with the directive, the MDAs rushed to beat the September 15 deadline to move N1.2 trillion ($60 billion) out of commercial banks to the CBN. About 20,000 accounts were closed as a result of the policy. The effect of such huge transfer was instant.

    The balances of commercial banks with the CBN, usually earmarked for foreign exchange or bond purchases, plunged from N73 billion to N4.86 billion.  The banks are already facing liquidity problem, a development that forced inter-bank money market to halt trading for three consecutive days.

    President Buhari introduced the TSA idea to stem corruption and aid transparency in government business.

  • ‘Build an economy that thrives on skills,’ Fashola urges

    Immediate past governor of Lagos State, Babatunde Fashola (SAN), has appealed to government to build an economy that thrives on productivity, based on skill and entrepreneurial ability of youths. He insists that the status of those who get their hands dirty to eke a living must be elevated.

    Fashola made this call at the second annual graduation of Skillup TVET Limited.

    Skillup TVET Limited is a technical skill competency development initiative. It is an offshoot of  a construction outfit.

    Fashola spoke on: ‘Beyond skills training: Innovation for economic inclusion and sustainable development.’

    The ceremony was combined with the launch of SkillUp Innovation and Incubation Centre (SIIC) which will help provide funds for scholarships for prospective students who cannot afford it.

    Fashola, who was represented by Mrs Olusola Oworu, the state Commissioner of Commerce and Industry under the former governor’s administration, advised the graduands to be masters in their chosen fields

    Fashola described their skills as productive rather than menial.

    “Be the new master bakers, master mechanics, master plumbers, master tailors that represent the new Nigeria…,” he said.

    “Indeed the world is not menial, it is productive. It is the sum total of our wealth and national gross domestic product (GDP) and also the defining line in our national balance sheet,” Fashola added.

    The former governor challenged the graduands to rise above inferiority complex, saying those who produce nothing cannot lay claim to contributing to nation building.

    In his speech, Chief Executive Officer (CEO) of the academy Mr Afolabi Imoukhuede, said he is happy that what started so small    has grown to the extent of being acknowledged  by the City and Guilds of London, a professional entrepreneurship certification .

    He said the academy had been given the permission to use their curriculum and partake in their examination.

    Imoukhuede recalled how he was inspired to start the academy, owing to none or less capable and competent artisans to handle the firm’s menial jobs while constructing.

    He said: “Construction companies had to rely on expatriates to do their menial jobs for them. In this case, there were lots of vacancies but less competent and capable hands to fill them”

    Imoukhuede lamented the financial constraint of the academy, adding that it is only graduating 100 when it has the capacity to train over 1000 students at a time.

    He said: “We need more funding so that we can support and train more people. Today only 113 students are graduating when we have capacity to train 1000 students, but the funding is not there to take this capacity.”

    Renowned speaker, Adebola Wiliams, advised the graduands to chase success and never relent on being the best and master in whatever paths they have chosen to earn a living

    Executive Director Lagos State Technical and Vocational Education Board (LASTVEB), Olawunmi Gasper, condemned the society for looking down on artisans. He cautioned against calling them failures when they cannot do any of the things artisans do to help humanity and save the society.

    Gasper said: “It is only in this country that we respect those who wear tie and look down on others. Nobody can take each other’s relevance. Artisans have to be given a chance. Also, parents and the society are at fault, as they have negative perception about those who do menial jobs and label them failures. But you cannot fix my car or plumbing, only they can.”

    The best graduating student and youngest graduand in the 2015 class, Eric Ogbugo, advised other youths to concentrate on their studies.

    The 16-year-old Rivers State trainee, who majored in Metal Machine, said aside taking  the programme seriously, he had passion for the profession.

  • Buhari not to blame for Nigeria’s woes, says Yari

    Buhari not to blame for Nigeria’s woes, says Yari

    Chairman of the Nigeria Governors’ Forum (NGF) and Zamfara State Governor, Abdulaziz Yari at the weekend declared that President Muhammadu Buhari cannot be blamed for the present woes the country has found itself.

    According to him, what Nigeria is going through is partly a reflection of the global economy, which adversely affected the international prices of oil.

    Despite the drop in prices of oil, he said that President Buhari has done well in managing the Nigeria economy in past five months.

    The governor, who spoke with journalists in Abuja, said that only Nigerians who were aggrieved because of ministerial nomination and other appointments could be unhappy with Buhari.

    He said: “They all should understand how Buhari emerged as president and the situation he met on ground on the issue of economy which is the global issue. Despite the fact that the global leaders are trying, to mention economic recession, but there is bad signal and they are managing it at the top level but in the actual sense, this recess we are in now is more than that of 2008 because China is experiencing very slow production, Brazil, Argentina.

    “The only country that is doing well is America and India, so, there is significant drop in GDP globally except America and India. So, it is not about Buhari,” he added.

    “If we were selling at 102/110 and we were having 38 as production cost and over 70 were put in the basket for sharing, but today, we are selling at 46 and the Joint Venture partners are still taking 38 as their cost of production thereby leaving us with less than $20. So, how are we going to survive?

    “But we are still moving and thinking of how we are going to show that Nigeria has piloted change. So, the people of northern Nigeria or the entire Nigeria should look at this scenario because those in the global business know what the situation is and there is no magic. So, therefore I believe the President is doing well and he started very well.

    According to him, the Nigeria’s economy will experience a significant improvement as all the leakages are being blocked through the introduction of the Treasury Single Account.

    Stressing that Buhari came on board with many agenda, he said Nigerians need to give him time and the chance to do the work.

    “Definitely, he will deliver the campaign promises and at the same time, the issue of security, energy, productivity and discipline in the service, what he has achieved within the five months is remarkable,” Yari stated.

    Continuing, he said: “I have no idea that they are not happy because if anyone can say that, it should not be the north alone, it should be all Nigerians.

    “And I am surprised anyone will say he or she is not happy but maybe they are not happy because he did not consult them in the selection of who his ministers will be. But in general terms, he has done well.” the governor said.

    He also maintained that the NGF, which was crisis-ridden before his tenure, is now faring well under his leadership.

    He said: “Glory be to the Almighty who gave me the opportunity to be a chairman by the support of my colleagues and now, we are having one forum and it is a rallying point to all governors and a rallying point to the federal government in the issue of leadership of the governors and the federal government today.”

  • The economy will pick up

    The economy will pick up

    The 2015 presidential election was an epic contest. Victory at that pivotal election, coupled with the huge expectation of the nation for something magical and instant from President MuhammaduBuhari, can be overwhelming. It is more so, if we factor the politics of governance, against the intent of the President to do things right.

    Therefore, it is to the credit of President Buhari that, even within his 100 days in office, he has been able to stay true to his overarching campaign promises. These are anti-corruption and fighting the Boko Haram insurgency with the determination of defeating it quickly.

    In spite of what might be termed post-electioneering lethargy syndrome, which is observable around the world with emergent leaders, Nigerians know that the new Administration has kicked in an era of government intolerance of corruption. President Buhari has continued to earn the support and audience of the international community for his anti-corruption reputation,which is now being put into action. With what the President has done or stood against, he is no doubt anti-corruption. Also, his order that the military command centre for the anti-insurgency campaign be transferred to Maiduguri – the epicentre of the Boko Haram insurgency – is proving quite strategic in putting the insurgents under more pressure. With the collaborative efforts with the neighbouring Heads of State, there is a sound basis for optimism that the days of Boko Haram’s rampant, savage attacks are numbered. The military has continued the momentum that built against the insurgents since March.

    As important as the advancements on the anti-corruption and anti-insurgency wars are, it is noticeable that weaknesses in the economy are happening at the same time. The new template which the President has been careful to put inplace, though it has delayed the appointment of ministers, will surely help the government to drive economic performances when the government is fully constituted. But it is a fallacy that the economic weaknesses are a direct consequences of anti-corruption. What is also fallacious is the tendency to do the same things and expect different results. President Buhari has been keen to avoid this.

    So, why is the economy under stress? The immediate reason is because the country is now earning just about half of the daily revenue it was getting from crude oil sales since oil prices resurged after the global financial crisis of 2007 to 2009. Last November, oil prices started a precipitous fall from above $100 per barrel. In the last couple of months, the volatility of the price of the Nigerian-grade Brent Crude has been within $45 and $55 per barrel. With little fiscal savings as a buffer against the external shock of fallen oil prices, the Nigerian economy became exposed. The effects of this exposure had started to permeate the system in the last months of the previous administration. Shortfalls in the pool of fund that is shared by all tiers of government had started to create difficulties in meeting such commitments as public sector wages, especially in the states, and payment of petroleum subsidy. The fact that the oil price slump started around the electoral cycle made things worse.

    It is a moot point, the extent to which a fiscal buffer would have shielded the economy from the shock. That is not to de-emphasise the importance of fiscal savings. For emerging economies like Nigeria, fiscal savings are a shield. But in varying degrees, commodity producers around the world are facing inclement economic conditions. At least, the economic narratives have changed for even the super savers among the oil economies. The concerns transcend the immediate impacts of lower oil prices, especially the weakening of currencies. In this regard, the naira has lost about 22 percent of its value since last November, and the pressure for further devaluation has refused to ease.

    However, there is a longer-term concern that we are seeing the inception of a period of adjustments in the global economy. With China entering a period of slower growth, which compounds the weaknesses in the emerging markets, dire economic consequences are likely for commodity exporters. Global asset prices have also witnessed disconcerting volatility of late. All of this means the outlook of the global economy is dull and it cannot be brightened by United States being the only significant spurt for global growth.

    However, a deeper structural issue, at the local level, accounts for the lack of shield for the Nigerian economy against headwinds from the global market. Oil revenue still accounts for 90 percent of government’s external receipts and 70 percent of total income. Inherent in this is the fact that the economic assets that can generate revenues for the government are untapped or little developed, apart from oil. A number of those assets have potentials to generate significant amount of foreign exchange. But even in naira terms, tax revenue is constricted by the little progress in the formalisation of several sectors of the economy.

    Therefore, a two-pronged solution is required in finding the shield for the Nigerian economy from external shocks. The Federal Government must take the lead by enacting policies, backed with unwavering implementation, to unlock the structural bottleneck to the economy. This must be accompanied by formalisation of the “informal sectors.”

    A very key instrument for accomplishing the policy objective of a structurally diverse and virile Nigerian economy is trade. Trade activities map the path of production. As such, productivity incentives can be delivered through trade channels. An example for this is provision of infrastructure. But it is very much applicable to the goods and services being sold and bought. By mapping trade, several advanced economies are able to deliver price incentives or subsidies for measurable production.

    By developing the trade channels, it is also easier to bring producers and operators into the tax net. Thereby, the aggregate tax income for the government would increase. Also important for mention is that by developing external trade of Nigeria’s manufactured or semi-manufactured products, the country would ease the pressure on the naira.

    Nigerian Export-Import Bank (NEXIM Bank), as the official Trade Policy Bank of the Federal Government, has been at the forefront of advocacy and financing for Nigerian non-oil exports. While modest results have been achieved, it is clear to us at the Bank that much more can be achieved in Manufacturing, Agro-processing, Solid Minerals and Services. These are the sectors of the “MASS Agenda” of NEXIM Bank. With China in another economic transition, moving from low-end to high-end manufacturing, and consequently moving from a low-wage environment, there are opportunities for Nigeria to attract investments in the global production, manufacturing and trade value-chains. Investments in the “MASS” sectors will help create jobs and increase foreign exchange revenue from diverse and interrelated sectors.

    This proposal is not new. I have been talking about it in the better part of the past six years. Other Nigerians of economic thoughts have also been talking about structural diversification of the economy. The new tonic, however, is that President MuhammaduBuhari has endorsed this thought. I am elated that he has gone as far as specifically mentioning agriculture and solid minerals as key areas for economic intervention by his Administration.

    Herein lies my optimism that the Nigerian economy is bound to resurge, irrespective of oil price making a slow climb from the current low level. The resolute leadership of President Buhari is a vista for the economic diversification agenda. Since he has bought the agenda, his policy support for it will be effective. His anticorruption stare is now all over the place, ensuring that government’s interventions will be effective. A prime indication of this is the significant increase in power supply since the President assumed office. While it is true that his “body language” is not responsible for the increase in generation and distribution capacities – credit rightly due to the last administration – President Buhari’s posture has proved to be the missing part of the jigsaw puzzle on how to translate the reform and investments in the power sector to more electricity supply for Nigerians.

    While the current stress in the financial market must be taken seriously, one is confident that as we continue to count the things that are working — because they should work — and because the President stares down at whatever prevents them from working (including the faceless cabal), a new narrative will emerge on Nigeria. That narrative will surely drive new productive investments into the country to complement Nigerian entrepreneurs. Even hyper-sensitive portfolio investors, including those who are likely to exit from our securities market because of JP Morgan’s removal of Nigeria from its Emerging Market Bond Index, will trail the new FDIs back into Nigeria.

    • Orya is Managing Director and Chief Executive Officer, Nigerian Export – Import Bank
  • The economy will pick up

    The economy will pick up

    The 2015 presidential election was an epic contest. Victory at that pivotal election, coupled with the huge expectation of the nation for something magical and instant from President Muhammadu Buhari, can be overwhelming. It is the more so, if we factor the politics of governance, against the intent of the President to do things right.

    Therefore, it is to the credit of President Buhari that, even within his 100 days in office, he has been able to stay true to his overarching campaign promises. These are anti-corruption and fighting the Boko Haram insurgency with the determination of defeating it quickly.

    In spite of what might be termed post-electioneering lethargy syndrome, which is observable around the world with emergent leaders, Nigerians know that the new administration has kicked in an era of government intolerant of corruption. President Buhari has continued to earn the support and audience of the international community for his anti-corruption reputation which is now being put into action. With what the President has done or stood against, he is no doubt anti-corruption. Also, his order that the military command centre for the anti-insurgency campaign be transferred to Maiduguri – the epicentre of the Boko Haram insurgency – is proving quite strategic in putting the insurgents under more pressure. With the collaborative efforts with the neighbouring Heads of State, there is a sound basis for optimism that the days of Boko Haram’s rampant, savage attacks are numbered. The military has continued the momentum that built against the insurgents since March.

    As important as the advancements on the anti-corruption and anti-insurgency wars are, it is noticeable that weaknesses in the economy are happening at the same time. The new template which the President has been careful to place, though it has delayed the appointment of ministers, will surely help the government to drive economic performances when the government is fully constituted. But it is a fallacy that the economic weaknesses are a direct consequences of anti-corruption. What is also fallacious is the tendency to do the same things and expect a different result. President Buhari has be keen to avoid this.

    So, why is the economy under stress? The immediate reason is because the country is now earning just about half of the daily revenue it was getting from crude oil sales since oil price resurged after the global financial crisis of 2007 to 2009. Last November, oil price started a precipitous fall from above $100 per barrel. In the last couple of months, the volatility of the price of the Nigerian-grade Brent Crude has been within $45 and $55 per barrel. With little fiscal savings as a buffer against the external shock of fallen oil prices, the Nigerian economy became exposed. The effects of this exposure had started to permeate the system in the last months of the previous administration. Shortfalls in the pool of fund that is shared by all tiers of government had started to create difficulties in meeting such commitments as public sector wages, especially among the states, and payment of petroleum subsidy. The fact that the oil price slump started around the electoral cycle made things worse.

    It is a moot point, the extent to which a fiscal buffer would have shielded the economy from the shock. That is not to de-emphasise the importance of fiscal savings. For emerging economies like Nigeria, fiscal savings are a shield. But in varying degrees, commodity producers around the world are facing inclement economic conditions. At least, the economic narrative has changed for even the super savers among the oil economies. The concerns transcend the immediate impacts of lower oil prices, especially the weakening of currencies. In this regard, the naira has lost about 22 per cent of its value since last November, and the pressure for further devaluation has refused to ease.

    However, there is a longer-term concern that we are seeing the inception of a period of adjustments in the global economy. With China entering a period of slower growth, which compounds the weaknesses in the emerging markets, dire economic consequences are likely for commodity exporters. Global asset prices have also witnessed disconcerting volatility of late. All of this means the outlook of the global economy is dull and it cannot be brightened by United States being the only significant spurt for global growth.

    However, a deeper structural issue, at the local level, accounts for the lack of shield for the Nigerian economy from headwinds from the global market. Oil revenue still accounts for 90 per cent of government’s external receipts and 70 per cent of total income. Inherent in this is the fact that the economic assets that can generate revenues for the government are untapped or little developed, apart from oil. A number of those assets have potentials to generate significant amount of foreign exchange. But even in naira terms, tax revenue is constricted by the little progress in the formalisation of several sectors of the economy.

    Therefore, a two-pronged solution is required in finding the shield for the Nigerian economy from external shocks. The Federal Government must take the lead by enacting policies, backed with unwavering implementation, to unlock the structural bottleneck to the economy. This must be accompanied by formalisation of the “informal sectors.”

    A very key instrument for accomplishing the policy objective of a structurally diverse and virile Nigerian economy is trade. Trade activities map the path of production. As such, productivity incentives can be delivered through trade channels. An example for this is provision of infrastructure. But it is very much applicable to the goods and services being sold and bought. By mapping trade, several advanced economies are able to deliver price incentives or subsidies for measurable production.

    By developing the trade channels, it is also easier to bring producers and operators into the tax net. Thereby, the aggregate tax income for the government would increase. Also important for mention is that by developing external trade of Nigeria’s manufactured or semi-manufactured products, the country would ease the pressure on the naira.

    Nigerian Export-Import Bank (NEXIM Bank), as the official Trade Policy Bank of the Federal Government, has been at the forefront of advocacy and financing for Nigerian non-oil exports. While modest results have been achieved, it is clear to us at the Bank that much more can be achieved in Manufacturing, Agro-processing, Solid Minerals and Services. These are the sectors of the “MASS Agenda” of NEXIM Bank. With China in another economic transition, moving from low-end to high-end manufacturing, and consequently moving from a low-wage environment, there are opportunities for Nigeria to attract investments in the global production, manufacturing and trade value-chains. Investments in the “MASS” sectors will help create jobs and increase foreign exchange revenue from diverse and interrelated sectors.

    This proposal is not new. I have been talking about it in the better part of the past six years. Other Nigerians of economic thoughts have also been talking about structural diversification of the economy. The new tonic, however, is that President Muhammadu Buhari has endorsed this thought. I am elated that he has gone as far as specifically mentioning agriculture and solid minerals as key areas for economic intervention by his Administration.

    Herein lies my optimism that the Nigerian economy is bound to resurge, irrespective of oil price making a slow climb from the current low level. The resolute leadership of President Buhari is a vista for the economic diversification agenda. Since he has bought the agenda, his policy support for it will be effective. His anticorruption stare is now all over the place, ensuring that government’s interventions will be effective. A prime indication of this is the significant increase in power supply since the President assumed office. While it is true that his “body language” is not responsible for the increase in general and distribution capacities – credit rightly due to the last administration – President Buhari’s posture has proved to be the missing part of the jigsaw puzzle on how to translate the reform and investments in the power sector to more electricity supply for Nigerians.

    While the current stress in the financial market must be taken seriously, one is confident that as we continue to count the things that are working because they should work and because the President stares at whatever prevents them from working (including the faceless cabal), a new narrative will emerge on Nigeria. That narrative will surely drive new productive investments into the country to complement Nigerian entrepreneurs. Even hyper-sensitive portfolio investors, including those who are likely to exit from our securities market because of JP Morgan’s removal of Nigeria from its Emerging Market Bond Index, will trail the new FDIs back into Nigeria.

     

    • Orya is Managing Director and Chief Executive Officer, Nigerian Export – Import Bank

     

  • ‘Technology-driven judiciary’ll boost economy’

    ‘Technology-driven judiciary’ll boost economy’

    The use of technology in judicial processes will lead to economic development, a firm, LawPavillion, has said.

    Its Managing Director  Mr. Opeyemi Olugasa said an efficient judiciary can attract foreign investment which can boost the economy.

    “As you may be aware, prompt dispute resolution and enforcement of judgments are areas of keen interest for any serious minded foreign investor.

    “By providing legal practitioners and judges with tools and products that help them perform efficiently, effectively and optimally, we are contributing immensely to national development and growth and supporting our government to achieve its goals and objectives,” he said.

    The firm, which designs legal software, was a Silver sponsor at the International Bar Association (IBA) Annual Conference in Vienna, Austria.

    On why the firm co-sponsered the conference, Olugasa  said: “Considering the percentage of Nigerian lawyers and judges who attend this foremost Conference,  we were  persuaded that it was high time the Nigerian legal industry be portrayed in a clearer focus and this influenced the company’s decision to be a part sponsor of the Annual Conference of the IBA, after being Headline sponsor to the IBA Investing in Africa Conference held in New York sometime in June 2015.

    “LawPavilion is very passionate about raising the bar in legal practice, which decision continues to influence the products and services rendered by the company.

    “Selling the Nigerian legal services industry story is very important to our corporate goal of being the undisputed partner to the 21st Century legal practitioner in Nigeria and Africa at large.”

    He stated that the value of such positioning is immeasurable to the company, but portends even more benefits to the Nigerian and African legal services industry.

    “By being a Silver Sponsor of the IBA 2015 Conference and exhibiting the company’s products, it has become apparent to the whole world that Nigerian jurisprudence is well developed and advanced, enough to allay any fears that might be entertained by intending investors. The rationale also influenced the nature of the company’s most recent product, which has so far received accolades and commendation from the legal industry.

    “It is also the company’s expectation that by showcasing the best of technologies in legal research and jurisprudence, the government at both state and federal levels would see the need to provide access to funds for small and medium sized businesses operating in Nigeria, but who have a global vision.”

    He stated that at LawPavilion, one of the driving forces behind the successes recorded so far by the company is the drive to export technology from Nigeria to the rest of the world, thereby demonstrating that indeed technology put to good use is a leveller and provides ample opportunities for all and sundry to be active in today’s global village.

    In terms of products, he revealed that the company recently re-launched and released a first-of-its-kind product, the Solicitors’ Toolkit (STK) into the market.

    He said: “The STK is a software targeted significantly at Legal Practitioners who work in commercial/corporate circles and contains updated Laws of the Federal Republic of Nigeria, Laws of States, Regulations, Guidelines and Policies from MDAs, Decided Commercial Cases of the Federal High Court, National Industrial Court, Tax Appeal Tribunal, High Court of Lagos State, High Court of the FCT, Abuja.

    “The software also contains Forms and Agreements in templates that are editable whilst keeping the original boilerplate.”

    Mr Olugasa reiterated that LawPavilion remains committed to churning out excellent products that enhance the professional work of legal practitioners and judges in Nigeria especially and Africa at large. He also intimated that the company is working on new products that will be revolutionary and ground-breaking in scope and capacity to facilitate extensive growth and improvement in the legal services industry.

    “We remain pioneers, never resting on our oars because the more we engage our subscribers and clients, the more we see their pain-points and we are resolute to find lasting solutions that will improve the justice delivery system in our great country.

    “Moreover, our vision is to provide superior legal technology support for the African Legal Community, promoting Nigerian youths’ ability to export technology and intellectual property. We think this is unique and would love all the support we can get to make it a reality. This is why we are not resting on our oars, and will continue to push the boundaries. We believe in the Nigerian dream and will consistently pursue it, not being discouraged nor deterred by the seeming lack of enabling environment. In doing so, at times, we experience disappointments, mistakes and failures, but we learn from them and strive on, always guided by the popular Michael Angelo saying: ‘The greatest danger for most of us is not that our aim is too high and we miss it, but that it is too low and we reach it’ “

  • First time governors unlucky over harsh economy, says Yari

    First time governors unlucky over harsh economy, says Yari

    Nigerian Governors’ Forum’s (NGF) Chairman Abdulaziz Abubakar Yari has lamented that first term governors, who assumed office in their states in May are unlucky in view of the harsh economic realities the nation is facing.

    Yari, who is Zamfara State governor, spoke in Enugu at the weekend in company of the former Speaker of the House of Representatives and Sokoto State Governor Aminu Waziri Tambuwal when they visited Enugu State Governor Ifeanyi Ugwuanyi.

    The governors, who attended a burial ceremony in the state, said they decided to visit Ugwuanyi in the spirit of their cordial relationships during their tenures as members of the House of Representatives.

    The three former National Assembly lawmakers were elected governors during the last general elections in their states.

    The NGF Chairman noted that there was hope in efforts to revitalise the economy.

    “Each and every nation has its own problems, especially on the issue of the economy.

    “We were discussing with our brother here (Ugwuanyi). We came in as governors and we can say we are not lucky,  but in reality, we are lucky because we won our elections. We came in at a time when the economy is down, but we are managing.

    “You can see we have hope for Nigeria. When we have security settled and we have the economy gradually working to ensure that all the leakages are blocked, we can enhance the revenue generation to the betterment of our nation.

    “So far, I can say, it’s so good. We are making progress, more especially on the issue of security,” Yari said after Tambuwal preferred that he address reporters in his capacity as the chairman of the NGF.

    On their mission at the Government House, Enugu, he explained that it was because they had good working relationship with the Enugu governor during his days at the National Assembly and that they had come to see the Government House, wish him a successful tenure as well as see the good works he has started in the Coal City state.

  • ‘Eggs add N620b to Nigeria’s economy’

    Yearly revenue from egg sales adds N620 billion to Nigeria’s economy, the Poultry Association of Nigeria (PAN) said at the weekend.

    The association said the industry produced about one billion eggs per annum valued at N22 billion.

    Its National President, Dr. Ayoola Oduntan, who said this in Abuja at a news conference to mark this year’s World Egg Day, added that an egg a day for 50 per cent of the population would add N1.7 billion to the nation’s economy.

    He said: “The egg industry produces about one billion eggs per annum valued at approximately N22 billion.

    “An egg a day for 50 per cent of the Nigerian population will produce a daily economic value of N1.7 billion naira. Annual revenue from egg sales will be N620 billion.

    “If per capita consumption of eggs increases to 100 eggs per person per year, then Annual Revenue would be N340 billion.

    Oduntan explained that egg consumption could reduce the risk of cancer in women by 44 per cent, adding that the product could also increase red blood cells in infants as well as develop their brains.

    “Eggs may prevent cancer as women who consume at least six eggs per week reduce their risk of breast cancer by 44 per cent according to some scientific studies. Eggs prevent ageing of skin.

    “Eggs help to increase the red blood cell count in infants as well as in their brain development. Eggs are best brain and body food for pregnant women, their unborn children and lactating mothers,” he said.

    He urged President Muhammadu Buhari to keep to his promise of an egg per day for school children in his school feeding programme.

  • How policies can drive agro-based economy

    Until the early 70s, agriculture was the mainstay of the nation’s economy, accounting for 80 per cent of its Gross Domestic Product (GDP) and its major export income earnings before losing its place to oil. This is largely on account of the easy access to cash that oil provides.

    Agriculture experts said in reinventing agriculture in an oil-economy, such as Nigeria’s, the solution does not necessarily lie in commercial or large-scale agriculture. This view contradicts the enduring myth that extensive farming is always more productive than small-scale agriculture, which continues to guide agricultural policy in quite a number of developing countries.

    Ironically, studies conducted in developing countries have shown that there is an inverse relationship between farm size and agricultural productivity: smallholder farmers in these parts of the world are generally more productive than large-scale farmers. It was, however, observed in the studies that it may not be the case for developed economies. A publication by a global non-profit organisation that promotes rural smallholder farming, Landesa Rural Development Institute, quotes a research finding as follows: “Smallholder farms in developing countries can generally be more effective than large-scale farms in helping governments and donors achieve their poverty alleviation, food security and many other development goals.”

    For most smallholder farmers in developing countries, farm size does not put any constraint on their productivity and their capability to assist their countries in achieving food security and rural economic development. Rather, their biggest limitations have been, among other things, lack of capital and material resources, poor access to technology and innovation, and the presence of obstacles to trade.

    For this reason, stakeholders in the agriculture sector posit that the Federal Government should put the right strategy in place to empower smallholder farmers who actually hold the key to true transformation in the nation’s agricultural sector.

    In a bid to give a new lease of life to the agricultural sector, diversify the economy and enhance foreign export income by ensuring food security and job creation, the Federal Government established the Agricultural Transformation Agenda (ATA) and other agricultural policies.

    Unlike what obtained in the era of administrations that preceded the erstwhile government, this agriculture intervention has remarkably been receiving the much-needed support from the private sector in recent years.

  • Cleric advises Buhari on economy

    Authorities of the Christ Apostolic Church (CAC) have expressed confidence in the ability of President Muhammadu Buhari to transform the country within the shortest possible time.

    The Church particularly praised the ongoing war against corruption in all sectors of the economy.

    Through its President Worldwide, Pastor Abraham Akinosun, the CAC also pledged to support Buhari’s administration with prayers for his dreams about the country to be realised.

    Speaking with reporters shortly after addressing the Pastor’s Conference at Babalola Memorial Miracle Centre, Ikeji-Arakeji Akinosun warned Nigerians against calling President Buhari “Baba Go Slow”, stressing that the President must be thorough in his efforts to sanitise the country.

    He noted that but for Buhari’s emergence as the President and his stance against corruption; the nation’s economy would have collapsed as a result of high level corruption in most sectors of the economy.

    Akinosun, who expressed confidence in the ability of President Buhari to deliver dividends of democracy, urged him to appoint credible Nigerians as ministers.

    He also stressed the need for Buhari to ensure fairness in his administration’s fight against corruption, just as he advised him to avoid sycophants.

    The CAC President, who commended the present administration on its resolve to fight insecurity in the country, called on the Federal Government to ensure the release of the abducted girls from Government Secondary School Chibok in Borno State.

    Akinosun also called for the declaration of a state of emergency on violent crimes, especially armed robbery, kidnapping and assassination, stressing that “during the declaration, all arms in wrong hands should be mopped up.”

    The cleric, however, urged the Buhari-led administration to revive the nation’s manufacturing industry through stable power supply, saying “power generation in sufficient volume is indispensable if we want to revive the nation’s economy.”

    Akinosun enjoined all Nigerians to support President Buhari’s administration.