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Tag: Nigeria’s economy

  • IMF raises hope on Nigeria’s economy

    IMF raises hope on Nigeria’s economy

    •Seeks confirmation of MPC members 

    At the conclusion of its 2018 Article IV Consultation with Nigeria on Monday, the Executive Board of the International Monetary Fund (IMF) says the economy is on track.  Its directors, however, call for the confirmation of Monetary Policy Committee (MPC) members and Central Bank of Nigeria (CBN) directors. They also seek better implementation of the Economic Recovery and Growth Plan (ERGP) agenda for a more inclusive growth, reports COLLINS NWEZE.

    NEW foreign exchange measures, rising oil prices, attractive yields on government securities and a tighter monetary policy have contributed to better foreign exchange availability, increased reserves to a four-year high and contained inflationary pressures in Nigeria, the International Monetary Fund (IMF) said at the conclusion of its Article IV Consultation with Nigeria on Monday.

    The Fund said economic growth, driven mainly by recovering oil production reached 0.8 per cent last year and that inflation declined to 15.4 percent year-on-year by end-December, from 18.5 per cent at end-2016.

    According to the IMF, reforms under the government’s Economic Recovery and Growth Plan (ERGP) have resulted in significant strides in strengthening the business environment and steps to improve governance.

    It, however, said that all the factors have not boosted non-oil non-agricultural activity, brought inflation close to the target range, contained banking sector vulnerabilities, or reduced unemployment.

    A higher fiscal deficit, driven by weak revenue mobilisation amidst tight domestic financing conditions, has raised bond yields and crowded out private sector credit.

    The Fund insisted that higher oil prices have been  supporting the near-term projections, but medium-term projections indicate that growth would remain relatively flat, with continuing declines in per capita real Gross Domestic Product (GDP) under unchanged policies. Also, the improved outlook for oil prices is expected to provide relief from pressures on external and fiscal accounts. Growth, the fund said, would rise to 2.1 per cent this year, in in view of the full year impact of greater foreign exchange availability and recovering oil production.

    It said renewed import growth would reduce gross reserves despite continued access to international markets. After arrears clearance, the fiscal deficit would narrow and public debt levels would remain relatively low, but the interest payments to the Federal Government revenue ratio would remain high.

    It said: “Risks are balanced. Lower oil prices and tighter external market conditions are the main downside risks. Domestic risks include heightened security tensions, delayed fiscal policy response, and weak implementation of structural reforms.

    “Stress scenarios highlight sensitivity of external and public debt, particularly to oil exports and naira depreciation. Faster than expected implementation of infrastructure projects are an upside risk. A further uptick in international oil prices would provide positive spillovers into the non-oil economy.”

    The Fund’s executive directors agreed with the thrust of the staff appraisal. They welcomed Nigeria’s exit from recession and the strong recovery in foreign exchange reserves, helped by rising oil prices and new foreign exchange measures.

    They commended the progress in implementing the ERGP, including the start of a convergence in foreign exchange windows, tight monetary policy, improvements in tax administration and significant strides in improving the business environment.

    The directors noted, however, that important challenges remain, as growth in the non-oil, non-agricultural sectors, has not picked up; inflation remains high and sticky; unemployment is rising; and poverty is high.

    To address these vulnerabilities, they stressed the urgency in comprehensive and coherent policy actions.

    The directors emphasised the need for a growth-friendly fiscal adjustment, which frontloads non-oil revenue mobilisation and rationalises current expenditure to reduce the ratio of interest payments to revenue to a more sustainable level and create space for priority social and infrastructure spending.

    They said: “In addition to ongoing efforts to improve tax administration, directors underlined the need for more ambitious tax policy measures, including through reforming the value added tax (VAT), increasing excises, and rationalising tax incentives.

    “The implementation of an automatic fuel price-setting mechanism, sound cash and debt management, improved transparency in the oil sector, increased monitoring of the fiscal position of state and local governments, and substantially scaled-up social safety nets should support the adjustment.”

    The directors also commended the central bank’s tightening bias in 2017, which should continue until inflation is within the single digit target range. They recommended continued strengthening of the monetary policy framework and its transparency, with a number of directors urging consideration of a higher monetary policy rate, a symmetric application of reserve requirements, and no direct central bank financing of the economy. A few directors urged confirmation of the appointments of the central bank’s board of directors and members of the monetary policy committee.

    The directors praised the foreign exchange measures and recent efforts to strengthen external buffers to mitigate risks from capital flow reversals.

    They welcomed the authorities’ commitment to unify the exchange rate and urged additional actions to remove the remaining restrictions and multiple exchange rate practices.

    Besides, they urged concerned to contain rising banking sector risks. They welcomed the Central Bank of Nigeria (CBN) commitment to increase capital buffers by stopping dividend payments by weak banks.

    The IFM directors called for an asset quality review to identify any potential capital need. They noted that an enhanced risk-based banking supervision, strict enforcement of prudential requirements, and a revamped resolution framework would help contain risks.

    They emphasized that structural reform implementation should continue to lay the foundation for a diversified private sector-led economy.

    Other essential measures that must be taken, according to them, include: building on recent improvements in the business environment, implementing the power sector recovery plan, investing in infrastructure, accelerating efforts to strengthen anti corruption and transparency initiatives, and updating and implementing the financial inclusion and gender strategies.

    They also welcomed the continued improvement in the quality and availability of economic statistics and encouraged further efforts to address remaining gaps. It is expected that the next Article IV consultation with Nigeria will take place on the standard 12-month cycle.

    Experts react to IMF’s verdict

    Speaking on the report, Managing Director of  Rockview Financial Enterprises, a bureau de change firm, Kingsley Moses, said the IMF is yet to inform Nigerians the basis of their judgment on further naira devaluation.

    He said: “Their judgment is not correct. The IMF and their group have since 1980s been insisting that the naira be-devalued further. But, we have continued to devalue to where it is today. The value of the currency cannot be taken singularly. There are many things that determine how the country runs its exchange.”

    According to Moses, Nigeria has inflationary economy and cannot devalue its currency more because such measure will help a country that has been struggling to encourage local production. “They are not in a position to give us a comprehensive economy plan, but they are not the ones running our economy,” he said.

     

    Economic Recovery

    and Growth Plan

     

    The Federal Government unfolded the Economic Recovery and Growth Plan (ERGP), which outlined how the country will get out of recession and attain stability and growth.

    The economic blueprint, itemised the potentials in the economy and how they can be harnessed for economic growth, development and good of all.

    The ERGP recognised that Nigeria has the potential to become a major player in the global economy by virtue of its human and natural resource endowments. However, this potential, it said, has remained relatively untapped over the years.

    Analysts said the content of the ERGP shows that government is already approaching the solution to the nation’s economic challenges with the same will and commitment it had demonstrated in the fight against corruption and economic development.

    They believed the ERGP brought together all the sectoral plans for agriculture and food security, energy and transport infrastructure, industrialisation and among others means  it can actually be used to revive the economy.

    Besides, after a shift from agriculture to crude oil and gas in the late 1960s, Nigeria’s growth has continued to be driven by consumption and high oil prices.

    “Previous economic policies left the country ill-prepared for the recent collapse of crude oil prices and production. The structure of the economy remains highly import dependent, consumption driven and undiversified,” it said.

    The ERGP, a Medium-term Plan for 2017–2020, builds on the Strategic Implementation Plan (SIP) and has been developed to restore economic growth while leveraging the ingenuity and resilience of the Nigerian people – the nation’s most priceless assets.

    It is also articulated with the understanding that the role of government in the 21st century must evolve from that of being an omnibus provider of citizens’ needs into a force for eliminating the bottlenecks that impede innovation and market-based solutions.

    The plan recognises the need to leverage Science, Technology and Innovation (STI) and build a knowledge-based economy.

    Besides, the ERGP is consistent with the aspirations of the Sustainable Development Goals (SDGs), given that the initiatives address its three dimensions of economic, social and environmental sustainability issues.

    A report by the global research and consultancy firm Oxford Business Group (OBG) sheds a spotlight on ERGP 2017 to 2020, which is leading national efforts to ease the impact of lower oil prices.

    The OBG’s publication also looks in detail at the areas of the economy that have remained resilient in difficult times, such as agriculture, which has become a major employer and is benefiting from an ease in lending constraints.

    The report also analyses the government’s far-reaching plans to modernise the country’s long-neglected public transport system. It considers both the opportunities that the project in the pipeline will attract investors and show the difficulties in bringing private sector operators on board.

    OBG’s Editor-in-Chief, Oliver Cornock, said that while lower oil prices have weighed heavily on the local economy, the government’s ambitious, medium-term strategy for recovery was already beginning to yield results.

    Cornock said: “Nigeria remains an appealing destination for investors and the fact that growth has begun to pick up following a slower period for the economy will provide the country with a welcome boost, as its efforts to develop and diversify the economy gain pace.”

    OBG’s Managing Editor for Africa Robert Tashima agreed that while Nigeria had experienced a challenging couple of years, it appeared to have made some progress, emerging from recession with a floating currency and more bullish expectations for the coming 12 months.

    “There are still a number of hurdles that need to be cleared – ranging from issues such as power shortages and underemployment to limited foreign exchange revenues – but the economy is clearly gathering momentum,” he said.

    The IMF’s Mission Chief for Nigeria, African Department, Amine Mati, said the commercial lenders need recapitalisation to enable them secure fresh funds to boost the government’s chances of achieving the ERGP target.

    He described the ERGP as an important step for the economy and important policies step taken but requiring urgent action to achieve its objectives.

    Also, Stanbic IBTC Holdings Plc said that with diligent execution and policy consistency, the ERGP has the capacity to steer the country towards full economic recovery and sustainable growth and development.

    The key goals of the ERGP, which was unveiled in April last year as a short-to-long term (2017 to 2020) blueprint to lift the country out of recession and return it to the path of inclusive growth and development, include macroeconomic stability, and incremental improvements in national productivity.

    Thy goal include sustainable diversification of production in such areas as agriculture, energy and medium and small enterprises, as well as manufacturing and services.

    Speaking on the sidelines of the 23rd Nigerian Economic Summit in Abuja, the Chief Executive of Stanbic IBTC Holdings Plc, Yinka Sanni, stated that practically, every sector of the economy is endowed with huge potential, which, when adequately harnessed would trigger exponential development of the country.

    By empowering enterprises, big and small, opportunities are unlocked that leads to enhanced productivity levels and subsequent creation of employment for the people, he added.

    Sanni said that though Nigerian enterprises are buffeted by myriad of challenges, with a conducive operating environment, the banks can reverse the trend by providing critical support across the SME value chain, which would enable the sector play its foundational role in economic development.

    SMEs in Nigeria, he added, are constrained in three main areas which he identified as management, finance and business environment.

    “In the area of management are issues such as skills shortage, management expertise, financial management, business support and access to markets, while in the area of finance, they are confronted by cost of capital, lack of collateral, information requirements, regulation impact and culture clash,” Sanni said.

     

  • Nigeria’s economy to grow at 2.1% – AfDB

    Nigeria’s economy to grow at 2.1% – AfDB

    The African Development Bank (AfDB) has predicted a positive outlook for Nigeria’s economic in 2018.

    The bank in its 2018 African Economic Outlook projected that Nigeria’s economy would grow at 2.1 per cent in 2018 and 2.5 per cent in 2019.

    According to AfDB, this outlook is anchored on higher oil prices and production, as well as stronger agricultural performance.

    Notwithstanding this positive outlook for the country, the AfDB said Nigeria still faces significant challenges, including foreign exchange shortages, disruptions in fuel supply, power shortages, and insecurity in some parts of the country.

    “In addition, revenue mobilization efforts are insufficient; at 5 per cent, value added tax rates are among the lowest in the world, and revenue administration is inefficient. Poverty is unacceptably high; nearly 80 per cent of Nigeria’s 190 million people live on less than $2 a day,” the bank said in its report.

    Looking into the future, the AfDB economic prediction on Nigeria noted that “oil prices rebounded to an average of $52 per barrel (Brent crude) in 2017 and are projected to reach $54 in 2018, up from $43 per barrel in 2016.”

    “Oil production also increased from 1.45 million barrels per day in the first quarter of 2017 to 2.03 million in the third quarter of 2017 following de-escalation of hostilities in the Niger Delta region and is expected to remain at the same level in 2018 and 2019, in tandem with the Organization of the Petroleum Exporting Countries (OPEC) production restrictions,” AfDB added.

     

     

  • ‘Nigeria’s economy growing bigger, stronger’

    ‘Nigeria’s economy growing bigger, stronger’

    Binatone Nigeria Managing Director Mr. Prasun Banerjee, in this interview with TOBA AGBOOLA, speaks on how the company is surviving despite the tough economy. He talks about his brand and the innovations targeted at winning consumers.

    As a brand, what has your experience been like in Nigeria?

    It has been a wonderful thing. Although, last year was a little bit difficult, but we were able to cope and stabilise. I will say that we have come out of it and that is why you can see many good products being introduced into the market. We have a long term strategy and that is what has helped us. The same thing with the country. The government has put in place long term strategy and this will help the economy.

    Also, we have been in Nigeria for the past 40 years and we will be celebrating 60 years this year, globally. We have learnt how to keep our cost low so that our products can be affordable, with high quality. We ensure that what we import is of good quality, with two years warranty. So, our aim is to create good value for money. We have a trusted brand in Nigeria for well over four decades. Over the years, we have identified that Africans, particularly Nigerians, like style. They are proud of their homes and want the most beautiful things to take a pride of place in their living rooms. They like practicality, advanced technology, unquestionable quality and of course, an attractive price.

    How has the Federal Government’s policies on imported goods affected you? 

    We don’t have problem with the government policy as regards regulations. The only problem we have is the delay at the Apapa Port. This also caused delay for us and you know one needs to pay for demurrage at the end of the whole thing. But, the government is already addressing this challenge. Efforts are being initiated for improving ease of doing business and we are quite satisfied with the progress the Federal Government  is making to ensure a conducive business atmosphere.

    Government has come up with the procurement policy that says expatriates should not be used for any skill that can be sourced locally. How are you responding to this?

    Absolutely, we are doing that. We have very limited expatriates only wherever required, basically the Managing Director. Across all our  products and divisions, we have locals running the business.

    What is your expansion plan and what are the challenges associated with such efforts?

    We will be opening another assembly in the next two weeks. We want to go into various categories of products and of course, with innovation. In order to expand, one needs to invest, get space in the showroom, and in order to get this share of space, they need to do visibility exercises in terms of product display and demonstration. We have demonstrators, who we train on a regular basis on key features of the products and how to handle and sell them. Some merchants are our first point of contact with the customers. The trained demonstrators are one of the touch points that we have. In terms of availability, we were limited to certain class of retailers, now we have started expanding our retail network. We only had a few supermarkets and retailers in Alaba, but now we have big retail shops across Nigeria.

    We are working with the top retailers in Lagos, Port Harcourt and Abuja. The second touch point we have is in terms of the display. The customer gets to have a touch and feel of the product. He gets it near to his house; he does not have to travel far to get the product. So, our products are available in every supermarket and top retailers across the 36 states and the FCT. Abuja looks after the entire Central and North; Port Harcourt looks after the East; Onitsha looks after Onitsha and Enugu and Lagos looks after Lagos and the Southwest. We have a service centre that is well equipped with trained engineers to take care of consumers even when they have complications beyond the two years covered by the warranty.

    During this process of expansion, have you observed a need to branch into the hinterland?

    What we are doing is to expand step by step.  Once we see that a certain market has potential, we open a branch there. Onitsha was big for us; our next target is Kano or Kaduna to cover the entire North. We have a vast team of people here. I would like to also point out that all the fans that you see here are assembled in Nigeria. We have an assembly unit here in Nigeria and we are planning to assemble some other items here as well. We have given employment to many local people and we have also done good business and generated revenue for the government.

    How are you coping with competition, especially from new brands that are springing up?

    Competition will always be there. Whenever there is a demand for a category, there will always be competition. But we believe that we give good value for money in proposition. We give a product, which is affordable, has value for money and at the same time, gives peace of mind. Our core philosophy is to try and get the product across a wide spectrum of the society at very affordable price. We don’t just give value for money; we also give value to many. We are available, pan Nigeria and one of our strengths is giving the consumer peace of mind.

    One of the ways we do that is by placing two-year warranty on each of our products. We’re already dominant in cooling products for the home, we felt the pulse of the consumer to produce the world’s first 2-in-1 Music Fan. We are market leader in fans and have an assembly unit here. We are also looking at assembling other kitchen appliance products and also help the government to accelerate its made-in-Nigeria initiative.

    How are you responding to the demand for products that meet the energy challenges of the Nigerian environment?

    To take care of the energy challenges, we have rechargeable fans and we will be launching more fans with rechargeable capacity. We know that this is a challenge in Nigeria and there is an opportunity there. So, we are one of the pioneers of rechargeable fans in Nigeria.

    Are you also looking at making fans that could use solar energy?

    We have another company, which is based outside the United Kingdom (UK) and which does that. Discussion is going on but there is no product right now that is commercially available to take care of that challenge. But I am sure that if there are driverless cars, there should also be solar fans.

    How would you compare your market shares in Nigeria with the UK and other African countries?

    Nigeria is a very huge market filled with a young population. Nigeria is one of our home countries. It is a huge opportunity for us that our fans are coveted in every household in Nigeria. Our products are well accepted here in Nigeria. We are not premium products, we give value for money and value to the many products. They are products, which the middle class will always like to buy. For instance, Nigeria is the second biggest appliance market in Africa (after South Africa).

    All top international brands have strong presence in the market. Market is predominantly for mid and lower end products across all product categories. Of course, the Nigeria electronic market has always been doing great and remains a major market for Binatone to continue to explore. As far as Nigeria is concern, we are introducing very innovative products. We have launched many products and we still intend to launch. In short, there is big market in Nigeria.

    Which new products are you bringing to the Nigerian electronics market?

    Binatone has recently launched its innovative Tower Music Fan. Binatone’s new Music Fan brings all of this in its new product offering – the Binatone Tower Fan with digital music. The audio is available via Bluetooth to play any pre-loaded or streamed music from any smartphone and it also allows audio to be played via USB, SD Card, or even a 3.5mm audio. A stunning tower fan with a built-in digital audio system that will reclaim that nostalgic place in the home that first radios once held. The innovation we have experienced in the past two to three decades is unprecedented and what we can achieve with technology is becoming limitless, and this puts a larger than ever onus on product development teams to be able to focus and deliver truly meaningful innovations. Our product is unique, offering for the consumer. Two essential products in one saving valuable space in the home, the Binatone Music Fan is truly destined to be the new centre piece of any home with its style, music and coolness.

    How does the company hope to impact positively on the Nigerian economy?

    Despite the recession we have been growing in business, thanks to our product innovation and keeping our prices low. We have contributed both to the Nigerian exchequer as well as providing jobs to talented and meritorious Nigerians. Apart from direct employment, we also give a lot of indirect employment through the various agencies we hire, which assist us in our business development.

    How are you tackling counterfeiting of your products?

    Whenever you have genuine products, fakes will be present. So, it is something we have to work on. We have been working with Standards Organisation of Nigeria (SON) in identifying and destroying fakes and taking the perpetrators to court. Some cases are still in court. What we do is that whenever we see any product being converted to a fake, we try to exit that model and launch a new model.  We try to keep one step ahead of the fakers. I advise customers to buy from authorised agents and distributors of our products and from leading electronic outlets and supermarkets where there are no fakes.

    How is this impacting on your bottom-line?

    It is not really affecting our bottom line because as I said, we also try to stay a step ahead of the fakes. It is not really a big threat.

    Do you have challenges bringing in your raw materials?

    Initially, most manufacturers had that challenge, but in the last two months, there have been changes. Foreign exchange has been readily available and relatively stable. There is big hope for manufacturing in this country.  I think once the forex gets available freely, markets will again bounce back and boom. I don’t have too much to complain about in terms of bringing in raw materials because we are getting good support.

    What are you doing differently from others?

    We are not doing anything extraordinary. I am not a magician. I will say God is guiding us to go on the right direction. But one thing I know is that, when you produce quality goods, you don’t have to show off. Consumers themselves will determine what the market of the products should be. If I give you my products and you enjoy using them, then I think you will become my customer. If you buy a product and you are not able to use it, will you buy it a second time? The answer is no.

    How has it been managing Binatone?

    I have been managing the affairs of Binatone Nigeria for one and half years. During this time, we have been able to do good business. Although, there have been some economic challenges, but Binatone as I said earlier is a well-known British brand that has been in Nigeria in the last 40 years. It started with electronics and over a period of many years, it shifted its product offerings to fans, kitchen appliances, power products like UPS and stabilisers. We are leaders in fans. We have a wide range of fans. We recently introduced a tower fan with a Bluetooth speaker, which means that if you switch on your fan, you can pair your phone to the Bluetooth speaker and listen to music. The purpose is to launch this one of a kind product that is not available anywhere. We are happy that we are launching it in Nigeria for the first time.

    What are the things that drive you as a businessman?

    It is God. We are all guided by God. Every step we have taken has been guided by God. We have the faith that you can achieve anything you set out to do through God’s help. It is also our belief that you don’t ask your country what your country will do for you. You ask yourself what you can do for your country.  We make sure that we do our part. We belong to the country and it is important that we play our part.

  • A SPECIAL PUBLICATION ON NIGERIA’S BUSINESS ICONS(1):Femi Otedola: Oiling the wheel of Nigeria’s economy

    A SPECIAL PUBLICATION ON NIGERIA’S BUSINESS ICONS(1):Femi Otedola: Oiling the wheel of Nigeria’s economy

    Forte Oil Plc’s push to further consolidate its emergence as the leading diversified energy services provider with an ever-expanding portfolio, covering Petroleum Marketing, Upstream Services, Power Generation and now Green Energy Solutions in line with its 2017 strategy to be present along the energy value chain, while strengthening the legacy product lines is now more than ever a reality.

    The  vision to be the foremost integrated energy solutions’ provider in Nigeria and the need to diversify power segment, is being actualized with the completion and certification of the overhaul at the Geregu Power Plant (GPP) and foray into the growing green energy space.

    The N33.4billion Geregu Power Plant  (GPP) overhaul carried out by the Original Equipment Manufacturers, Siemens AG of Germany, is especially dear to Forte Oil’s heart and shows commitment to power sufficiency as a major contribution to the Nigerian economy. The overhaul increased the installed capacity of the GPP to 435megawatts from the 414Mw when Forte Oil took over in 2013.

    The multiplier effect of the overhaul includes up-to-date knowledge and technology transfer for the Plant’s Technical Team, Turbines in pristine condition and availability of the installed capacity with all three installed turbines in working condition for the first time since it took over the GPP.

    The entry into the Green Energy space via its recently launched solar powered offering, FO Solar, has two drivers which are to reduce the carbon footprint of the existing self-generation alternatives and provide a maintenance-free option. This scalable option promises to revolutionise the backup power market with the ability to support diverse domestic and commercial applications.

    Forte Oil continues to explore customer-centric processes which have led to the development of the FO-App which is available on android (Google Play Store), or iOS (Apple App Store) with end-to-end product ordering and delivery capabilities for retail and commercial customers. The FO App conveniently links the FO Advantage Card, a card that has the dual capability of being a debit and loyalty card.

    Forte Upstream Services Limited, has benefited from the upswing in Exploration and Production (E&P) activities with various term contracts commencing in the chemicals and drilling fluids blending and supply, laboratory, specialised procurement and warehousing services. This is due, in no small part, to expanding internal capabilities and resolve to exceed the usually high standards expected in the very competitive Upstream Petroleum Sector, while at the same time taking advantage of the Local Content Policy backed up with the strong Forte brand.

    It is important to emphasise that despite the storms in the downstream business, Forte Oil’s petroleum marketing subsidiary continues to weather the storm by maintaining its market share of fuels and lubricants.

    The Lubricants business is still an income driver and this was further strengthened in 2017 with its appointment as the distributors of CHEVTEX International lubricants in Nigeria, in addition to the popular Visco 2000, Super V and other Forte branded lubricants.

    The Management and Staff continue to strive for meaningful ways to contribute to the growth of the Nigerian economy and improving the quality of life of its customers under the strategic direction of the Board of Directors led by the Chairman, Mr. Femi Otedola, CON

  • Why Nigeria’s economy may be in trouble by 2020, by Ogbeh 

    Why Nigeria’s economy may be in trouble by 2020, by Ogbeh 

    •Minister: Nigeria must realise $15b from agric to pay loans 

    THE fast recovering Nigerian economy could fall into another deep trouble should the nation fail to realise $15 billion from agriculture by 2020, the Minister of Agriculture and Rural Development Audu Ogbeh has warned.

    The minister said it would be difficult for the nation to repay most of its debts in dollars, adding that the period falls within the maturity dates for most of the borrowing agreements signed by the country with financial institutions and countries.

    Ogbeh, who spoke in an interview at the weekend in Abuja, noted that it was important for the country to start building capacity in the areas of agricultural exports, especially cash crops, such as gum Arabic, cocoa among others to its boost foreign exchange.

    He noted that the Indian government had indicated interest to import brown beans from Nigeria, which has potential market value of $100 billion annually. He said if the country can meet at least 25 per cent of the supply, it will boost the nation’s economy.

    “Then sesames seeds, bananas and Gum Arabic.  Those are things we don’t really consume here.  They are for export. The argument is this, if by 2020 Nigeria doesn’t have capacity to earn $10 to $15 billion from agriculture, we will be in serious trouble.

    “Because many of the debts we are taking now will be due for re-payment.  And if you don’t have the dollars, you can have all the Naira in the world, nobody wants your naira.  Then of course, the Indians came here about six months ago with the Vice President of India.  India wants us to grow beans for them – the black-eye pea, brown beans and all that.

    “Do you know the market in India? It’s $100 billion per annum. If we can tap up to 25 per cent of that, we will be quite happy.  And we can do it.  This is what is facing us and this is what we have to do to deal with them.  Agric is the lowest hanging fruit,” Ogbeh stated.

    At a briefing on Zero Reject of Agricultural Exports organised by the National Agricultural Quarantine Service (NAQS) at the weekend in Abuja, the Minister expressed concerns that almost 30 per cent of yams grown in the country rot away due to poor storage facilities.

    He noted that the stock of old yam remaining were very high while new yams are about to be harvested.

    According to him, yams exported to the United States cost about $15 per three kilogrammes and 30 Pounds per carton in the United Kingdom.

    Ogbeh argued that it is more competitive to export than to process in the country due to high processing cost.

    The minister informed that the National Centre for Agriculture Mechanisation has been directed to locally produce machines that could help farmers make large ridges for yam production.

    He said once the centre develops the mini-tractor, the nation will be capable of supplying yams worth $20 billion to the world.

    He said: “We still have no facilities for preserving yams. At the time we started exporting yams, new yams have started coming out.  There was a fight in Kwara last week.  It was reported that it was about the new yams festivals.  So, new yams are here.

    “The stock of old yams is still heavy.  So, they are going to rot away if we don’t do anything.

    “I saw someone on TV in fact, he also tweeted that it was not a great achievement and that it would have been wiser if we converted the yams to yam starch so that pharmaceutical companies can buy it at a higher price.

    In his argument he omitted something.  He didn’t tell Nigerians the price of a three kilogrammes tuber of yam in London or in the U.S.  I was in the U.S. last year.  I went to North Carolina University and a group of Nigerians gave me lunch.

    “A three-kilogramme tuber of yam sells for $15.  Multiply that by 350.  They say these things and confuse people and say it is nonsense.  He even said, oh, he was not sure that these yams will not be fed to animals.  That is a very bad point, it is totally unrealistic and totally illogical.

    “And then, there about four or five million Nigerians in the UK and they are looking for yams.   There are Nigerians who are entitled to feed, to benefit from what their country produces.

    “From Texas, from North Carolina from California, Nigerians have been calling, ‘why are you exporting only to the UK’.  The World yam market is $10 billion worth.  Why shouldn’t we be part of it?.”

  • How to resurrect Nigeria’s economy

    It has become clear that the Nigerian economy has slipped from recession into a depression. In the first quarter of 2016 the Nigerian economy for the first time recorded a negative growth of -0.36%.This means that the economy didn’t just slow down, it shrank and shrivelled. Since then it has not gotten much better.

    It is essential to bear in mind that like most sub-Saharan economies, Nigeria is not your conventional economic model. The mechanism for retrieving accurate economic indices is not functional. Therefore while statistics may say there is 13% unemployment, in reality it’s actually 53%. While the government may report inflation to be 18%, it really is 58% and rising. All you have to do is go to your neighbourhood market and you would find out that prices for everyday goods have doubled and even tripled! The exchange rate went from almost 200 Naira to the dollar at the end of the last administration to a peak of 500 Naira just weeks ago. Given that most capital and even consumable goods are imported, this subsequently created a state of hyperinflation and a significant depreciation in domestic purchasing power. Coupled with the terrible power outages and deplorable business environment, many companies are closing down or leaving the country. Clearly the current state of the Nigerian economy is not attractive for any type of foreign investment.

    Economic recoveries following a depression are never achieved by blind market forces but by careful fiscal planning and government adaptations. Therefore in this case, something close to the Keynesian ideal of increasing aggregate demand through investments in key sectors of the economy using capital projects would immediately bring relief and stability. The capital projects would continue to generate long-term multiplier effects in terms of economic and GDP growth for decades to come, while the short-term effects of making these infrastructural upgrades using mainly local employment would boost aggregate demand by putting money into the hands of people who in turn spend it on suppliers. This will immediately resuscitate the ailing and dying economy, as well as improve the confidence of the people in their government. It’s a multidimensional approach that is ensured to succeed in less than two years once execution begins.

    Now, because the Nigerian economy is centred on oil and gas, and over 90 percent of government revenue comes from crude oil sales, it becomes imperative that this industry is properly restructured and upgraded to function in the 21st century. This is a case of taking care of the goose that lays your golden eggs. At the foundation of Nigeria’s oil and gas industry is the issue of bringing the national pipeline grid back online. The recent policy where the government attempted to legalise illegal bunkering is quite laughable. This sends a message to the world that the government is helpless and therefore is joining the crooks since it can’t beat them. The national pipeline grid can be upgraded and policed adequately using state- of-the-art technology like distributed acoustic sensing (DAS) and miniature drones. Without a functioning pipeline grid, refurbishing the old refineries and building new ones would result to nothing. Also, the destruction of these pipelines causes severe power outages and electrical issues. The national pipeline grid is at the foundation of Nigeria’s electrical power and petroleum industries and cannot be repaired simply by legalising bunkering.

    Next is the Apapa tank farm, which holds about 80% or more of Nigeria’s refined petroleum products. This area is a tank farm with over 200 tanks-one of the largest in the world- and has a very poor record of industrial inspections and maintenance.  Because there is a poor piping grid, the nation must rely on tankers to distribute the products which leave the traffic situation in Apapa hellish. Given that this area also leads to the primary seaport for the country, it’s an absolute eyesore to behold and indeed a terrible experience. However, congestion is the least of the problem. If there is a leak from one of those tanks due to poor maintenance, the domino explosions would destroy a major portion of Lagos and indeed cripple Nigeria for a long time to come. The government can begin building another tank farm in the Lekki area not just as a backup facility, but to aid in reducing the risk factor in case something bad happens. Also it will function as an auxiliary product storage unit while the Apapa facility is being inspected according to API 653 standards and fitted with proper gas and leak detection equipment. This will decongest the area, improve productivity, reduce and spread the risk factor and use mostly local employment in the repair and new construction activities, thus boosting aggregate demand. The danger, necessity and immediacy of this issue cannot be overstated.

    Furthermore, the government must improve the electricity situation in the country which may very well be the worst in the world. The epileptic power supply is the greatest deterrent to foreign investment. Foreign investors will not entertain an environment where they must provide their own electricity using gas powered generators. Sometimes the generators too are useless when the fuel supply is plagued by periodic shortages. This is just too much headache and overhead cost for most investors. Nigeria is losing a huge opportunity and potentially can be the China of Africa, attracting foreign manufacturing companies and enjoying technology transfer. The electricity issue is really a shame. The government can begin looking into alternative sources to diversify the age old Kainji-dam. The large expanses of land in the middle belt can be equipped with wind turbines to boost the national power grid. This investment will serve the country well for decades to come and will improve national productivity. This too is a worthy capital project to invest in immediately.

    Finally there is the issue of industrial farming: large scale government sponsored farmlands all across the country and the subsidisation of private farmers to supply food. Food has become seriously expensive and a hungry demographic is a dangerous one indeed. The government can open large scale farmlands to service every region of the country. The country is blessed with land and agricultural potential, there is no reason it should be importing food that it can grow for itself.

    These key public investment directives along with the usual road and urban expansion programmes will in less than four years create a new atmosphere for Nigeria. The domestic employment used for these capital intensive projects would boost aggregate demand in the short run and keep the micro-economy liquid and buoyant. On the supply side excess capacity would be reduced, while the multiplier effects of infrastructural upgrades would ensure that national productivity operates on a higher plateau than previously.

    Remember the Nigerian recession has turned into a depression and it will not fix itself. It would require great statesmanship and strategic policy initiatives carried out in a timely manner.

     

    • Ifedobi is an economist and consultant for the American Petroleum Institute (API), based in the USA

  • Nigeria’s economy will grow in 2017 – Expert

    Prof Uche Uwaleke, an economic expert says he is optimistic that Nigeria’s economy will be ‘out of the woods’ this year.

    Uwaleke, the Head of Banking and Finance, Nasarawa State University, said this in an interview with the News Agency of Nigeria (NAN) in Abuja on Tuesday.

    He stated that the growth would be possible, especially if the 2017 expansionary budget was approved in due time and implemented accordingly.

    Uwaleke shares the same optimism with the International Monetary Fund (IMF) regarding a possible growth by 0.8% in the country’s Gross Domestic Product (GDP) this year.

    According to him, the growth will be largely powered by the crude oil price, which is recovering and trading currently in excess of 50 dollars per barrel well above the 2017 budget reference price.

    “I have confidence in the ability of OPEC member countries to sustain this tempo by keeping to the agreed production cut.

    “The attendant improvement in oil revenue will translate to more funds for state governments to pay workers’ salaries and boost aggregate demand.

    “An increase in oil export proceeds will equally impact positively on exchange rate and buoy activities in the real sectors of the economy, especially agriculture and manufacturing.

    “Already, the Purchasing Managers Index, an indicator of manufacturing activity, is reported to cross 50 points threshold in December 2016, after witnessing a decline in the previous eleven months.’’

    Uwaleke said that the favourable agric policies of the government including CBN’s intervention, especially in Rice production through its Borrower Anchor programme, were already impacting positively on the sector.

    He said the contribution of banks to GDP would increase on the back of rising oil price, particularly for many of them with significant exposure to the oil industry.

    The university don said that the capital market was also expected to contribute more to national output in 2017.

    This, he noted was due to the fact that some companies such as MTN, Medview Airline and Jaiz Bank had already announced their intention to list on the Nigerian Stock Exchange this year.

    “Overall, there is a strong possibility that the economy will be out of the woods this year, especially if the 2017 expansionary budget is approved on time and well implemented.’’

  • ‘Nigeria’s economy on path of recovery’

    AS part of its commitment to revive sustainable agriculture activities, Sokoto state  government has purchased 5000 water pumps worth N235million for sale to rice farmers at subsidised prices.

    Chairman of the State Committee on Immediate Framework on Agriculture, Alhaji Chiso Abdullahi disclosed in Sokoto at the weekend.

    He spoke at a town hall meeting on the CBN’s Anchor Borrowers Programme 2017 dry season rice farming in the state.

    Abdullahi who is also the Chairman of the Project Monitoring Team on the Central Bank of Nigeria’s Anchor Borrowers Programme, explained each pump was purchased at the cost N 47,000 which will be sold to them at N 10,000 each.

    The former Deputy Governor in the state also said no fewer than 30,000 rice farmers were targeted in the state during the season.

    He stated that the state government had since donated 5000 bags of 100 kilogrammes of rice seeds to the farmers adding that the state government and the CBN deserve commendation for their commitment to the programme.

    ‘’Their gesture under the programme will really boost food security, curb poverty, unemployment and restiveness.’’

    Echoing similar sentiments, the state Commissioner for Agriculture, Alhaji Bello Nagwari, represented by the Permanent Secretary, Alhaji Garba Sarkin-Kudu, said that the state government was fully aware of the problems bedevilling the development of agriculture in the state.

     

  • ‘Nigeria’s economy on path of recovery’

    ‘Nigeria’s economy on path of recovery’

    Dr Okechukwu Enelamah, Minister for Industries, Trade and Investments addressed a news conference recently where he took stock of his, assignment in the last one year. Assistant Editor Nduka Chiejina was there.

    How would you assess Nigeria’s economy after a year as a minister and what are the strategic roles your ministry is playing to diversify the economy in the area of trade and investment?

    Let me say that when I think about the Nigerian economy, I think in terms of what the Nigerian economy has been traditionally and what the reformed new economy that we want to create would be and what would be different. I think in the past what was good about the Nigerian economy was that we had an economy that had actually started the diversification to some degree, if you look at the GDP and the composition. When they did the rebasing, one of the things we found out was that the GDP was no longer what we thought it was. Services, for instance, had grown; people were going into non-traditional services and we found things like telecoms had grown. We found things like trade and other things had grown, manufacturing was about 10 per cent and agriculture was about 20 something per cent. Oil actually, in terms of GDP was about 10 per cent however when it comes to the revenues of government. We also found out that oil was still about 75 per cent or more then even though that reform had started.

    Secondly, we found out that the foreign exchange earnings of government (over 90 per cent of it) was also from oil. So when we talk about the new economy that is diversified is that we clearly want to diversify our sources of revenue when it comes to foreign exchange earnings as well as more generally for the government. In order to do that, we need to do a number of things. One is that the sectors of the GDP that are significant but don’t contribute revenue in monetary form need to be better monetised, which means we need to give them the resources  they need to be more productive beyond subsistence level, like agriculture. We need to empower our people to do productive agriculture that is profitable so that they can pay their taxes, they can export and do the things that people do versus just producing hand to mouth to eat which is really part of GDP but frankly doesn’t impact the revenue in any form.

    It also means the government needs to be more attentive to the people. What do I mean by that? We need to create a more formal economy not because we want to put more burdens on people but because we want to recognise them. When we talk about formal economy, it’s almost as if they are not there; they are not registered anywhere whereas if you look at the Social Intervention Programme of the government, one of the things we ’ve been telling people is that we just want to know who you are. As a Nigerian you have a right to be known as a Nigerian say this is what I do, whether you are a trader, a market woman, an artisan. You have a right to be known so as to make that registration non-burdensome; not a burden to the people but of benefit to them. I think you would find out the economy will formalise just like when people talk about formal economy they think in terms of the cost-all the road blocks, the redtape and all the taxes they ask you to pay with no benefits,  It’s really about  a government of the people—what you are trying to do for the people.

    That then brings me to the core of the programme, which is how do we diversify the economy from oil?

    In order to diversify the economy, we also need to make the other sectors—agriculture, agro-processes, agric business which is the agriculture value chain, industry and manufacturing, the petro chemicals, downstream that move from oil to all the things and even a sector like auto industry because we consume a lot of cars. We might as well have a very developed industry as opposed to a nascent industry that we just import the cars use them and then sell the tokunbo, at some point. We need to do more than that because this market is large. The good news is that the people who bring these cars are prepared to do more with us because the market is large.

    If you look at Nigeria and ECOWAS, it is just that it’s capital-intensive to do it. Those things are the things we are working on as a plan and the Ministry of Trade and Investments has a particularly important role to play because we view ourselves as a key enabler to those that are in industry, trade and investments.

    The good news is that this is what is shared by the entire government right from the president. That was why the president launched the Presidential Enabling Business Council. That’s why it is chaired by the Vice President.

    The final thing I will say is that we are also working on the Nigerian Industrial Revolution Plan as a key programme of government that would help to diversify away from oil and most is around agriculture and agro processing. What we are doing in sugar, food and food processing, fruits and tomatoes and all those, what we are doing in textile and garment, cotton, textile and garment (CTG), auto. What is going on in housing that government is doing almost in an industrial scale. There is so much going on and one of the things why meetings like this are very important is that we need to communicate better so that people will understand better what is happening even if it takes time to get the benefits to come through so that people will understand what is going on which will yield results imminently.

    Let’s talk about the road show you went about recently. What is the impact like?

    I think what you find is that Nigeria is a country that people are genuinely interested in and I view that as an asset, a blessing. There is no country you go to, no matter how big or small (the president goes along), even at the ministerial level, where they don’t give us the highest treatment they reserve for the most important countries in the world. When we went to Germany, the president met with the president, the Chancellor, and I had a business forum with the elite of the business community and eventually the president came and addressed them. And Germany is interested in working with Nigeria for several reasons. They are very import in auto, in parts, and even the way they built their economy and training people beyond academic degrees with emphasis on vocational training and they expressed interest to work with us.

    I think that you find that there are lots of benefits that will come from the Germany trip. They are also interested in investing in all the areas that we are looking at, including renewable power. And we have a very strong Nigerian business association network; trade association that is working with us very actively and we have met with them even after we came back here. Some of their ministers and parliamentarians came to meet with us.

    Singapore is interesting because as you know, it is a small country that defied the odds and became a very successful, sophisticated first world country and it was under very good leadership by the former prime minister, Lee Kuan Yew, and the main lessons is that number one; they had a government that provided clear leadership and direction. They had a 30 year roadmap and they achieved it.

    Could you tell us how much investments have come in the last one year?

    Yes, people are surprised about how big investments inflows are because they have come in large chunks but let me tell you that we have gotten total of well over $20 billion. You know why because the major infrastructure projects because the one we call an inflow is not just when the money is physically just here but also the commitments that have come. So if you look at the infrastructure projects that we and doing, there is a twenty billion or more infrastructure project with the China EXIM bank, it’s been signed and its now implemented around railways and related infrastructure. There is agreement with General Electric which is about $2billion they have committed in the last one year. There are the private sector investments that talk about Chellarams which sold a major part of their business to Kellogg’s of the United States that deal is may be a $400 million deal.

    There was deal that was done by Chi with Coka Cola. That deal is also hundreds of millions of dollars. BUA also sold something to an international player for a substantial sum. However, we want to increase the steady inflow of foreign direct investment across all levels because there are many more people waiting on the sidelines apart from the big people who are doing multiyear infrastructure projects. As you know, NIPC has just appointed a new hand for the private sector. As a government, we want to partner with the private sector; government doesn’t have all the money it needs to develop the country therefore government is willing and committed to partnering with the private sector players and also development capital to develop the country by making sure the capital goes into the right places. So, I think you will find that in investment, things are picking up even in terms of statistics. There is a significant uptick in investment even though some of it has to do with fixed income investment but it’s still capital that we need. Another thing I want to say regarding investment is that the oil companies have reached an agreement that is now being finalised to bring in more money into the oil sector. You will hear more about it from next week. We are just going through the process you know in oil, everybody has a stake in it, the governors. There was a meeting yesterday Thursday) with the National Economic Council and other stakeholders will be briefed but it’s a very important programme to bring in billions of dollars into the country.

    They say you need oil to get out of oil and this will improve the oil sector significantly. Minister sir, talking about exports what are the bottlenecks and what are you doing about t?

    We have said we want to diversify the economy in terms of foreign exchange earnings and also in terms of revenue and if you think about what that means, it means non-oil exports, to do it, it means we have to do certain things well. My view is that it goes in to the enabling environment and ease of doing business the process of exporting from Nigeria is very and not competitive and the Federal Executive Council has actually asked us-myself and the minister of finance, to come and address the council on practical steps to make it easier to export from Nigeria trading across our borders and we are working on it as we speak. The bottlenecks in terms of administrative, bureaucracy, red tape and all the approvals you have to get and all the inspections and all the waiting at the ports that needs to be addressed, people that are serious about export make that a competitive advantage by doing it. Look at Kenya for example. The second thing we need to do is to give more incentives to those that are exporting so that they will prefer exporting particularly value added export. We have met with the exporters to look at Export Expansion Grants and we have told them that we will find a mechanism for making sure they get paid what they are owed. We clearly want to do it not in cash but in kind which was what was happening before. It’s just that we want to de-emphasise imports and emphasise tax because they have to pay tax to the country and say why don’t you use those taxes to offset or defray what we owe you so that there is a shaking of hands. They are looking at that, they have engaged us and we plan to launch that in 2017.

    This is why the enabling environment initiative I talked about earlier is a panacea; it’s an important intervention and it has to be the legacy of this government and if we do that, Nigerians will remember the President Buhari government as one that came and walked the talk. This is  because every government talks about making it easier for people to do business, it doesn’t mean it’s easy to do. It simply means you’ve to roll up your sleeves. We’ve not put the infrastructure in place, we’ve an enabling business environment secretariat, headed by a reformer, Dr Jumoke Oduwole. We also have a Presidential Council on it that’s meeting today and I think soon, you’ll start to see the results. We need you the media to help us communicate those results, communicate the initiatives of the government to the people so they’re encouraged and know that we’re a hardworking government. Because if you don’t tell them, they’ll think we’re just sitting down, talking and doing nothing.

  • Nigeria’s economy and other matters

    Nigeria’s economy and other matters

    First Annual Conference of The Point Newspaper

    Penultimate Friday, I broke a vow not to attend any forum where the problem with Nigeria’s economy is the issue for discussion. And my reason for the vow is simple: everybody knows the problem with the Nigerian economy but we all pretend not to know until one seminar or workshop is organised to dissect it. I do not think there is any other country where they have conducted as many forums on their economy as the Nigerian economy; yet I do not know if there is any other country that has failed abysmally in harnessing its economic potential as Nigeria.

    The main problem with our economy is our failure to diversify our economic base and this is a thing many of us learnt in our ‘Ordinary Level’ Economics. Many of those who have led us and are still in positions of authority read some of those Economic books which alerted us to the dangers of our monocultural economy. Yet, all they had done mostly was pay lip service to diversification. Perhaps the Muhammadu Buhari administration would have followed the same old path to where we are if crude prices had remained steady at the international market, when it assumed office. Perhaps not. But that is in the realm of conjecture. The reality is that Buhari took over the country’s leadership at a time oil prices had plummeted and Nigeria was caught unawares once again due to lack of planning.

    The situation was worsened by the rapacious stealing by successive government officials, which got to a head during the Goodluck Jonathan administration. So, we all know what the problem is; but we keep dancing round it and pretending that we cannot know until some egg-heads are assembled to tell us where we got it all wrong.

    It was against this background that the invitation I received to attend the Public Presentation and First Annual Conference of The Point newspaper held at the Eko Hotel and Suites on Victoria Island, to mark the paper’s first anniversary penultimate Friday, would have been declined.  Of course, there is also my mortal fear for going to Lagos Island. One, I almost always miss my way on the Third Mainland Bridge whenever I go there, so, whenever I do, I take my old reliable Eko Bridge. This was the same Island I was used to in the good old days when I worked briefly at the Children’s Wear Merchandise Department of Kingsway Stores on Marina Street. (Now that I am better informed, I don’t know whether to say Kingsway Stores’ gentle soul should rest in peace).

     That the event was fixed for a Friday exacerbated my ‘punishment’. Perhaps the most convenient excuse for me not to go was the fact that I had to see my column for the next Sunday as well as the newspaper’s editorial to bed that same day.

    But somehow, I found my way to Lagos because of the respect I have for Mrs Yemi Kolapo, the managing director/editor-in-chief of The Point. And I might have made it to the event to time but for one truck pusher who used his ‘excess luggage’ to ‘pluck’ the side mirror on the passenger side of my car, which somewhat slowed down my speed on the way. I wasted no time arguing with him because I saw him as much a victim of what we were going to discuss at the event that I was rushing to, as myself. The difference is probably in the degree of victimhood. Indeed, I pitied him because he had to overload his truck to make more money since he is not a legislator and therefore does not have any source of bogus pay.

    I met Kolapo for the first time (I guess) in November 2014 at a seminar organised by the then Federal Ministry of Industry, Trade and Investment under Mr Olusegun Aganga. She was Senior Special Assistant (Corporate Communications) to the minister then. We had cause to interact a few occasions after that until the Jonathan government was voted out of power. I have had cause to comment on her articles in The Point (online) on a few occasions.

    So, when I received her invitation to the event, and especially when this was followed by a reminder and yet another reminder, I knew my going to Lagos was inevitable. So, I went. And I must confess I did not regret it even if speaker after speaker regaled us with what we already knew.

    Eminent Nigerians, including Governors Kashim Shettima (Borno), Rauf Aregbesola (Osun)  and Ibikunle Amosun (Ogun) were lead presenters while Governor Akinwunmi Ambode of Lagos State was chief host. But Aregbesola was the only governor present as the three other governors were ably represented. Other dignitaries at the occasion were Oba Michael Aremu Gbadebo, the Alake of Egbaland who was royal father of the day; the Emir of Kano, Muhammadu Sanusi Lamido II, the special guest of honour. Pastor Tunde Bakare chaired the occasion attended also by the Minister of Niger Delta, Uguru Usani, chairman, Punch Nigeria Ltd, Mr Wale Aboderin, Mr Debo Adesina, Editor-in-Chief, The Guardian as well as many directors and directors-general in federal parastatals. Most of the speakers had between three to five minutes and they did justice to the issues raised, even if, as I said earlier, there was nothing new under the sun.

    Then came Governor Aregbesola’s turn. The governor kicked immediately the moderator said he had five minutes. Really, it is impossible to blame him on this score because it is not easy to come down to Lagos all the way from Osogbo only to speak for five minutes. As a matter of fact, his protest and preamble took more than the five minutes. He ended up speaking for about 40 minutes. Without doubt, you could hardly fault his prognosis of the Nigerian economy as well as his submissions to turn things around. Two areas of his submissions caught my attention. One, he calculated that we would be producing about 28 million tyres locally every three years, given that an average car has four wheels. I immediately remembered Dunlop and Michelin that we carelessly allowed to close shop and relocate elsewhere.

    Aregbesola also brought the point vividly home about the harm we do to ourselves by  failing to add value to our exports. According to him, we sell cocoa at about a fifth of the price we import chocolate (which is made from cocoa!) There were some other things said at the occasion, but, as I mentioned earlier, most of it we already know. What we have not done is walk the talk. And that is what we should do.

    However, much as the governor also advocated that we patronise made-in-Nigeria products to save our scarce foreign exchange, I looked at His Excellency’s shoes (he does not like that title though) and discovered they did not look like the ones made by our brothers in Aba. We would need to conduct ‘forensic audit’ on the shoes if the governor insists these are not imported products!

    However, that is just by the way. If Governor Aregbesola had concerned himself with the theme of the conference, which is: “What is the economics of change”, he would have been spot on. Unfortunately, he launched into an area he apparently does not have a full grasp of when he attributed the dwindling newspaper sales to dwindling professionalism, poor grammar, etc. The way he spoke, you would think he had a particular paper or some newspapers in mind. Without doubt, these have their negative impact on newspaper sales; but regrettable as they are, they do not sufficiently explain the drop in circulation. The fact is, in the days of Daily Times of yore that the governor spoke nostalgically about (when the paper sold one million copies daily, again, according to the governor as it is doubtful if Daily Times sold beyond 500,000 copies daily), things were by far better and different in the country than today – the economy, professionalism, and all.

    But I will use at least three examples to correct Governor Aregbesola’s assertion. The point is; newspaper sales are falling due largely to the country’s declining economic fortunes as well as some other factors. If the governor’s position on the matter was right, a newspaper that built its ultra-modern edifice as well as commissioned an ultra-modern press at a cost of over three billion Naira without a kobo loan from any bank would not have achieved that feat only about six years ago. Second, this very newspaper (The Nation) too made profit even in its very first year of operation about 10 years ago. That it is still doing fairly well in spite of our topsy-turvy economy, is proof of its acceptability by readers.

    Again, Governor Aregbesola may have to drive round Osogbo, the state capital, and see the huge number of free readers milling around newspaper vendors. They are hungry for news but lack effective demand, which is the demand backed up with the ability to pay, due to the failure of leadership we have had at all levels in the country. When workers nationwide begin to receive their salaries regularly again, Governor Aregbesola would better understand the point I am making.

    At any rate, how can we get professionalism as in the past in a situation where governments join the long list of debtors owing newspapers huge revenue? Again, going by the governor’s logic, is lack of professionalism the cause of dwindling sales of community newspapers too, because in those days, some of those papers did well for themselves?

    Perhaps the most devastating of the factors responsible for dwindling newspaper sales is the ubiquitous social media. It would interest the governor to note that even in the United States and United Kingdom where the newspapers publish impeccable Queens English, newspaper sales are also going down due to the effects of the social media, which in spite of their imperfections are working towards elbowing out the traditional newspapers that must wait till the next day to report events.

    All said, I seize this opportunity to congratulate the management of The Point on its first anniversary. I also apologise to Alhaji Nojeem Jimoh, a director of the company and former editor of The Punch (which I proudly refer to as ‘my source’ having started my journalism career there, rising to edit the daily title) for my inability to play the role he told me I was assigned at the occasion because I was only aware of that role on my way out of the venue. To dub the occasion a Punch affair would not be far from it as Mr Azubuike Ishiekwene, a former executive director (Publications) of The Punch was also there. Mrs Kolapo herself was once Business Editor of The Punch before joining the trade and industry ministry. Without doubt, The Point debuted at a time things are tough, not only for the media but for the economy at large. Yet, my advice to its management is that the sky is wide enough to accommodate all birds. If not, I would have said so. Indeed, the more, the merrier. The paper’s team should be guided by the aphorism that “when the going gets tough, only the tough get going”.

    Congratulations and welcome on board.