Tag: Economy

  • Economy should be private sector-driven

    The Lagos Chamber of Commerce and Industry ,LCCI, has said the economy should be driven by the private sector

    Speaking with The Nation, LCCI’s Director-General, Mr Muda Yusuf said the private sector is the engine of growth in advanced economies and the only solution to the challenges of the economy.

    “The Federal Government should work to make the private sector to run the economy, while it focuses on making and enforcing economic policies and collection of taxes.

    “The private sector seems to operate consistently because the regular government changes makes policy inconsistency and implementation challenges prevalent,” he said.

    Muda said government should focus on creating an enabling environment for the private sector to lead business growth in the country.

    He said the private sector had the capacity to accelerate industrialisation process and open up access to capital for entrepreneurs.

    “Ordinarily, non-national banks are mainly interested in using customers’ deposits to assist businesses to grow, “ he said.

    He said the activities of banks in the economy could be effectively influenced by the private sector operators.

    “Government should only be concerned about taxes to provide the necessary infrastructure and create the ambience for enterprise to thrive,” he said.

     

  • ‘Export vital to economy’

    The Executive Director, Nigerian Export Promotion Council (NEPC), Mr David Adulugba, has said export business is critical to the country’s survival.

    He said Nigeria should encourage the exportation to other commodities aside from oil.

    He warned that no nation can survive on consumption, stressing that export business can impact positively on the Gross Domestic Product (GDP) of the country.

    He said most developing countries have repositioned their export sectors for prosperity.

    “It is a proven fact that export business is critical to a nation’s health as it impacts positively on the GDP. This is because it catalyses economic growth; creates a strong base for technological development; encourages economic specialisation; and ultimately high rate of investment.

    “Yet, their products still appear in Nigeria through the ECOWAS Trade Liberation Scheme,’’ he said.

    He said most of the foreign companies used Nigerians for temporary jobs without equipping them with the technical know-how.

    Adulugba noted that Nigeria had relied too much on oil as the main revenue earner, which might not guarantee a prosperous future for the nation’s youths.

    He said the agency had a number of incentives to encourage export business.

    He recalled that in the last 15 years, export products had been getting the necessary support, urging operators to learn to operate, according to international standards.

  • Mali and how to strangle your economy in one easy step

    Mali and how to strangle your economy in one easy step

    In times of war, a word of wise council is to be sought above the chatter of anxious men.

     

    This is a column in two parts. The first movement concerns Mali. The latter portion centers on the despondent economic news coming out of Europe and America.

    Given some comments I received last week, there is a need to refine points raised in last week’s submission on Mali. Some comments received were quite instructive. Others revealed that many people view complex events too simplistically. Because the violent Islamists in Mali seek to impose a vile existence, these commentators reasoned that the French-led western intervention is an unalloyed positive. Some people even claimed the piece backed the Islamists. That they missed the crucial point of the piece is likely attributable to my imprecise and clumsy pen. Indulge me as I try to clarify the central theme of that piece in hope of helping people discern the motives of the great powers.

    The violent extremists are not the children of Islam; they are spores of evil. However, just because the West now fights them in Mali does not render the intervention altruistic or mean the outcome will redound to the benefit of Mali or West Africa. The situation is tragic because it allows only a choice between bad and worse. In such straits, we opt for bad because it is less onerous; it does not present a happy occasion. That the jailer severs one man’s leg at the knee but maims yours only at the foot is not a proper cause for elation.

    Many applied the adage “the enemy of my enemy is my friend” to the crisis. Because the radical Islamists are an incendiary scourge, the western guns opposing them must be friendly these people reason. Sadly, they take the hoary maxim out of context and thus take false comfort in it. The saying applies when the third party has no significant relationship with you and no vital interests contrary to yours. If that party has interests colliding with yours, better toss the maxim out the window. Otherwise, it will lead to certain folly through imprudent policy. During World War II, Germany and the Soviet Union wanted to consume Poland. They allied in the despicable endeavor of dismembering a sovereign nation for no legitimate reason save the love of brigandage on a grand scale. Afterward, Germany used seized Polish territory as its forward platform to invade the Soviet Union. This is not to imply that Western designs in the Sahel are as sinister as Hitler’s machinations. Western nations are calculating; they are not irrational madmen. No, this example is a cautionary one. The domain of the great powers is not a simple place. The shortest distance to a desired point is never a straight line. Shadows serve as the filament of light in this world of intrigue within intrigue. In this place, the enemy of your enemy may well be your enemy.

    Such is the case in the Sahel. He who fiercely battles the Islamists does so for their selfish interests. Hopefully, the jihadists will be defeated; most likely they will fade into the ocean of sand to bide their time. The West will appear to have saved the day. But for whom? African leaders must think strategically. The people on the street are free to applaud the Europeans’ heroics. National leaders cannot afford the frivolity. They must formulate strategies minimizing the influence foreign militaries have in the region or risk lurching toward a new form of inferiority redolent of that old evil called neo-colonialism. Again, WWII provides the apt lesson. While Germany threatened, America and the Soviet Union allied against it. The minute Berlin fell prostrate, America and the Soviet Union descended into a Cold War.

    It is natural to feel relief that France has grasped the cudgel in Mali. This relieved sensation should block us from questioning why this was not done in Libya. Had they deployed troops in Libya, Mali would not have erupted. Tactically, it would have been easier to contain the Islamists along the narrow strip of fertile Libyan coast than to chase them the length and breadth of Mali. Moreover, the current Libyan government would have been strengthened. Where did the West think the jihadists would go after Gaddafi’s departure? Did they think the fighters would seek to vacation on the French Riviera? Months ago, the jihadists established several camps in southern Libya. Yet nothing was done about these camps although their very presence indicated the extremists were plotting a southern strategy. It was almost as if the West dared the jihadists to do what jihadists do: make war.

    Mali has become a beachhead for the western counterattack against Islamic insurgency in the Sahel. Coincidentally, the battleground of northern Mali reportedly has large quantities of uranium. The area lies adjacent to confirmed deposits in Niger. No wonder France has turned into a charging bull. Nuclear reactors supplies 75 percent of Gallic electricity. Having your soldiers deployed in the vital areas is a head start to getting your hands on the precious commodity. The fracas will also deter China; the West believes the meddlesome Chinese might sell their offspring to consummate a deal but they are not ready to fight for one.

    America has announced it will operate a drone airplane base in Niger. American troops also have deployed in Mali as advisors. AFRICOM has finally arrived by stealth, under the guise of emergency help. Several years ago, African leaders steadfastly opposed AFRICOM’s deployment on the continent. They blanched at a vastly superior, imperial military having a permanent presence on the continent. Since then, AFRICOM has searched for the slightest aperture through which it could set boot on African soil. They found the crack when a stream of non-black African jihadists funneled into the Sahel. This raised such apprehension that African nations forgot their stance against AFRICOM. Now, western deployments are greeted with indiscriminate applause.

    The deployments will arrest the fall of Mali. This is good. However, Africa must brace itself for the blowback. The Malian crisis will not be fully resolved under the present constellation of factors. The Tuaregs will likely remain embittered. Consequently, the northern tier of the Mali and Niger will become the Sahelian equivalent of the eastern region of the Congo. The government’s writ will have no currency in these badlands. However, exploration and mining will intensify, feeding French energy needs and the coffers of western firms. Meanwhile, western military deployments, under the guise of training, will sprout throughout the region. Previously barred entry through the front door, AFRICOM entered the house through the hole in the roof caused by the Libyan debacle. Most people will see this as a needed level of new security. History says otherwise. No long-term American deployment in a developing nation suffering an insurgency has ever relieved that nation of the insurgency. Usually, the deployments make a grander mess of things. This is the future that now beckons. There is no reason to applaud it. Now, on to economics.

    Western governments are not so busy in the Sahel that they don’t have time to choke their own economies. Europe and America stumble along the road of austerity like zombies in a trance. These countries relish a close relationship with economic disaster. Spain’s unemployment rate has reached a historic high. Greece falls so deeply into depression that many of its citizens no longer can afford heating oil to see them through the winter. They resort to burning tires, and furniture as well as chopping down trees for firewood. The nation that was the world’s first democracy has been demoted to the Third World. Europe’s third largest economy, Italy contracted by 2.3 percent last year; this year’s shrinkage is predicted to be worse. The Netherlands joined the recession parade late last year. The German economy, Europe’s largest, slowed during the last half of 2012. The UK faces an unprecedented triple-dip recession, experiencing its third sustained downturn in less than four years. America’s economy also shrank by a small margin during 2012’s final quarter.

    These nations share a common economic trait. They all persisted with fiscal austerity despite preponderant empirical evidence against this approach. They are like the madcap adventurer who places his finger under the descending guillotine blade. Upon seeing the severed finger, he reasons he will be safe if he puts his head under the blade because the thickness of his neck will protect against his head’s amputation.

    The pain caused by austerity is beyond a sad joke. It is sadism practiced by governments now servant to those who inhabit the strongholds of finance and power. These people and their servants derive malevolent glee at watching the poor scamper about like small insects trying to escape before the descending boot crushes them into the turf. If only they were forsaken, the poor could make it. However, austerity has added burden to their burden. There is no escape or recovery. There is only dismal endurance. Light has perished from their lives. The complex theories of mainstream economics have escorted the people into a modern Dark Ages that need not have been. It is tragic and mean because it is all so unnecessary.

    Yet, the princes of high money insist on austerity because it benefits them if no one else. Governments continue slashing their budgets, particularly funding for the poor and underclass. Millions of people have been set adrift. England now suffers the most dumbfounding example of stubborn adherence to discredited policy since Chamberlain walked backwards into WW II by appeasing Hitler in hope that the hyena of Berlin would tire and be sated if fed a generous snack of small, defenseless nations to devour.

    Not shackled by membership in the Eurozone, England has its own sovereign currency. Thus, it can run fiscal deficits without fearing insolvency. Instead, what PM Cameron and his Tory brethren most fear is an insolvency that will never come. Thus, they force feed austerity to their countrymen as a warden feeds gruel to his inmates. Repeatedly, Cameron has promised that austerity would grow the economy. Each time he has repeated it, the claim has failed him. Now the country borders on a rare triple-dip recession. Yet he cannot concede the error. He keeps promising prosperity is around the corner. It may be around the corner but sadly not the corner toward which he leads the nation. When Cameron stands on the international stage to berate Nigeria or any other nation for economic wastage he stands as a self-righteous thrower of stones living in a glass hut. The pain he inflicts on his economy is of the same magnitude as that for which he denigrates Nigeria. His misdeeds are also done for the corrupt purpose of bettering the moneyed elite. Consequently, the man has no more right castigating Nigeria than a drunk has fulminating against a drug addict for engaging in substance abuse.

    The shrinkage of the American economy is directly attributable to a reduction in government spending. Still, both Democrats and Republicans waltz toward a deal whereby they will brusquely cut the federal budget by several hundred billion dollars. This will plunge the nation into a recession that will bear President Obama’s name.

    Despite the books and theories written by the prominent economists paid and made by Big Money, nothing substitutes for the truth. The more governments impose austerity in a time of economic weakness, the more their economies falter. Being a clerk to Money Power, the IMF traverses the world seeking out vulnerable economies it can stifle, contract, and deflate. This travelling show often tours Africa selling its enervating wares. Africa consumes the defective products with good humor; but the good humor does little to mask our bad poverty. Austerity should be jettisoned before too many people are force to consume the flesh of their own diminution. Unless African nations break the intellectual shackles to forge independent-mind policies that grow their economies for the benefit of the people, they will consign their populations to an existence hounded by a poverty so relentless and omnipresent that it shall become synonymous with life itself.

    In this vein, news that West Africa pursues a monetary union is discomfiting. The contemplated regional union is eerily similar to the Eurozone architecture. The flawed structure of the European monetary union intensified the economic downturn of that area. A monetary union strips nations of their currency sovereignty. A nation with a sovereign fiat currency can run government deficits that spur growth without fear of becoming insolvent. Once a nation agrees use a currency over which it is not sovereign, the nation becomes slave to the currency. The country can no longer run deficits to spur the economy because it is no longer the producer of its own currency. The nation is reduced to the status of any common shop or household. It can go bankrupt and thus is prone to austerity as protection against such an outcome. This is a steep price to pay for the ephemeral, uncertain benefits of a common currency. West Africa should rethink this move lest it repeat the mistake Europe made. The costs for West Africa will be steeper because its economies are frailer than their Western European counterparts.

    The critique of austerity and financialist policies is a recurrent theme of this column. I do this not to bore but to warn you of what is to come unless we begin to think for ourselves. These policies are inhumane at best. They also don’t work. The policies do the opposite of what their advocates espouse. This outcome goes beyond GDP statistics and government accounting ledgers. The contest of progressive, pro-growth policies versus conservative austerity policies goes beyond ideology. It will dictate whether African governments will be sufficiently equipped to educate our children, build the roads and bridges that open to a more placid future, and care for the elderly and infirmed. It will determine whether the general economy is sufficiently healthy to produce jobs giving the average man the chance at a decent wage and dignified life. It speaks to whether Africa can free itself from the past or remain prisoner of it. In the end, we must decide whether we live for ourselves and author our own fate or serve as the stationery upon which someone else writes their own story.

     

  • NESG forecasts 7% growth for economy

    NESG forecasts 7% growth for economy

    The Nigerian Economic Summit Group(NESG) has predicted a seven per cent growth for the economy in the year. This is slightly above the six per cent projected by the International Monetary Fund (IMF) and the European Union.

    Driven by non-oil sector growth, Nigeria’s economy grew 6.28 per cent in the second quarter of last year, up slightly from the 6.17 per cent attained in the first quarter. Historically, from 2005 until last year, Nigeria’s Gross Domestic Product (GDP) growth rate averaged 6.8 per cent. It reached an all-time high of 8.6 per cent in December of 2010, and a record low of 4.5 per cent in March 2009.

    The GDP growth rate provides an aggregated measure of changes in value of the goods and services produced by an economy.

    Also, the NESG said inflation rate would hover around an average of 10 per cent in the year, with potential for single digit inflation by the second quarter. It said the IMF had predicted 9.5 per cent inflation rate for the country.

    The body in a report entitled: Nigeria: Macroeconomic outlook and themes for 2013, said the economy would continue with its steady growth this year, adding that the non-oil sector will grow by an average of 8.5 per cent per quarter and drive the economic growth.

    The NESG said: “Agriculture, trading, telecoms, power,  transport and building,  are the sectors to watch.

    In 2012, these sectors collectively accounted for over 70.44 per cent of GDP, and also grew by 4.12 per cent, 31.85 per cent, 3.05 per cent, 6.49 per cent and 12.59 per cent  in real terms.”

    It said the oil and gas sector would show a mild recovery  if production leakages from oil theft and vandalism are contained in the year.

    “We see up to two per cent rise in production capacity unlike the government’s projection of 8.02 per cent rise from 2.37 bpd average in 2012 to a 2.56 bpd target in 2013,” NESG added.

    It projected between 25 per cent and 30 per cent gains on the All-Share Index in 2013, stressing that this would help in consolidating the 37 per cent market recovery witnessed in 2012.

    It said, at that rate, the All-Share Index will likely outperform emerging market indices as it did in 2012, adding that capital market will perform strongly, similar to 2012.

    NESG said the banking sector would be the market driver of the year, given its dominant 26 per cent share of market capitalisation, high liquidity, cleaner asset bases and relatively attractive valuations.

    It said domestic bond market would enjoy increase in both local and foreign participation as Nigeria looks to join Barclays emerging market local currency government bond index in March.

    Nigeria, it said, would maintain its BB- ratings upgrade by S&P and Fitch on account of the Federal Government’s decision  to consider  Diaspora and infrastructural bond this year.

     

  • Expert advocates diversification of economy

    Nigeria needs to diversify its economy to enable it

    to develop enough buffers that would protect it against global financial crises, the Director-General, West African Financial and Economic Management (WAFEM), Prof. Akpan Ekpo, has said.

    Speaking at the Finance Correspondents Association of Nigeria (FICAN) Roundtable on Economy held in Lagos, he explained that there are indications that the world economies are still encountering challenges and Nigeria has to prepare against implications of those occurrences in the economy via diversification.

    According to him, many developed countries have cut aid to developing countries and this is a pointer that economies of those countries are facing some problems.

    He said oil and gas revenues cannot be sustained for too long because they will dry up in the future.

    He said developed economies, such as United States of America, United Kingdom, did not perform well in 2012 as a result of economic challenges. However, some African and Asian economies experienced relative growth.

    He said Nigeria remains an import dependent economy and needs to change from this economic direction if it wants to develop.

    He said the time was ripe for Nigeria to pursue the diversification of the economy to make the country less vulnerable to movements in oil prices.

    The European Central Bank last year slashed its Eurozone growth forecasts and warned that recession will drag on into the middle of this year, sending the euro plunging below 1.30 euro to the dollar.

    Greek lawmakers have also passed a tax bill seeking to raise state revenue by 2.3 billion euro, part of commitments demanded by international creditors to continue to receive further bailout funds. Euro-area finance ministers approved 49.1 billion euro of rescue payments to Greece in December 13 to keep the recession – wracked country solvent, with 34.3 billion Euros paid immediately.

     

  • Nigeria, Cameroon to partner on economy

    The Nigerian High Commissioner to Cameroon, Hajiya Hadiza Mustapha, on Monday said the two countries were proposing to partner on economic development to enhance cooperation between them.

    In a chat with the News Agency of Nigeria in Abuja, Mustapha said the two countries had recognised that if cooperation was maintained, there would be improved economic development in the countries.

    She said the partnership would create room for increased exchanges between the two countries.

    “The oil wells issue is one of my missions. I am pursing a project that will expand our economic cooperation in that area because it is one of the best ways to ensure security between the two countries.

    “It is something that has been discussed under the Cameroon-Nigeria Mixed Commission and we are hoping that it will yield positive results,” Mustapha told NAN.

    The high commissioner said there was a proposal from Cameroon to Nigeria for cooperation in hydrocarbon production, adding that the Federal Government was studying the proposal “and the issue is on course.”

    She advised Nigerians in Cameroon to always renew their residence permit when due “even though I don’t have any problems with that as Nigerians in that country are cooperating well.

    “I always advise them to obey the rules and regulations of the country so that they will not face any harassment.

    “Cooperation and peaceful living are my major areas of priority and I want to ensure that it is maintained.

    “The relationship between Cameroonians and Nigerians living in Cameroon is very cordial. The government cooperates with us and gives me all the facilities to do my job,” she added.

     

  • Basin Authority to reposition economy

    The Niger Basin Authority is to ensure that Nigeria benefits from the economic activities of the basin.

    The Minister of Water Resources, Mrs. Sarah Reng Ochekpe, who spoke at the end of the meeting of the Council of Ministers of Niger Basin Authority in Abidjan, Cote d’Voire, said the position of Nigeria as a decision maker has helped to protect the interests of Nigerians living in the basin.

    She said: “Nigeria is at the downstream of the basin and if we are not involved, activities upstream may hinder the flow of water to the River Niger, which serves as a source of livelihood to many Nigerians.

    “The ongoing projects at the basin, when completed, will provide job opportunities for the people through irrigation farming and fishing, thereby increasing the income level and quality of lives of the people, which are results of President Goodluck Jonathan’s transformation agenda.”

    The Executive Secretary of the Niger Basin Authority, Gen. Collins Ihekire (rtd), urged qualified Nigerians to take advantage of the recruitment exercise at the basin as soon as vacancies are advertised, to enable citizens benefit from such opportunities.

  • Fed Govt restates commitment on economy

    Fed Govt restates commitment on economy

    Federal Government has reassured that it is committed to the diversification of the economy.

    Vice-President Namadi Sambo said the government was looking beyond oil and gas revenue.

    He spoke on Monday at a Command Performance/Dinner in honour of the participants in the ongoing Abuja National Carnival where he stood in for President Goodluck Jonathan.

    Sambo said the Federal Government would promote the tourism and culture sector.

    The sector, he said, provides the economic development option, with high capacity for economic empowerment, employment opportunities, poverty reduction and good returns on investment.

    Sambo said the sector could make Nigeria the number one tourists’ destination in the world.

     

     

     

     

     

  • ‘Security challenges will disappear if economy improves’

     

    The Director-General, National Institute for Policy and Strategic Studies (NIPSS), Kuru, Jos, Prof. Tijani Bande, said the country’s current security challenges will disappear if the economy improves.

    Bande made this known at an annual press briefing to herald the 2012 graduation of Senior Executive Course 34 in Kuru on Friday.

    According to him, the poor economy is responsible for the high rate of unemployment in the country.

    “The problems the country is experiencing are connected to unemployment as youths are losing hope of getting jobs after years of graduation.

    “ Having a robust and diversify economy is one sure way for peace in the country,’’ the News Agency of Nigeria quoted Prof. Bande as saying at the graduation ceremony.

    The director-general said the participants of the course had “deeply reflected’’ on the situation and had understudied other countries with similar experiences.

    “They have submitted a proposal to the president on the ways to improve the economy.

    “ The proposal specifically hinged on the diversification of the economy to shift focus from total dependence on oil to agriculture.’’

    The other recommendations included solid minerals development, education, training as well as peace and culture.

    He added that most of the recommendations from the institute had found themselves as policies of government and expressed optimism that the recommendations would be treated accordingly.

     

  • Reflections on management of Nigeria’s economy

    Reflections on management of Nigeria’s economy

    The Nigerian economy has been off the rails over the last four decades or so. The situation took a turn for the worse as it literally dropped off a cliff and now lies in a ditch, face down. The manifestations are obvious; youth unemployment is high, poor power supply, poor road network, obsolete rail system and sub-standard educational and health systems. Overall, the average Nigerian is living in appalling conditions with mud or mud-brick [dwelling] houses using firewood as cooking fuel and depending on kerosene as source of lighting. Only limited households have access to pipe-borne treated water for drinking and cooking. To boot, many people in the country use the bush as toilet. Infant and under-five mortality rates are very high. In the area of security, Nigeria has not fared well either with several incidents of kidnapping and terrorism occurring every month. A generic reason for this parlous state of the Nigerian economy and wider society is the poor perception of what economic management really means. It is perhaps not immodest to assert that our top managers of the economy have not demonstrated sound understanding of what it takes to manage a modern economy.

    A modern economy thrives on the platform of a lean and highly-efficient government, an enterprising and active private sector, functional infrastructural base and a robust academic environment. These would be supported by a highly-mobile military and people-friendly Police force. As complements, a modern economy needs an articulate, educated and enlightened political class as well as a neutral and fair judiciary and strong labour movement. Therefore, the fundamentals of modern economic management are derived from proper understanding of the structural linkages within the economy. Such appreciation would be reflected in what to do when there is an upsurge in economic activities (boom) and what not to do when there is a slow-down. It is the interaction of the policy and economic variables that usually engage managers of a modern economy at the macro level where the central government operates on a routine basis. At equilibrium, the right mix of policy variables will produce the desirable level of economic variables and the citizenry would be reasonably at peace – obtaining the goods and services they require at the right places, the right time and the right prices with full employment.

    There are two other segments of the economy that needs attention; the meso and micro segments. Between the macro level of the economy on one hand, and the micro level [comprising consumers and producers] on the other, there is the middle or meso level. The two sets of meso level economic variables relevant to modern economic management are markets and infrastructure. Markets form part of the mechanisms through which economic and policy variables transmit signals or connect to operators at the micro level. Policies or other forms of interventions alter market conditions faced by individual households and producers through changes in relative prices and quantities traded. The other component of the meso economy is infrastructure. Three types of infrastructure are readily discernible, namely: economic, social and institutional. Investment in economic infrastructure like roads, electricity and irrigation facilities promotes economic activities and boosts money supply, thereby stimulating production.

     

    Government needs to also invest heavily in social infrastructure as they impact positively on the lives of individuals as well as promote production. The foremost social infrastructural facilities are related to the provision of health services, educational facilities and water to the population. Institutional infrastructure forms the bedrock of public administration and internal and external security. Included here are all government institutions at all levels of government. Top rate performance of these institutions on a sustainable basis is a sine qua non for efficient management of a modern economy. With optimal levels of infrastructure in place, the right enabling environment would have been created for the micro economy to thrive.

    Our economic managers must realise that in managing a modern economy, the least attention should be given to political, religious and ethnic considerations. Rather, the primary focus should be on such economic factors as creating an enabling environment for the private sector and markets to function efficiently. It is pertinent to note that no road, electricity facility, school, hospital, police or military force is owned by political parties in Nigeria. Neither are any of these infrastructural facilities solely used by Moslems, Christians, Hausas, Igbos, Efiks, Binis, Yorubas, Fulanis, Nupes or Urhobos. They are of universal usage; indeed, public goods and services in which we must invest. Nigerians must also amend their attitude towards the management of infrastructural facilities in the country. We tend to build facilities and then go to sleep. Even as the population increases regularly, we do not plan to upgrade, maintain, sustain and expand our facilities. With increased demand and stagnant supply, the facilities soon become over-stretched and decayed.

    Nigeria is a particularly strange case, completely at variance with propriety and defying logic. Most states are too poorly resourced and managed to have any economic future due to high cost of administration. In spite of these facts and owing to ignorance of and insensitivity to current realities, many people are agitating for the creation of more states as if new entries will run on auto-pilot. For the size of our economy at present, the cost of governance is very high. Why are there so many public institutions in the country? Why should salaries in public service not aligned with the scope of responsibilities and schedules? Why should our law-making be a full-time job? Why should the lawmakers, Ministries and CEOs of public institutions have the power to engage Special Assistants and Advisers at the expense of government even as many of them have little value to add?

    Nigeria has to take the counsel of the US President Barak Obama. On a visit to Ghana some three years ago, he had advised Africans that the way to progress is to build strong institutions rather than strong leaders. Failing to do this, African countries cannot leap forward into the 21st Century. For instance, we cannot lay claim to building strong institutions in Nigeria if a major political party [as an institution] can put forward a felon for high office and he “governs” a State for eight years; subsequently planting his scion as a key player in government. How then was the man expected to focus on good governance. Rather, he looted the State treasury of billions of Naira, evaded the law in his country only to be convicted through diligent prosecution in another country. This clearly exposes Nigeria’s weak institutional infrastructure.

    • Dr. Akinyosoye, an Applied Economic Policy Analyst and Data Management Specialist writes from Ibadan.