The Nation Newspaper

Tag: recession

  • Expert stresses ‘Agripreneurship’ to combat recession

    Chief Executive Officer Niji Group Nigeria Limited, Mr. Kolawole Adeniji, has urged Nigeria to key into agricultural entrepreneurship, describing it as the panacea to wriggling out of the recession.

    Adeniji, who delivered the fifth convocation lecture of the Osun State Polytechnic (OSPOLY), Iree, noted that entrepreneurial studies, especially through agriculture, is the only panacea to poverty and unemployment in Nigeria.

    Adeniji’s lecture had as theme: ‘Vocational and entrepreneurial education: A veritable tools for job creation and self reliance’

    He said: “With this dwindling economy, creativity, entrepreneurship and skills acquisition are what the Nigerian institutions should encourage its teeming youths at pursuing.

    “Vocational and Technical Education as a practical-oriented education, provides variety of opportunities for youths to develop their potentials. This development will at the end lead to the much-needed technological growth in all facets of the nation’s economy.”

    He said agriculture requires skills and tested methodology to boost efficiency, record keeping and passion on the part of trainees.

    Commenting on the lecture, chairman of the convocation lecture, Prof Olu Obafemi, charged governments to make agricultural and entrepreneurship education a compulsory course at all levels of education in Nigeria. This, said Obafemi from the University of Ilorin, would provide lasting solutions to the poor economy and unemployment.

    The combined convocation sent forth over 14,000 students who graduated between 2012 and 2015 academic sessions.

    Rector of the institution Dr Jacob Olusola Agboola, recalled how the institution began as a satellite campus of The Polytechnic, Ibadan in 1981, and eventually became autonomous in October 12, 1992, following the signing of its bill into law.

    Agboola said since the last convocation. The institution had secured accreditation to mount three new National Diploma programmes – Arts and Design, Welding and Fabrication and Agricultural and Bio-Environmental Technology.

    Agboola praised the collaboration of the institution with Virginia State University (VSU), United States in  Agricultural Education Technology, research, and staff and students exchange programmes, which he said had started yielding fruits.

    Also, he said collaborations with United States Agency for International Development (USAID), particularly the Winrock International in Agricultural Education and Technology, was impacting its host community by extending the outcome of agricultural research to local farmers under the ‘Farmer to Farmer’ (F2F) initiative of the institution.

    “This is an offshoot of the MoU the Institution has with VSU. In the last two years of the relationship, eight volunteers from US through USAID/Winrock International have visited the institution to organise workshops in various areas, including: pedagogical training, library services, and agricultural education,” he said, adding that about 20 academic staff members have acquired that doctorate degrees across various fields.

    Earlier in his address, Osun State Governor Rauf Aregbesola, charged other tertiary institutions to borrow a leaf from OSPOLY by prioritising entrepreneurship education.

    Aregbesola was represented by his Deputy Otunba Titi Laoye-Tomori.

     

  • When will recession end?

    When will recession end?

    Nigeria is in a deep recession, a grave economic quagmire, with no respite in sight yet. In 2015, after a decade of impressive growth of nearly seven per cent annually, the economy stalled and went rapidly into a tailspin. There is now palpable and widespread public concern that the recession may slide into a depression. It has led to a massive loss of jobs, increased unemployment, spiralling inflation and infrastructure decay. The macro economy is in complete disarray. The poverty level in the country has worsened considerably as more and more people are falling into the poverty trap daily. At both the federal and state levels the governments have fallen into arrears on salaries and pensions. The FG and state governments are now borrowing to meet their financial obligations. Technically, our country is now almost insolvent. The CBN is reluctant to lend the FG more money.

    The long recession, possibly the worst in Nigeria’s recent economic history, has virtually wiped out the limited economic gains of recent years. For most Nigerians the future has never been more bleak or uncertain. The country was already in a recession and a grim economic situation when President Muhammadu Buhari took over in 2015. But he is now in charge and it is his government’s responsibility to end the recession and restore the economy to stability and growth. The buck stops with him. But the recession will not yield to quick fixes. It is largely structural. The solution to it has to be equally structural. The government has got to be more serious about introducing the painful structural reforms now needed. Basically, this task involves cutting imports and increasing non-oil exports. The trade balance has to be restored.

    Though baffled that its stimulus spending is not yet working, the Federal Government remains upbeat this strategy will soon begin to yield some positive results. In fact, the Governor of the CBN was reported a few months ago as declaring that the recession had virtually ended, that it had bottomed out, thereby raising false hopes among the people. But this was premature. Recessions do take a long time to resolve. To work effectively the stimulus spending has to be complemented by a range of fiscal and monetary policy instruments that are not yet fully in place. Until these measures are implemented fully, we cannot begin to talk about ending the recession. In its report for the third quarter of 2016 the National Bureau of Statistics announced that the economy recorded a negative growth of -2.24 per cent, down from -2.06 in the second quarter of the last FY. The report for the last quarter of FY2016 is not yet out. But it will almost certainly show that the recession is not yet over. A negative growth of that magnitude cannot be restored in a single quarter. If it does it would be a major economic miracle. So, a lot of work still has to be done by the financial authorities to tackle the root causes of the recession before we can even begin to think of economic stability and growth. This is by no means an easy task. It requires an appropriate, determined and consistent response to a financial crisis caused mainly by external shocks, triggering off maladjustment in the domestic economy. Is the government up to the task?

    The Federal Government appears optimistic that the measures and strategies it has introduced for ending the recession will impact soon positively on the economy. A few weeks ago, President Buhari assured the nation that the recession should end by the middle of this fiscal year. We can do with a dash of optimism all round, but this prediction may prove to be premature as well. It is overly optimistic and based more on hope than on the current economic realities in our country. We can forget the optimistic predictions of the religious seers and prophets who, as usual, have predicted our economic recovery this year. They are equally off the mark. These predictions are totally misleading and speculative. They should be totally ignored as voodoo economics.

    Now, why do I take a dim view of these optimistic predictions about the economy? Why do I believe that the recession is not about to end soon? It is simply because I believe the fundamental problems and challenges of the economy have not yet been fully grasped and addressed. Basically, we are in a recession because of the sharp fall in oil exports and revenues. The recession will end only when there is full recovery in oil exports and revenues. Earnings from non-oil exports have remained insignificant: less than eight per cent of total foreign exchange earnings. In the short run, earnings from agricultural exports cannot fill the gap in our foreign trade balance and foreign exchange earnings. This will take decades even if there is some expansion in agricultural exports. The much needed diversification of the economy away from its over dependence on oil revenues has not materialised over the years, despite record income from oil exports. This was easier to achieve during the decades of the oil boom. But that opportunity was lost again. Imports grew as rapidly, if not more rapidly, than exports, including the oil revenues. The overall cost of governance also increased significantly due to massive corruption in the public sector, and the half-hearted measures to bring it under control. There has recently been some recovery in oil prices rising from $30 per barrel to nearly $60 now. But this is still far short of our normal oil revenues before the economy went into a recession. This means that we are still short of the financial resources needed to pull the economy out of its deep recession. Without massive spending the economy cannot be pulled out of recession. And Nigeria’s financing gap, even with the record oil revenues of the last decade before the recession, was estimated at over $10 billion annually. With the massive loss of oil revenues, the financing gap has obviously grown much wider. Hence, the massive external borrowing by the Federal Government: another future debt burden.

    To this huge revenue deficit must be added Nigeria’s high import dependency. It is estimated that Nigeria spends well over N1 trillion a year on food imports alone. Its manufacturing industry, based on import substitution, a failed strategy, is also largely dependent on imports. And there is virtually little manufactured exports going on. It is the food imports, raw materials imports for industry, and other imported luxury goods that collectively put the domestic economy under intense foreign exchange pressures. This may seem elementary, but it is a lesson that Nigeria’s political leaders have consistently failed to learn over the years. Nigeria was in a similar dire financial predicament following the oil shocks of 1983-5, and a structural adjustment programme had to be reluctantly introduced by the Babangida military regime to address the problem. The economic situation in 1983-5 was, in fact, worse than it is now. There was a recession then too, far worse than what we have now. Nigeria fell into balance of trade and payments disequilibria as it could no longer pay for its vital imports. It was in payment arrears and its creditors cut it off from further credits. At first, we refused to even consider devaluation as a policy option. But later, when it became clear that we had limited options, the Babangida military government was forced in 1986 to devalue the naira. The strategy worked. It was painful as prices soared, but it worked. It was this painful economic stabilisation programme, particularly the naira exchange rate adjustment that ended the recession. Imports began to fall. Coupled with an increase in oil exports and revenues the economy returned to the path of stability and growth, averaging 5%. But regrettably, once the economy appeared to have recovered, Babangida undermined its future growth by frittering away the gains of the recovery on frivolous public expenditures. This was to hurt the domestic economy very badly.

    To some extent, this is what President Buhari has to do now with some modifications to end the recession. As we have no serious balance of payments disequilibrium now, the challenges involved are less serious than those that confronted Babaginda. But Buhari’s economic strategy has to be broadly similar to that of Babangida. He has very reluctantly ended some of the wasteful subsidies in the economy. You cannot pay subsidies with borrowed funds, but from a budget surplus. He was initially strongly opposed to any adjustment of the naira exchange rate, but he has now been forced by compelling circumstances and the realities of Nigeria’s economic situation to come to terms with this measure. But much valuable time was lost by the delay in deciding promptly to allow any devaluation of the naira.

    Timing matters in devaluing a currency. In fact, the devaluation of the naira should have begun in 2013 as soon as it became clear that global oil prices were falling. President Jonathan should have started that process. But by that time political pressures in the PDP, then the ruling party, had begun to build up in preparation for the 2015 elections. When a national currency such as the naira comes under exchange rate stress early devaluation as a policy adjustment has to be introduced promptly. By the time Jonathan left office the prevailing exchange rate of the naira was no longer tenable or sustainable. It had become grossly overvalued. It made imports attractive and cheaper and exports unattractive. And right now, the issue of the naira exchange rate is not yet fully resolved. The present inter-bank rate is N305 to the US dollar, while the rate in the parallel market is now close to N500 to the dollar. The gap between the two rates is much too wide and bad for economic planning of any kind. It is speculative and allows for much round tripping. This regime of multiple exchange rates creates financial uncertainties and is bound to hurt the economy badly, as it constrains foreign investment in the Nigerian economy. Already, because of the recession and other economic uncertainties in our country, Nigeria is no longer the first destination of foreign investors in Africa. It has been replaced by South Africa, Angola, and the Maghreb countries of North Africa, where there is far greater economic and exchange rate stability than here in Nigeria.  To restore our position as the first destination in Africa of foreign investors, we must bring to an end this system of multiple exchange rates. We should allow the naira to float freely. Yes, costs and prices will go up, but it will also restrain and reduce imports. There is no need for bans as they can be counter- productive. A combination of a unified exchange rate and appropriate tariffs on non-essential imports will stabilise the exchange rate of the naira.

    As for the possible impact of this year’s proposed N7.3 trillion budget on the economy and the recession, I doubt whether it can achieve much. Nominally, it is a huge budget. But when discounted for inflation and exchange rate adjustment it is not that huge. The budget deficit is very large with the government hoping to borrow nearly half of the budget at home and abroad. It is unlikely that it can meet either its revenue target or loans. Even if it does there is the perennial problem of budget implementation, the bugbear of budgets in Nigeria. It was estimated that last year only 56% of the budget was implemented due to financial and administrative constraints. It is unlikely that things will be different this year. As for the planned foreign borrowing, the government should instead seriously consider selling off some of its core assets in the oil industry. For instance, it holds 60 per cent in Mobil. There is no longer any need to hold a controlling share there. If the Federal Government sells only 20% of its shares in Mobil Oil, this will immediately yield US$20 billion, which will reduce its resort to foreign borrowing considerably. And this can be used for infrastructure development. The government must put its thinking cap on and be more serious and focused on tackling the recession more vigorously. Otherwise, it will take much longer than predicted for the recession to end.

     

  • Fighting recession with borrowing, budgeting

    Fighting recession with borrowing, budgeting

    The Federal Government has unveiled a three-year Debt Management Strategy (DMS) in a bid to rejuvenate the economy and fund the N7.298 trillion budget. To be managed by the Debt Management Office (DMO), the strategy, according to experts, indicates that the country’s leadership is taking the right steps to exit recession and create jobs, writes COLLINS NWEZE.

    All eyes are on the Federal Government to stimulate the economy by borrowing and the funding of critical infrastructure in this year’s budget through the Debt Management Office (DMO).

    The N7.298 trillion budget is seen as a viable tool to fight recession, but a good part of it will come from borrowing.

    The underlying assumptions for the 2017 budget, which become even of greater significance, at this time of recession, are average crude production of 2.2 mbpd; an average crude price of $42.5/pb and an average exchange rate of N305/$ (the current interbank rate). Then, a soaring oil price may compensate for an underperformance on production, where that is the case.

    But beyond the 2017 budget, the government says its economic team has returned to the drawing board to avert depression, and cushion the pains of the recession. Besides, countries caught in global, regional or national economic recession or depressions invariably, depend on borrowing to bail out their economies.

    That Nigeria has developed a functional bond market, which it can take advantage of, remains a plus for the economy.

    President Muhammadu Buhari has approved plans for external borrowing. The loans will be from the World Bank, the African Development Bank (AfDB), Japan International Cooperation Agency and Export-Import Bank of China. The DMO is to facilitate access to the funds from the multinational agencies.

    To DMO Director-General, Dr. Abraham Nwankwo, a direct measure for reducing the high domestic debt service is to refinance maturing domestic debt with cheaper external debt instead of using domestic debt.

    He hailed the Federal Executive Council’s approval of the DMS (2016 to 2019), saying the strategy would be implemented with a clear guide against unsustainable foreign exchange exposure.

    For him, the country’s ability to borrow from a domestic debt market also has some strategic value. Besides, domestic debt reduces the exposure of the country to exchange rate risks and the limitations of the size of foreign reserves. The independence, he said, lies in the country having the option to exercise the choice to borrow from internal sources, external sources, or a mixture of both.

    “Sovereign borrowing from the domestic debt market encourages the development of a functional bond market, with the scope to introduce different instruments, which will encourage the habit of domestic saving, intermediation and investment. Such a functional domestic bond market will be tapped by the private sector to raise long-term funds for investment in the real sector and infrastructure projects. Nigeria has developed a deep and liquid domestic bond market where funds of up to 20 years tenor can be raised,” he said.

    Although there are concerns that Nigeria’s domestic debt has grown over the past decade while debt service outlay remains high, the domestic debt-Gross Domestic Product (GDP) ratio is only about 10 per cent; the total public debt-GDP ratio is 12.25 per cent. These compare favourably with the peer group threshold of 56 per cent.

    Nwankwo said although the debt service-revenue ratio is high, the problem needed to be unbundled, while a decision is taken on the way forward.

    “Following the rebasing of Nigeria’s GDP, the DMO observed that the increase in the GDP did not enhance the country’s ability to service its debts. Nigeria’s tax revenue-GDP ratio is still below six per cent compared to the average for the country’s peer group, which is 18 per cent. Already, the Federal Ministry of Finance and the Federal Inland Revenue Service (FIRS) are collaborating to improve tax collection and expanding the tax net so as to cut the debt service-revenue ratio,” he said.

    Interestingly, Nwankwo assured that government was also tackling deficiencies in power supply, transportation infrastructure and information communication technology (ICT) infrastructure, guarantee high cost of production, which transmit into high cost of goods and services.

    Besides, government is also promoting and increasing funding to agriculture and agricultural value-chains so as to bring down food prices and significantly dampen the overall inflation momentum.

    “Post harvest preservation, for example through activation of the grain silos, is also being given priority. Beyond optimising on the existing revivable production capacity, the Federal Ministry of Agriculture and Rural Development, Federal Ministry of Water Resources and the Central Bank of Nigeria are collaborating effectively to stimulate more agro-businesses–cooperatives, clusters, as well as mega-scale investments,” he said.

    Nwankwo said the country’s low debt to GDP ratio has cleared the road for the country to borrow more to fund its budget, infrastructure and other essential projects that will stimulate the economy and create jobs for the citizens.

    Regarding foreign debt, the strategy is to borrow on non-concessionary terms for projects with self-paying capacity, and/or job creation potential, and on concessionary terms and grants for social sector projects.

    The DMO chief explained that the focus of the new initiative is to develop a debt management strategy that would ensure that in the face of macro-economic and other financial constraints, the cost and risk profile of the public debt portfolio remains within acceptable limit over time.

    The plan is also in line with President Buhari’s vision to generate maximum employment, reduce poverty and increase the living standard of Nigerians. Nwankwo further stated that for this to be effectively achieved, the government is making efforts in diversifying the economy against the backdrop of structural collapse in oil prices and oil revenue.

    He said: “The Debt Management Strategy we are going to pursue over the next four years takes into account the fact that for now, Nigeria’s public debt portfolio is dominated by domestic debt. After the Paris and London Club exit between 2004 and 2006, the country took a deliberate decision to develop its domestic bond market and to do most of the public borrowing from domestic sources so as to develop the domestic bond market, that objective has been sufficiently achieved.

    “And, therefore, taking into account that external financing sources are on the average cheaper than domestic sources, it becomes more necessary to slant more of the borrowing in favour of external sources. Therefore, one of the major elements of this strategy is that over the medium term, we will strive to remix the public debt portfolio from 84 per cent domestic and 16 per cent external to 60 per cent domestic and 40 per cent external.”

    West African Institute for Financial and Economic Management (WAIFEM) Director-General, Prof. Akpan Ekpo, agreed with Dr. Nwankwo. He explained that budgetary allocations alone might be inadequate to finance the infrastructure deficit with dwindling oil revenue.

    Prof. Ekpo described the debt option as the most viable, pointing out that Nigeria’s rebased GDP economy has given it the leeway to borrow more to bridge infrastructure gap.

    To him, the DMO had in the past, demonstrated good negotiation skills in dealing with the country’s debt matters, either with internal or external creditors, adding that it would not be out of order for the government to borrow from the World Bank or the AfDB to fund the key developmental projects.

    The government can also borrow internally to achieve the feat, he said, adding that internal borrowing is always short-term while external borrowing has longer tenor.

    The DMO, Ekpo said,  has the capacity and constitutional role to advise the government on the available choices. “The World Bank rates are cheaper with longer repayment term. The DMO can also leverage on the Nigeria Trust Fund with the AfDB to get a better deal on the loans needed to fund developmental projects,” he said.

    Head of Macro-economic & Fixed Income Research, FBNQuest, Gregory Kronsten, said crude oil price will end the year on a low note. He said although the oil price has picked up from its recent floor in January and the budget assumption of $38/barrel, it  has started to look conservative. The global supply/demand balance for crude is set to remain low until late next year, he added.

    The thinking is that despite the marginal recovery in crude oil prices, borrowing is still needed because oil will remain low for a long time and may even crash below $40 in the face of production politics.

    Currencies Analyst with Ecobank Nigeria Olakunle Ezun said although funds from the domestic bond market are more expensive than the international bond market, investing in the local bond market is also in the best interest of the economy.

     

    Senate panel chair  seeks debt management advocacy

    A Senator has called for more alvocacy to enable Nigerians understand why the government is planning to raise funds from the capital and bond markets.

    Senate Committee on Local and Foreign Debts Chairman, Senator Shehu Sani, said if there was aggressive advocacy on what such loans would be for Nigerians would support such initiative aimed at driving development.

    He spoke at a tretreat held for members of the committee by the Debt Management Office (DMO) in Minna, the Niger State capital.

    According to him, it is imperative for the DMO to develop a framework in the major languages in the country to get the citizens to understand why debts are taken, for what purpose and what the society stands to benefit from such borrowing.

    Overall, Nwankwo was upbeat that in the next few years, there will be significant improvement in employment generation, poverty reduction and living standard of the people, adding that as part of the new strategy, the DMO will develop new products, particularly the federal government saving bond and diversify the sources of raising funds domestically.

  • Osun: Sustaining development despite recession

    Osun: Sustaining development despite recession

    These are not the best of times for most states of the federation. They do not embark on projects-no thanks to the harsh economic situation. Besides, they cannot pay workers’ salaries. However, despite the nasty economic condition in which most states find themselves, Osun State continues to sustain all-round development. This, pundits say, results from the determination of the administration of Rauf Aregbesola to give his people the best despite lean resources.

    At a period when most narratives point to “the recession” as an excuse for the crippling growth or performance across various governments, the story of Osun State presents a refreshing perspective as to how people-centred development is possible.

    While it may be easy to heap the blame of this economic downturn on the country’s present leadership, Nigeria arrived at this sorry state due to the mismanagement of our national economy by successive administrations at the centre.

    While on the topic of mismanaged economies, it goes without saying that critical infrastructure in Osun State before the inauguration of the government of Ogbeni Rauf Aregbesola on November 27, 2010, was largely in a comatose.  Economic activities had largely slowed down with considerable capital flight and migration of citizens in search of a better life.

    Two options were available; namely to continue in the traditional cosmetic governance; which entails repainting a few state-owned buildings, patch a few roads here and there, pay salaries of civil-servants, using over 70 per cent of the state’s revenue, and position Osun State towards the path of sustainable economic development by making a case for concerted investments and using creative means to raise fund for critical physical and human infrastructure that will, in turn, spur private investments and economic growth.

    Undoubtedly, building roads, bridges, schools and hospitals, among other physical infrastructure, creates jobs, enriches the local economy and gives access to market for farmers (many of whom dwell in the rural areas).

     

    Why debt financing for critical infrastructure?

    For such a small state in a country with high inflationary environment, high  cement prices, currency exchange risks and non-existent steel industry (major components of construction), developing Osun into a 21st Century state became a major challenge, one which the Aregbesola administration tackled very well for posterity’s sake.

    What option really existed before Ogbeni in 2010 other than to raise funds from the capital market at seven per cent lower than commercial bank interest rate?

    Osun opted for a mix of financing options to reduce risks and meet its primary statutory commitment. She followed a responsible borrowing regime by only committing 30 per cent of its revenues to debt servicing, leaving free cash-flow for critical and mandatory expenditure, such as salaries.

    With this, Osun began an aggressive infrastructure roll out in 2012 before the three-headed tragedy of blanket salary increment negotiated by the Federal Government on behalf of states in 2012; 40 per cent crash in statutory allocation due to alleged theft of 400,000 barrel of oil per day in 2013; and 50 per cent crash in the global price of crude oil and subsequent impact on statutory allocation.

    Currently, three super highways are under construction. These super highways consist of five bridges with each bridge at 90 per cent completion. Despite this biting recession, construction is ongoing because Osun secured an innovative promissory note purchase facility.

    Osun’s financial model worked perfectly by creating a pool of funds for infrastructure roll out that can only be utilised strictly for such purpose; due to market regulations of such funding by 2014.

    Using this financial mix, the administration of Governor Aregebsola rehabilitated and completed 230 state roads spanning 368km. His administration partnered local governments to deliver 226 council roads across the 30 local governments and the development areas with a combined length of 216km.

    Osun, in partnership with the World Bank, RAMP 2 programme, also delivered 250 km of rural roads to open up farms in rural areas. The state is on course to deliver the next set of 250 km. It is noteworthy that Osun is one of just six states selected to participate in this programme.

    In all, the government has so far delivered road infrastructure to the tune of more than 1000 km, opening up our rural enterprises and areas, connecting urban centres and positioning the state as a trade and production hub.

    Other construction projects delivered include 20 elementary schools and 22 middle schools all completed and in use. Many more are still under construction.

     

    Human capital development in Osun

    Despite its limited resources, Osun State has continued to champion delivery of an integral human development agenda. Osun, in the last six years, has made unprecedented investments in security towards the greater welfare of the people. Twenty-Five high capacity Armoured Personnel Carriers were deployed, being the largest contribution to the Nigerian Police Force by a state government at the time of deployment.

    The state enjoys a functional 24-hour emergency ambulance services with a fleet of 50 new vehicles across the 31 local government areas. The state-wide ambulance service is powered by 408 well-trained and kitted paramedics, who have attended to more than 8,000 cases since inception. This quality of service in concept and implementation is unprecedented in the annals of the state.

    Osun has also invested in the empowerment of micro, small and medium enterprises (MSME), given the trickle-up impact these make to socio-economic development. The government has so far deployed over N7 billion to 50,000 beneficiaries spread across 4,500 co-operatives and/or businesses targeted at market women, small-scale farmers, artisans and physically-challenged individuals.  Through its welfare programme for critically poor citizens, the government has supported 16,250 widows and disadvantaged people.

    Through the state’s partnership with the World Bank, the Osun Agency for Community and Social Development Project (OSUN CSDP), has reached 1,073,129 beneficiaries in rural communities by committing at least N2 billion to several social developmental projects. The partnership is delivering 356 inclusive, gender-sensitive and multi-sectoral micro-projects, covering education, rural electrification, primary health care, transportation and provision of potable water for 263 communities across the state.

    The government’s strategic investment in the critical basic education level has delivered training and re-training for over 21,017 teachers, giving the importance of these to the learning experience. So far, 277 model schools with 1,811 modern classrooms have been built or rehabilitated.

    The schools are being furnished with 26,922 sets of chair and table. Every school day in Osun, 253,000 elementary school children receive nutritious meals produced largely by local farmers, to boost health and cognitive capability at their formative stage, as well as boost local food production. The Osun School Feeding Programme is the longest running of its kind in the country.

    In six years, Osun has, through its basic education agency, invested over N8.5 billion in building capacity, both in human and physical infrastructure. The investment in education is driven by the resolve of the administration to equip the future generation of Osun State with the best possible resources regardless of their background.

     

    How Osun continues to thrive

    As many states became fiscally unstable and shortfall in federally collected revenues continued to challenge salaries payment, the government of President Muhammadu Buhari heeded Osun’s push for interventions by helping her and other states restructure commercial loans into FGN bond with reduced financial cost and freeing of cash-flow in August 2015. The Federal Government also granted a concessionary loan to Osun and many other states to clear backlogs of salaries and to restore their treasury and fiscal stability.

    From August 2015 till date, the prudent management of concessionary loan (bailout) and its subsequent revenues by the administration of Aregbesola has ensured salaries are paid and workers keep their jobs, rather than embark on mass retrenchment; an alternate idea other state governments have toyed with.

    The salary regime ensures full salaries are paid to junior cadre in levels 1-7, while their senior counterparts are paid nothing less than 50 per cent or greater, depending on the level of income per month.

     

    Omoluabi garment factory, abere

    The government’s infrastructure development efforts has already started yielding results as investments and production have been on the rise in Osun: In 2009, the famous International Breweries, Ilesa, known for Trophy brand which serves the Southwest and beyond, doubled its production capacity to cater for the boost in local economy.

    Tuns Farms, an indigenous poultry company, in partnership with small-holder farmers, ramped up broiler production to position the state as the second largest broiler producer in the country.   Omoluabi Garment Factory, a Public-Private-Partnership between Sam and Sara Garments and the state government emerged as the largest garment factory in West Africa.

    An indigenous computer assembly plant, RLG Adulawo also set shop in Osun as a result of the favourable infrastructure available. These and more are the direct and indirect investment results of the administration’s bet for a prosperous future and these efforts are paying off.

    Consequently, Osun developmental programmes have also impacted on the socio-economic profile of the state as reported by reputable institutions.

    In 2015, The Oxford Poverty and Human Development Initiative (OPHI) rated Osun second highest in human development index among the 36 states in the country. In 2014, Renaissance Capital (RENCAP) in its 36 shades of Nigeria economic review of states ranked Osun as the 7th largest economy in Nigeria, while in 2013 the NBS rated Osun as the state with the lowest poverty rate in Nigeria.

    In conclusion, the impact of the decisions taken by the present administration has continued to yield positive results from all available indices.

     

     

  • LCCI: Budget 2017 may not pull economy out of recession

    LCCI: Budget 2017 may not pull economy out of recession

    THE 2017 Budget may not pull the economy out of recession, because it is not significantly different from that of last year, the Director-General, Lagos Chamber of Commerce and Industry (LCCI), Mr Muda Yusuf, has w said.

    He said the difference might be in its implementation and the sustainability of the underlying assumptions.

    He, however, said there was hope of getting out of recession if the right things were done, adding that the recession story has both external and domestic dimensions.

    “We may not have much influence on the external factors such as oil price, but we have control over the policy environment that we create to attract private capital.  I believe that appropriate policy choices can make a great deal of difference in our story.

    “We need policies that would stimulate domestic and foreign investment.  We need to inspire the confidence of investors.

    “The economy is still a major attraction as an investment destination.  The fundamentals are still good.  But we need to complement this with the right policies – monetary policy, foreign exchange policy, tax policy, investment policy, trade policy and fiscal policy,” Muda told The Nation in an interview in Lagos at the weekend.

    He said the oil price assumption is conservative enough and appropriate for the budget.

    “However, the oil output assumption of 2.2mbd is optimistic, given the prevailing conditions in the Niger Delta.  It is noteworthy that many of the revenue assumptions for 2016 have been reviewed downwards to more realistic levels.  The emphasis of proposed capital spending on infrastructure is laudable.

    “Works, Power, and Housing Ministry has the highest capital allocation of N529 billion; Transportation ministry has the second highest of N262 billion.

    “But given the huge deficit in infrastructure, these allocations are still not adequate to make the desired impact.

    “The public private partnership option needs to be quickly activated to attract private sector capital,” Muda said.

    He said there were several commendable policy pronouncements in the budget presentation by President Muhammadu Buhari.

    Some of these, according to him, include restoration of the Export Expansion Grant (EEG),which is the main incentive for the non-oil export sector; the vote of N50 billion to boost the Special Economic Zones and the Export Processing Zones; the N15 billion capitalisation support of Bank of Industry (BoI) and Bank of Agriculture (BoA); the decision of clear arrears of electricity bills owed by ministries, departments and agencies (MDAs) to power distribution companies; the decision to look into contractor arrears of about N2 trillion which had accumulated for over 10years.

    He said the pronouncement by Buhari that 2017 would see a harmonisation of monetary, fiscal and trade policies was comforting.

    “The truth, however, is that the policy environment will have a much greater impact in stimulating investment and pulling the economy out of recession than the budgetary appropriations. No doubt the budget is important, but the economic policy framework for investors is more important,” Muda said.

  • Making love meaningful in time of recession

    Making love meaningful in time of recession

    Keppy Ekpenyong, one of the pioneering characters in the Nollywood industry, was at his best as Love and Recession, an adaptation of Professor Femi Osofisan’s The Engagement, produced by Ifeoma Fafunwa, hit the stage during the New Year.  He spoke to Edozie Udeze on his role and why Love and Recession fits this season of economic downturn in Nigeria

    Love and Recession, an adaptation of Professor Femi Osofisan’s The Engagement, was the main show during the New Year celebrations.  The theatre scene in Lagos witnessed this love story directed by Ifeoma Fafunwa, to let the world know and really realise that love does exist in time of economic recession.  This was why she deliberately chose The Engagement for this season.  The Engagement is a well-known satire on the issue of love; love between the poor and the well-to-do, love that’s real and convincing.

    It is a story that does not portray love as being discriminatory or cosmetic and so Fafunwa had to use three well-known characters in the theatre industry in Nigeria to demonstrate these roles.  These characters included Keppy Ekpenyong, Omonor and Ikponmwosa Gold.  Together the three brought to life the true nature of love to the delight of the audience.  In fact, the Muson Centre, venue of the show was filled to capacity on the 31st of December when it ran for the third time.  As Keppy bestrode the stage as the father of the young girl ready to get married, his presence evoked a bigger aura.  With his baritone voice and large frame almost enveloping the stage, there was that pride in the life of a man whose lovely daughter had finally brought home the man after her heart.

    Every inch of the way, it was love; love imbued with a huge sense of responsibility.  It was like a lesson in the art of reality.  If this man is the person you really love, then you have to be committed to each other.

    In an interview, Keppy said, “Love in Recession is indeed a wonderful adaptation of Femi Osofisan’s The Engagement, inspired also by Russian playwright, Anton Chekhov’s play titled, A marriage proposal.  So you can see, it is a love story right from the original source to where we are now.  Punctuated with music and vocals and wonderful stage lightning, the play is a simple satirical expression of love and romance, set in a small town or a rural village in Nigeria.  Interestingly, the setting was in the time of deep economic recession and the real issue of love and romance form the central theme in the play.”

    He went on to say more: “Yes, it was a 17th century work in Europe and yet it is even more apt today.  Love is ageless; it is deep; it is unconquerable. Love is the core of life, the reason for our existence.  For us, therefore, it is comic, lighthearted, with every good quality that unwinds the interpretation of both works – The Engagement and A marriage proposal.  For us, it is a simple superficial story where you have the setting of a potential wife.”

    In the story, Keppy held his daughter in high esteem, eager to let her go and have her own home.  He said further, “As the father of the bride-to-be, I had that confidence that she would do well.  This was why I encouraged the wedding and ensured that the marriage was a huge success.  That is the basic thing in this wonderful story that has taught us how to be good parents to our children.  Omonor is a wonderful stage artiste and it has been rewarding working with her on stage.  We had an outing together in London when I played Baruka.  She is an old friend and we have done a few jobs together.  Then Gold is new in my life but he is also fantastic.  A wonderful artiste too, he played his role to the delight of all.”

    Keppy, known for his big roles as an actor, is an old horse on the job.  He is not just among the first generation of Nollywood stars, his face is well-known in most soaps in Nigeria.  He reasoned thus:  “For the theatre, I think Ifeoma Fafunwa is the vanguard, in the renaissance vanguard to promote theatre in Nigeria.  Many people feel she is elitist in her approach and style.  Yet it is not so.  Theatre is for everybody and someone has to add this spice to it.  It is for her to draw attention to theatre and for people to equally have things to keep them busy in this kind of season.  What we have noticed is that there has been an upsurge.  The Fafunwa group has been showing fantastic plays all along and this is one of them.”

    Nigerian stage theatre, according to Keppy, has gone international in the past year or so.  And this is due to the efforts of Fafunwa and others.  Therefore, they have to be commended so as to do more.  “All her works have been large and exceptional.  So now, there is a bigger attention paid to the theatre that when we need to relax we have one or two shows to keep us amused.  This is quite commendable for the stage takes more of your energy than the radio or the television.”

    A lot of people feel because there is a recession people are shutting down. When people think of recession, they lock themselves in, they lock themselves out.  “But with recession here or elsewhere, things can happen; recession should indeed usher in a new lease of life.  That is what is happening in most families.  Do we cut our coat according to our size?  We do not need to waste things and this is what recession is teaching all of us.  This play is good now to teach all of us how to face those realities whether in our love life or not”, he said.

    So now that Nigerians, most of us though, are trying to adjust, there is a difficulty.  “We were known to be wasteful in those days of abundance.”  Love and Recession therefore is creatively inspired to take care of all these issues in our lives.  It resonates differently with different people.  When you watch the play, you take home what appeals to you.  That is the whole essence of this play done in this time of recession to depict love in its satirical sense.  At the end of the play, you’ll notice how great it is; the lesson it has for everyone; for every family.”

    Keppy who confessed that he does not prefer stage to the tube, reiterated the need to make theatre totally amenable to the people.  “Stage theatre brings out the best in you as an actor.  Yes, it does.  But in Nigeria, you sweat just too much to bring out a play.  So you are sacrificing time; too much energy, just to produce a play.  You spend less of that to produce a screen play or so.  It is just too much energy for far too little.  This is why the stage does not really appeal to me all the time.  You have to balance your source of earning and so if you depend solely on stage, that may not be practicable.  Even though a lot of people have begun to show interest and appreciation towards the stage it takes a lot of money to put one play on stage.  It is indeed capital – intensive to do so.”

    As an actor, Keppy believes that stage does not encourage you to have multiple sources of income.  “It tasks you too much”, he insisted.  “See, I have another performance now, I have lost my voice and I have to do my performance better than I did in the afternoon.  This is one of those things stage does to you.  It is tiring, even though a lot of people enjoy it.  We try to organise time to rest after each show, because you need time to get into character again for the next show.  That is how challenging it is to us.  Yet the play can be done for all seasons.  This play is season less and it appeals to all classes of people,” he concluded.

    As it is now, it is hoped that Fafunwa and her team can muster enough resources and goodwill to take Love and Recession beyond the confines of the Muson Centre, Lagos.  It is a play that promotes family values in this time of hardship occasioned by the economic downturn in the society.  It is really both The Engagement and A marriage proposal, defining true love when it matters most – Love in Recession.

     

  • Strange things Nigerians do to survive recession

    Strange things Nigerians do to survive recession

    Because of the economic recession, many Nigerians have lost their jobs, causing harsh ripple effects on the people. To survive, some families have adopted unusual measures, reports Omolara Akintoye

    Hard times, they say, call for strange and deliberate solutions. It is a bit alarming to know some unusual and strange strategies Nigerians are now adopting to survive as the economic hardship continues to bite. Since the economic recession began, a lot of citizens have lost their jobs and this has left a harsh ripple effects on so many families as they now adopt unusual measures to survive.

    Our investigation confirms that there are increased cases of petty stealing and robbery; cases of children withdrawn from schools because their parents or guardians can no longer afford the bills; cases of sick people seeking herbal remedies because they can’t afford medical bills, among other desperate measures. There are even stories of women now engaged in professional begging or in the extreme, offering sex to neighbours and strangers just for a meal.

     Mr. Kola Adedire was a senior staff with one of the leading manufacturing companies in Lagos and was earning good salary for many years until June last year when he lost his job. All efforts he made to secure another job proved abortive and the meager income of his wife, who sells petty things in front of their rented two bedroom apartment, is not enough to sustain the family of five. Since last year’s October, when Adedire’s rent became due, he has been playing hide and seek with his landlord in order to buy time even as he made frantic effort to borrow money from friends and relatives to pay his rent. As at the end of the year, it became obvious to him that all his efforts to get financial help from relatives and friends proved abortive.

    He therefore resolved to look for a one room apartment  but was shocked to discover that the rent has sky rocketed so much that it has also become unaffordable to him. “With the way things are, I’ve already prepared my mind and told my family members that this year, 2017, we are going back to the village,” said Adedire.

    The Godwins, they are being ejected from their three-bedroom apartment and because they couldn’t get money to get another apartment he lamented that he is squatting with his relatives. “As I speak to you, I, my wife and four children are squatting with my elder brother”, he lamented. For Mrs. Chinyere Ukachukwu, who lives in Amuwo-Odofin area and just delivered a baby, she narrated how she had to register in an Herbal home in order to save cost. ‘It is sad to note that although the money I was asked to pay in government hospital was not much, I don’t even have the money so I had to register in a herbal home where you pay little or nothing but mind you, you are at the mercy of those people because God forbid, if anything happens to you,” she said. “I just thank God there was no complication all through my period of pregnancy and delivery”, said Mrs. Ukachukwu.

    In the case of Mrs. Odinakachukwu Ali who hails from Ebonyi State, she was caught by Ebonyi State Police while attempting to sell off her three children whose ages range between 8 months and 6 years. The reason for this according to her was because she could no longer take care of these children single-handedly. “I did not have problem with my husband when he abandoned us since April. I started doing menial jobs to enable me take care of my children. I kept doing this till it became so difficult for me to continue and I decided to return to the village”, she said. Mrs. Odinakachukwu revealed that she did not want to sell her children because she passed through Caesarean Session (C/S) before giving birth to all of them. “But life is hard”, she lamented.

    There is also the case of a housewife who has been offering sex to her next door neighbour as collateral for food to feed her children. These are some of the weird things that people do now just to survive.

    In a related development, a popular businesswoman in Shomolu Local Government Area of Lagos, Olubunmi Uko, recently walked out of her home with her last child (Seun) after leaving behind a suicide note. Oku, according to Mrs. Alake Idris,(her neighbour)  had complained to a relative that her business had gone bad as a result of the exchange rate and that her debt had risen beyond redemption. She reportedly woke up her other children and informed them that she was going to visit someone and as at the time of this publication, Mrs. Uko is still missing.

    Idris also told The Nation about another case in Osun State that shows the depth of hunger in the land. According to her, it all began when a woman went to her neighbour and asked for money to buy some food items for her children and the neighbour said she doesn’t have. While the woman was cooking, she went inside to get seasoning, but when she came out, she found that her pot was gone. She went to knock at the doors of her neighbours in search of the pot of food but nobody, including the woman that asked for some money from her, owned up. But after some time, she saw the woman’s children coming out with food and asked, ‘So how did you get the food?’ It was then that the woman owned up that she took the food so that she and her children won’t die, adding, “For two days, we have not had anything to eat; I won’t watch my children starve to death.”

    Reports have also shown that there is a growing army of dependants in Nigeria. People who used to work are no longer working; maybe they have been laid off from their places of employment. So, there is a growing army of dependants. As a result, begging is also on the increase. According to Mr. Steve Uko, a businessman in Lagos, “Crime rate has increased, from petty crimes to pick pocketing, to stealing of foods and to hard crimes like robbery. The rate of crime has increased and we saw this clearly across the states we visited recently. We also heard of cases of missing pots of soup, especially those who live in communal kitchens. You come out; your pot of soup is gone,” he said.

    Another evidence of the economic hardship is job losses, a development that has led to emergency taxi drivers now seen all over town. “So, someone has a car but in order to buy fuel and put some little extra cash in his pocket, he takes his car out for taxi. Now, if you just park your car somewhere, someone comes out and they have printed papers and medical papers to show you. Begging has become a profession,” said Mr. Abiodun Ajayi, an airport taxi driver in Lagos. Ajayi, who also takes passengers to neighbouring states, said “in addition to begging, there has also been an increase in crime. According to him, there is hardly any state we visited which did not have increased number of beggars, including Abuja.

    Other Nigerians who shared their experiences also said they are cutting down on unnecessary household expenses and luxury items.

    “What that means is that they are cutting out those little ice creams, suya, pepper soup and those little extras that Nigerians used to delight themselves in. Everyone, at least those we spoke to, are now focusing on the basics: food to eat and clothing as last resort.

    “We also have those who told us that they have adjusted their family feeding pattern. So, in the past some families that used to have three square meals now have either a meal or two in a day,” he said.

    We also learnt that many families now survive by creating alternative sources of income, especially by making use of their talents, while others who were buying expensive foreign products now purchase locally-manufactured products.

    Many families are also increasingly engaging in subsistence agriculture, like planting of vegetables in their backyard to sustain living. There are also those who said they have cut down on their transport expenses by resorting to trekking; so Nigerians are now trekking a little more to be able to cover up transport expenses as a result of the hike in transport costs.

    “Prior to now, people who could ask for money were those that are jobless, but now, even those that I well respect and look up to, the economy has created a little twist and they are now calling, asking for favour,” a respondent said.

    The very tough situation has been captured by recent result of some sets of surveys conducted by the National Bureau of Statistics. The bureau assessed the perceptions of Nigerians regarding their current personal economic situation and coping strategies to manage the economic situation over the past few months. It revealed that about two-thirds of Nigerians (66 percent) have been lamenting the worsening state of their personal economic situation in the past few months. Ninety-seven percent of the respondents acknowledged that these recent economic realities have had a negative effect on the general wellbeing of the average Nigerian.

    It added that “Buhari’s government has come out to reassure hope but it is practically difficult to sell the hope story to the citizens, who have now taken their survival in their own hands as against the optimism with which the president was massively voted for early last year. Despite repeated slogan about job creation by the current administration and its efforts geared towards salvaging the ailing economy, Nigeria’s federal government could not tame unemployment that accelerated to 13.3 percent in the second quarter of 2016. Youth unemployment was recorded at 24 percent. National unemployment rate rose to 13.3 percent as against 12.1 in Q1 2016, 10.4 percent in Q4 2015 from 9.9 percent in Q3 2015 and from 8.2 percent in Q2 2015.These tough conditions are now pushing people into daring things that were hardly heard of before now just to keep afloat.”

    Mr. Olalekan Shobande, an educationist and a social commentator, in an interview, proffers the following as steps with which people can fight recession. Reduce Ponzi (a fraudulent investment operation where the operator, an individual or organisation, pays returns) schemes advocates and referrals. According to him, people’s inordinate desire to amass wealth at all cost will make them an easy prey such as the crashed MMM in which Nigerians are counting their losses. He warned Nigerians to desist from such. He also enjoined Nigerians to take the following precautionary measures:  “Sieve information as many will try to prey on your money, adjust expenses to below income levels and save for rainy days.”

    On the part of government, the business analyst said government can curb recession by “reducing tax and rebates, expanding recreation opportunities, reducing dollar dominance of our economy, enforcing laws and protecting businesses and entrepreneurs. He also calls for infrastructural development, job creation drive, among others.

  • Recession pushes insurance claims up

    Insurance companies paid more claims last year compared to previous years as a result of recession, Chairman, Nigerian Insurers Association (NIA), Eddie Efekoha, has said.

    Efekoha, who made this known while speaking with reporters in Lagos, said the high exchange rate has also pushed up insurance claims.

    He explained that premium of insurance policies, whose claims were presently being settled, were paid when the exchange rate was low.

    He further said the economic recession has impacted negatively on insurance business as most people now place insurance last on their scale of preference.

    He added that insurance companies are experiencing fraudulent claims as some people consider it as a source of making quick money to meet their financial conditions.

    He said: “Insurance operators would continue to live up to their claims responsibilities. Insurance should be considered first in decision making, especially now that it is difficult to replace lost items due to high cost.

    “We also call on the government at all levels to leverage on insurance in finding the way out of recession.”

    NIA Director-General added that in other for underwriters to outsmart fraudsters, operators now carry out adept investigations to ascertain genuine claims.

    He noted that amidst challenges, operators are also living up to their responsibilities in paying genuine claims, stressing that the vices been perpetuated by fraudsters would not deter insurers in settling of claims of those who actually need to be indemnified.

    Managing Director, Anchor Insurance Plc, Mayowa Adeduro stressed that insurance companies bear most of the pains in recession.

    “The exchange rate has increased our claim ratio. This is because people are driving on the road, they are depressed and are no longer concentrating. Also, people will go to any length to make claim just to have extra money from the sector.

    “So, we should not expect reduced claims in the industry, rather, expect premium loss. The only company that can withstand it is only those companies that have successfully diversified their portfolios because in every recession, not all the sectors of the economy are affected at the same time. Some like the food sector will grow because people will turn to food,” he said.

  • Muslims group to Fed Govt: tackle economic recession

    The Muslims Association of Nigeria (MAN) has urged the Federal Government to lead other tiers of government to initiate programmes that will take the country out of economic recession and hardship.

    It spoke through a communique issued by its National President Alhaji Sulaimon Alabi Yusuf and Publicity Secretary Alhaja Nurat Adebayo after the association’s National Executive Council meeting held in Ibadan, Oyo State.

    The association advised the Federal Government to increase efforts to provide storage for excess agricultural products from the country’s envisaged bumper harvest, stressing that “obviously, this will serve as a buffer stock”.

    MAN implored the National Assembly to carefully and urgently consider the 2017 budget proposal , which, it said, the Federal Government should consciously implement as soon as it is passed and approved by the legislature.

    It reminded the government of the urgency to implement the planned social security scheme for the country’s poor population.

    The group hailed the government for its concerted efforts in addressing the menace of Boko Haram group, particularly in the Northeast.

    “The Federal Government must address other threats to national security such as abduction for ransom, kidnapping, ritual killings, armed robbery and brigandage, among others, with the deserved seriousness,” MAN said.

  • How recession is affecting our job – Dentist

    How recession is affecting our job – Dentist

    Private companies in the Nigeria’s dentistry industry are disquiet about the state of the nation revealing that they now experience low business patronage more than ever. And consequently Small and Medium Enterprises (SME) in the practice are helplessly winding up.
    Managing Dentist; Choice Dental, Dr. Sade Akiode made this known over the weekend, calling on the President Muhammadu Buhari led federal government to save the profession by fixing the nation’s economy.
    During the chat, the dentist explained that dentistry practitioners are silently passing through hard times consequent drastic drop on patients call for dentistry services in the country.
    Though there is still low level of dentistry education among Nigerians which really is a call to duty for government, advocacy groups and private entities stakeholders but the case is now getting worse as a result of the poor state of the nation economy on citizens.
    “No patient should die or lose a tooth but reverse is the trend in Nigeria today and the severance rate is increasing and getting too worrisome by the day despite the fact that there are certified professional helps around,” Akiode said.
    She further explained that “We are working on the low level of dentistry education through awareness and advocacy programs but government should alongside look into business growth opportunities for our patients and Nigerians at large as a way to help private companies in the industry.”
    Doctor Akiode recently held an open day initiative that availed business exhibition and networking opportunities for guest at the clinic. She said this was conceived just as dentistry practitioners awaits federal government economic restructure and prompt intervention to save the practice.
    She explained the initiative,” We practitioners know that economic downturn as one of the reasons Nigerian patients rarely call for the professional services aside the general low level of education on dentistry in the country.”
    “Today, what we are doing at Choice Dental is an open house for friends, families and patients. Basically some of our patients are complaining about the down turn of the economy and we thought of a way to help them by having them exhibit their businesses so that when people come, eat and have fun, they could also buy some of the things they exhibit.
    “Also we want people to come in and know what choice dental and dentistry is about because most people don’t go to the dentist and we need to educate them more and more. People don’t go to the dentist and a lot of ailments could be prevented but our people don’t know this.
    Nigerians should visit a dentist at least twice in a year. “if people go to the dentist they will understand that we are here to save them and help them safe money. If they don’t visit dentists regularly they will end up spending more money. Dentistry is all about saving everybody’s money,” she said.