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Tag: recession

  • Ambode: Nigeria moving out of recession

    Ambode: Nigeria moving out of recession

    Lagos State Governor Akinwunmi Ambode has said the nation is gradually moving out of recession.

    He, however, warned that Nigerians must sustain the progress achieved so far.

    The governor noted that  there may be retrogression, if the progress is not sustained.

    Ambode challenged governors to concentrate on their comparative advantages for self-sustainability instead of over dependence on the Federation Account.

    He noted that when states  harnessed their resources, it will lessen the burden on the Federal Government and make them economically viable.

    He spoke while delivering the convocation lecture, entitled: “Recession: Challenges and Recovery Prospects” at the Wellspring University, Benin City, Edo State.

    Represented by Commissioner for Finance Akinyemi Ashade, the governor said the nation was plunged into recession because of the incessant vandalisation of oil facilities by militants and  over concentration on crude oil as a major source of revenue.

    According to him, “this  was the direct consequence of significant economic headwinds following the adverse shock to the oil price that started since mid 2014 and more recently significant production shortages following pipeline vandalism in the Niger Delta  and because oil is the main revenue base of the government, the system went into comatose.

    “The current focus on the centre for the economic  sustenance of states is not sustainable.

    “Each state or perhaps more appropriately region must figure out its own economic path by focusing on the areas it has comparative advantage and developing it.

    “This calls for hard work  and thinking outside the box.

    “We cannot have a stable economy when the states are not independently viable. Luckily, we are blessed in this country where arguably  every state  is endowed with natural resources.”

    Vice Chancellor Prof. Obi Ikediugwu urged the graduates to internalise what they have been taught.

  • Recession and war situation

    Recession and war situation

    SIR: Two major things are responsible for Nigeria’s economic recession: corruption (haram) and war against Boko Haram that is ravaging human lives and economic resources, compounding Nigeria’s underdevelopment and mass abject poverty, 2011 to date. But the Speaker of Nigeria’s House of Representatives, Yakubu Dogara, has no qualms deceiving Nigerians that a particular bill will end economic recession. How can that be when those in the presidency, the federal legislators, and the ministers are earning fabulous salaries and allowances?

    Dogara colluded with the Reps and bought 360 cars at N10m each for 360 Reps. The picture is not different with the Senators, and so, 109 Senators and 360 Reps (469 persons altogether) are said to spend N120b annually for various things, using various means, such as committee and oversight functions’ entitlements.

    Money is not the problem of those in government but what to do with it. They share and spend money anyhow. After four years, a Senator gets 24.9m severance, and a Rep N23.8m plus.

    When Muhammadu Buhari became President, he declared that his own “doctors are UK-based”, and sold dollars at official price to Christian and Muslim pilgrimage-makers, at the expense of the economy and common Nigerians. All of that is what the Boko Haram Islamic sect describes as boko haram, but distorted as hatred of Western education by Nigeria’s rulers, giving a dog a bad name in order to get it hanged.

    The hatred of Boko Haram is so intense that Nigeria’s rulers rule out dialogue in favour of perpetual war. Former President Goodluck Ebele Azikiwe Jonathan stopped Madam Sarah Jubril from initiating dialogue with Boko Haram, and turned round to say that the Boko Haramists were ghosts. Where is human conscience in Jonathan? But, does conscience count when talking about power and affluence?  Buhari and his cohorts also chose war against dialogue and national reconciliation. Yes, Boko Haram is killing innocent people. Are the victims of boko and non-boko harams not innocent people? Consider the effects of harams on Nigeria and common Nigerians.

    Hardly any day passes without news of Fulani herdsmen killing crop farmers brutally. Some farmer-hunters resort to magical amulets. Those in Nigeria’s Internally Displaced Peoples’ Camps are in extremely deplorable conditions, but the Pentecostal Fellowship of Nigeria and their Muslim counterparts are less concerned about the humanitarian crisis which horrified the UN Security Council. What economic miracle can Nigeria’s rulers perform in a war situation?

     

    • Prof Oyeniran Abioje,

    University of Ilorin,

    Kwara State

  • ‘Recession will soon be history’

    The Norwegian Ambassador to Nigeria, Amb. Jens-Petter Kjemprud, on Thursday said that there were obvious indications that Nigeria would soon bounce out of her economic recession.

    Kjemprud, who made the prediction at the Nigerian-Norwegian Chamber of Commerce’s First Quarterly Business Roundtable in Lagos, expressed optimism at his assertion.

    The Ambassador said that it was imperative to Nigerians to know that Nigeria, like other countries of world, had from past experiences been in such situations, and would soon regain her balance.

    “We all know that Nigeria is currently in some sort of economic crisis, but we strongly believe that Nigeria will soon bounce out of its current economic recession.

    “We should not forget that the Nigerian economy has had its ups and downs, and would always bounce back. So, this time should not be an exception.

    “This is the more reason that we are soon going to be convincing more Norwegian investors and companies to know that Nigeria’s economy will soon bounce back,’’ he said.

    According to him, more Norwegian companies are currently closing into the existing investment opportunities in Nigeria.

    Kjemprud said that Norwegian companies and investors were becoming more aware of Nigeria’s market, population and mutually beneficial opportunities in Nigeria.

    The Ambassador said that his government’s cooperation with Nigeria had been thriving in the areas of off-shore oil sector, fisheries and shipping.

    He said that there was currently a large market for Nigeria’s fishery resources in Norway, which Nigerians should take advantage of.

    Mr Olusegun Awolowo, the Executive Director and Chief Executive Officer of Nigerian Export Promotion Council (NEPC), said that Nigeria was currently on a “Zero Oil’’ plan and export promotion.

    Awolowo noted that Nigeria’s problem over the years had been her refusal to promote the exportation of other products outside crude oil.

    According to him, promoting non-oil products exportation is critical to replacing what Nigeria has lost to over-dependence on crude oil.

    “We have seen one of the sharpest falls in oil income in Nigeria’s history. Nigeria has, therefore, commenced an Export Revolution.

    “Our vision is now to replace oil with the major national foreign exchange earner by growing non-oil exports.

    “Nigeria must survive in a world where we have no oil,’’ he added.

     

  • Ajimobi: Governing Oyo in period of recession

    Ajimobi: Governing Oyo in period of recession

    Oyo State Governor Abiola Ajimobi’s media aide Akin Oyedele highlighs the steps taken by the governor to woo investors, cut costs and promote good governance in the Pacesetter state.

    That the country’s economy is currently experiencing a downturn, a situation largely precipitated by a reversal of oil fortunes, is no longer news. No thanks to decades of overreliance on a monolithic economy and the utter relegation of agriculture, once the country’s cash cow.  Since this reality jolted everybody into retrospection, the federal and state governments have gone back to the drawing board to explore other means of revenue generation aimed at rejigging the floundering economy. Quite unsurprisingly, agriculture, the stone spurned by the country’s builders has now become the capstone of the building, nay the beautiful bride. At the end of a two-day national economic council retreat held in March, last year, it was agreed that each state should make specific commitments to crops in which it has comparative advantage and request Federal Government’s intervention.
    As a firm believer in the ability of the country to scale the pervading economic precipice, Oyo State Governor, Senator Abiola Ajimobi, had since the inception of his jinx-breaking second term taken several remedial steps to regenerate the state’s economy. Such pragmatic steps include the repositioning of the state’s Board of Internal Revenue Service to halt the hemorrhage and loopholes within the system. The move was also intended to expand the state’s tax remittance base by capturing companies currently evading this statutory obligation.
    The governor also strengthened the Bureau of Investment Promotion and Public Private Partnership to make business easier for prospective investors coming to the state, apart from mulling over granting of tax holiday to core investors. Other incentives being dangled at investors are easy acquisition of land and procurement of Certificate of Occupancy in record time.  The end result of these efforts will begin to manifest in the foreseeable future. And this will add fillip to the governor’s determination to grow the state’s internally generated revenue from the current N1.6bn to about N5bn in the next three years.
    In the furtherance of his multipronged approach to buoying the earnings of the state, the governor had embarked on foreign trips, not only to woo investors, but to understudy models that have helped other countries to get out of the mire.
    For starters, Oyo state is blessed with a vast landmass measuring 27,249 square kilometres and a population of about 10 million people, among which is a working population of 4.3m. The state is also proud to be a reservoir of skilled and unskilled labour ready to feed existing and potential industries. The large concentration of agriculture research institutes in Oyo is also a blessing capable of providing the needed intellectual support for the projects, including the renowned International Institute of Tropical Agriculture (IITA).
    Agriculture is the main occupation of the people of Oyo State. The climate in the state favours the sustainable cultivation of crops like maize, yam, cassava, millet, rice, plantains, cocoa, palm produce, cashew, soya beans, leafy vegetables, poultry and aquaculture among others, in commercial quantities. In fact, Oyo is the largest producer of cassava in the country, while the state is located in a strategic business hub that serves as a gateway to the Northern and Southern parts of the country.
    It is therefore, not fortuitous that the governor had made the exploitation of the agriculture value chain the fulcrum of his second term economic blueprint. Ajimobi is taking the bull by the horns to liberate the state from economic stagnation triggered by the dwindling revenue allocation from the Federation Account.
    Last year’s two-day NEC retreat in Abuja had coincided with the inauguration of a major agriculture initiative by the governor, tagged AgricOyo, which suggests that the governor had long before the FG’s initiative envisioned the agriculture rebirth. The initiative is targeted at creating one million direct jobs across the agriculture value chain.
    Before the launching, the governor had met separately with large gatherings of key stakeholders at different fora, including traditional rulers who are believed to be custodians of lands, agric experts and investors to harvest their input, ideas and suggestions.
    The launching, which was strategically held at Paago, an agrarian community in Oke Ogun area of the state, attracted investors, outgrowers, beneficiaries, institutional partners, outtakers, traditional rulers, and top officials of the state.
    At the event, the governor said that the project would reduce overdependence on oil, create wealth, alleviate poverty, encourage productivity, create jobs and bring about the overall socio-economic uplift of Oyo State. He told the gathering that farming was very profitable and vowed to do everything possible to make it attractive in Oyo State to diversify the state’s economy.
    It was this passion that inspired the governor to lead a delegation to Dublin, the capital and largest city of Ireland, in March, last year. The trip was principally aimed at partnering investors in the areas of agriculture, tourism, employment generation and regional development strategies, as well as information communication technology (ICT) and business process outsourcing. The choice of Ireland was informed by the country’s status as a leading agricultural exporter. Not only this, Ireland is the second largest exporter of software in the world and a major tourist destination.
    The governor’s trip was a follow-up to an earlier one by a delegation from Oyo State to the Irish government in December 2015. The delegation was then received by a team led by the country’s Minister of Agriculture, Food and the Marine, Mr. Simon Coveney. The discussions then centered on ICT, tourism and agriculture. To further cement the relationship, the Irish Ministry of Agriculture, Sustainable Food Systems Ireland and International Development Ireland Limited, in conjunction with Enterprise Ireland, invited the governor to Dublin last year to explore opportunities for collaboration between the country and Oyo State.
    Similarly, in August last year, the new agriculture initiative of the state received a boost with the proposed investment by an Australian agro-processing company, which has since acquired 50 hectares of land in the Oke Ogun area of the state.
    The new entrant thus swelled the list of Australian companies that have already entered into partnership agreement with the state government in mining, agriculture, education and vocational training.
    To underscore the preparedness of the company to hit the ground running, the company’s promoters had visited the governor in company with the Australian High Commissioner to Nigeria, Mr. Paul Leymann, in his office.
    Lehmann had announced at the meeting that the governor’s earlier visit to Australia had brought about fruitful agreement between his country and the state for mutually beneficial returns.
    The envoy said, “The visit of your team to Australia is quite appreciated and we are delighted to assure you that the relationship would enhance development in agriculture, mining and industry in Oyo State.”
    In another development, late last year, the state government sealed a partnership agreement with a Chinese conglomerate, China Polaris, estimated at about N636bn ($2bn), for the establishment of a free trade zone for the manufacturing of automotive products, solar power generation, among others.
    The first phase of the project comprising five factories and estimated to cost about N159bn ($500m) is expected to commence by the end of the first quarter of 2017, while the entire project has a two-year completion period.
    Tagged the ‘Polaris-Pacesetter Free Trade Zone,’ the project occupies a thousand hectares of land along the Lagos-Ibadan Expressway, Ibadan, and has been described by the governor to be ‘the new hub of the African economy’ when completed.
    In his avowed commitment to bequeath a lasting legacy on the state and to leave it more prosperous than he met it, Ajimobi has not taken his foot off the pedal as he continues to crisscross the globe in search of genuine investors that share his vision for the state.
    It is expected that as soon as these efforts begin to crystalize, the state economy will be revitalized and the citizens will be better for it. But then, as the saying goes, Rome was not built in a day, indicating that patience and support of the citizens are key factors to the successful implementation of Governor Ajimobi’s grand industrialization designs for Oyo State.

    • Oyedele is a Senior Special Assistant (Media) to the Governor

  • Minister to SON: assist to get Nigeria out of recession

    Minister to SON: assist to get Nigeria out of recession

    Minister of State for Industry, Trade and Investment Hajia Aisha Abubakar has urged the Standards Organisation of Nigeria (SON) to rise up to the challenge of helping Nigeria to get out of recession.

    She said SON could do this by making available to Nigerians its requisite technical skills and competence.

    Mrs. Abubakar spoke in Lagos yesterday, at this year’s SON’s Management Retreat.

    The minister, who was represented by Executive Secretary of the Financial Reporting Council Mr. Daniel Asapokhai, said SON had developed technical skills and competences, urging the agency to deploy them for economic growth.

    “You need to bring these to bear on your service delivery to Nigerians, particularly in promoting the diversification of the nation’s economy,” the minister said.

    The minister assured the SON that the Federal Government, through the Federal Ministry of Industry, Trade and Investment, would keep providing the  support and encouragement to serve the people diligently.

    He said the SON D-G and his team should make themselves proud business facilitators and positive change agents to  emerge as the most facilitative agency this year.

    The agency’s DG, Mr. Osita Aboloma, described the theme of repositioning for better performance, as relevant.

    He hoped the workers were better positioned to deliver as ambassadors of standards.

    He was confident they would help Nigeria out of the recession through improved performance, adding that the SON, with the collaboration of sister agencies, had done well so far.

  • Imperative of free public education, recession or no recession (2)

    The teaching profession is now much more complex than it was before the Nigeria/Biafra Civil War.

    In the first part of this article last week, we concluded that John Tosho’s verdict that provision of free and compulsory public education is one of the constitutional duties of governments could not have come at a better time. For far too long, many states had paid inadequate attention to provision of free education, just as many parents, particularly in the northern part of the country had hidden under the excuse that nobody could sanction them for not sending their children and wards to school. These attitudes had made it easy for children of school age to work as street traders in urban areas, instead of being in the classroom as should have been the case in a country that seeks to join the world of development. The outcomes have been existence in the 21st century of millions of totally illiterate children and, perhaps, of more millions without functional literacy in states where free education was provided half-heartedly by governments that could not politically afford not to provide free education but could get away with not enforcing compulsory education. The overall effect of decades of half-hearted free education has been under-preparation of young people for the challenges of living in the 21st century. Today’s column is about what needs to be done by governments and parents to ensure that investment in free and compulsory public primary education bring required benefits to the country.

    As important to citizens as ability to read and write is as one of the outcomes of public education, focus today will not be just on literacy per se but on functional literacy. When the Emir of Kano at a lecture at Oxford University recently raised the importance of literacy of millions of Nigerians in Arabic language, he was concerned with literacy per se, as ability to read and write in any language. But there is no doubt that literacy in Arabic in a country that conducts its life in Arabic is more functional than literacy in Arabic by someone who lives in a country where Arabic is not the lingua franca and only serves the purpose of religious education. While millions of Nigerians who can read and write Arabic  are theoretically literate, in functional terms, they may not be literate in Nigeria where the language of governance and business is English. Such people will, however, increase the number of literate men and women in northern Nigeria if the country adds Arabic to its official language or if any state in Nigeria declares Arabic as one of its official languages, the way English and Hausa are today in most states in the north and English and Yoruba are in the Southwest. But this is a digression that is handy to illustrate the difference between literacy qua literacy and functional literacy, i.e. form of basic education that, according to UNESCO, “stresses the acquisition of appropriate verbal, cognitive, and computational skills to accomplish practical ends in culturally specific settings.”

    Now that more parents will send their children to school to avoid being sanctioned for violating the constitution of the land, governments’ funding of education has to respond to UNESCO’s recommendation of percentage of budget required for developing countries. threshold for developing countries. School enrollment should be expected to rise by at least 25%, thus requiring more teachers, more classrooms, furniture, mouths to feed at lunchtime, and modern teaching/learning tools. Governments need to ensure that the learning environment is modern and pleasing to behold by teachers and learners. All public schools need to be conducive to learning. Using recession as excuse for not increasing allocations to primary education may no longer be good enough to explain why children of school age are vendors of local and imported or pirated commodities along highways.

    With respect to appropriate pedagogy, rote learning may no longer be useful for the new global civilisation of creative and critical use of information. Interactive, dialogical learning requires more capital-intensive teaching tools than blackboard and chalk. It requires, as has been demonstrated in more advanced countries, supply of technology-assisted teaching/learning tools, something that cannot be optimised without guaranteed access to electricity. It is risky to wait for the megawatts that had been on the list of government’s to-do programmes from Obasanjo to Buhari. There is thus a need for solar-powered schools and solar-powered laptops for students and teachers.

    Furthermore, curriculum planning requires new thinking. Apart from teaching of English and mathematics, other subjects offered should emphasise local issues: geography, history, natural science, and civics. The language of instruction in the first six years of schooling should be in children’s mother tongues while the language that holds the country together, English, is taught as a subject at every term in the six years of primary education. Mathematics must also be taught at every stage. Any state that desires to add Arabic to its curriculum may do this as optional language for students while states that share borders with Francophone countries and believe that French will be an enhancer of multicultural literacy may add French to their curriculum in the last year of primary school.

    Like everything else in life, excuses for not doing the right thing do not lead to positive transformation of any aspect of life. In general, our country and many northern states had given avalanche of excuses for not giving adequate attention to public education. This is despite governments’ preference to ignore evidence of outlandish consumption of public resources by political officers and top bureaucrats. We cannot ignore the fact that the rest of the world is leaving Nigeria behind, faster than it did at Independence and in spite of Nigeria’s great wealth from petroleum for decades. It is in recognition of the yawning gap between Nigeria and other countries that parents and politicians with deep pockets in our country send their children overseas for education.

    One level of education that has been ignored, even in states with over half-a-century of free education, is pre-school education. At present, this is being provided by entrepreneurs, who understandably make pre-school learning prohibitive for the average citizen. Given research findings that pre-school education is a major cognitive and social enhancer for children between 3 and 5 years of age, it is necessary for states to commit to providing access to pre-school learning to citizens. All advanced countries are already doing this, to remain competitive in a global market.

    Finally, regulation of private schools must be an important part of the functions of governments, especially local government. Most successful countries have moved away from the philosophy of education, curriculum, and pedagogy bequeathed by colonial governments. The teaching profession is now much more complex than it was before the Nigeria/Biafra Civil War. It is about time that National Certificate in Education was replaced by four-year degree programme in education. Our policymakers in the ministry of education may need to visit Scotland, Finland, South Korea, and Singapore, to find out why these places are global leaders in primary and secondary education.

  • Recession: Financial experts task FG on private sector involvement

    Some experts on Friday called on the Federal Government to involve the private sector in its new economic recovery plan for the needed foreign and portfolio investments, to bring the country out of recession.

    They stated this in at the Vanguard Economic Discourse themed, “The hard facts to rescue the Nigerian economy,’’ in Lagos.

    Mr Muda Yusuf, the Director-General, Lagos Chamber of Commerce and Industry (LCCI), said that the country would not experience any economic recovery without the involvement of the private sector.

    Yusuf stated that government should involve the private sector in the new economic plan to take the country out of recession because they were the ones that would bring in investment.

    He said that the key driver of investment into any country was confidence, adding that confidence building through good economic policies was needed for both foreign and portfolio investments.

    “We cannot get these investments to come into the economy without confidence,” he stated.

    The director-general said that getting the foreign exchange regime right was critical to confidence building, noting that no economy can live in isolation of other economies.

    Yusuf said that critical scarcity of foreign for manufacturing companies was affecting their production capacity to move on with their businesses, with some of them having to close down.

    He said that the policy had brought about all manner of underhand dealings, drop in remittances, dividends payout and drop in profits, among others.

    According to him, people have suffered serious loss transiting from the former foreign exchange rate policy regime to the new one.

    He stated that many businesses had collapsed because of inability to service off shore obligations and credit lines.

    Yusuf added that round tripping in the foreign exchange market was very high because the huge exchange gap and margin.

    “We need to fix liquidity issues in the foreign exchange market by allowing the market to play bigger roles, rather than regular CBN interventions,” Yusuf said.

    He added that the current monetary policy rate would not in any way help to rescue the economy, noting that policies and incentives determine the kind of Investment people pursue.

    Yusuf also said that government borrowing had become a major problem of investors.

    He said that government borrowing at 18 per cent, without risk, was crowding out the private sector with banks preference to invest in Treasury Bills and bonds, instead of lending to the real sector.

    “We cannot compete with the Federal Government in investment, banks invest in Treasury Bills and bonds, rather than borrowing to the real sector,”  he said.

    Yusuf stated further that high cost of business in the country, due to high inflation rate, was affecting the growth and development of industries.

    Also speaking, Dr Obadiah Mailafia, a former CBN Deputy Governor, said that there was the need for a national concensus with regards to national development, for the country to move forward.

    Mailafia said that the insecurity of lives and property and rise in crime rate was affecting economic growth and development and should be checked.

    He stated that the country was losing money with the closure of the Abuja airport following some international airlines decision not to fly to Kaduna, due to alleged security challenges.

    The former CBN deputy-governor said that the country must industrialise and improve on technology innovations or perish.

    “We are still very behind in the issue of industrialisation, technology and innovation and if we fail to industrialise, we will perish,” Mailafia stated.

    He added that youths involvement in the government’s economic recovery plan was low, in spite being the majority in the country’s population.

    Mailafia said that the country was sitting on a time bomb, if they were ignored, considering the rising unemployment rate.

  • Recession will end before December, says Fed Govt

    Recession will end before December, says Fed Govt

    Nigerians got yesterday some cheery news – the recession that has kept everyone panting will end before the year runs out.

    The yet to be passed 2017 Budget has been structured to achieve the goal, Budget and Planning Minister Udoma Udo Udoma told State House correspondents at the end of the Federal Executive Council (FEC) meeting.

    He said: “Yes, we are determine, to get the economy out of the recession before the end of this year. And the 2017 budget is structured to do just that.

    “So that is why we are anxious to get the budget passed so that we can begin the implementation and begin to take all the steps we need to get the economy out of recession.”

    The ministry briefed the Council on the National Bureau of Statistics Third Quarter GDP Report and the full report on 2016.

    “I also informed council of the release of the Economic Recovery Growth Plan which is already on the website of the ministry of budget and National Planning as well as the Budget Office,” Udoma said, adding:

    “With regards to the NBS report, as you are aware, the fourth quarter of the economy contracted by 1.3 per cent, which is lower level of contraction than the previous year and which indicates that we are already turning and we are beginning to recover even though we are still in recession.

    “And the overall result was better than what many people projected. The IMF report had thought the GDP for 2016 was going to be -1.8 per cent and it turned out -1.5, so that’s better than expected but we are not out of the woods.

    “It is encouraging but we have to do and continue to do more to make sure that we get the economy out of the recession this year.

    “So we are encouraged but we are even more energised to put in more effort in agriculture, which is doing very well to do even better. To put in more efforts in solid minerals to make sure that our infrastructure is revamped because that is what will stimulate our economy, if we continue in this way.”

    Udoma went on: “You saw yesterday the acting president went to break ground for the railway from Lagos to Ibadan all the way to Kano.  As you know, the economic recovery and growth plan focuses on three objectives; one is restoring growth and that is what we are determined to do.

    “Two, inviting our people; our people are our greatest resource and three, building a competitive economy because ultimately the economy cannot do well unless it is competitive.

    “And as you know the five priority areas that we have are one, stabilising the micro economic environment. Two, achieving agriculture and food security. Three, ensuring energy sufficiency – power as well as petroleum products. Four, improving transportation infrastructure and five, driving industrialisation, focusing on small and medium scale enterprises. So we are determined with this plan to make this economy great again. We are determined by the end of the plan to move from the negative growth that we experienced in 2016 to the growth rate of 7 per cent by 2020.”

  • Exploring ICT sector to fight recession

    Exploring ICT sector to fight recession

    Though oil prices have started rebounding, analysts have urged the Federal Government not to relent on its efforts to diversify the economy. One sector they say could change the narrative is telecoms sector. It can pull the economy out of recession, having defied the ravages of the economic donwturn. LUCAS AJANAKU writes that the government will need to play its role as business enabler to unlock the potential.

    Experts have said the  telecoms sector has the capacity to pull the country out of recession. What has been lacking is the political will and policies to drive the enormous potential of the sector to make this happen.

    According to figures from the Nigerian Communications Commission (NCC), the telecoms sector, the fastest growing in Africa, has recorded over $32 billion investment, over 152 million subscribers and close to 100 million internet subscriptions.

    Results of the 2014 rebasing of the economy indicated that the telecoms industry was contributing 10 per cent to the nation’s Gross Domestic Product (GDP).

    The NCC said if the objectives of the National Broadband Plan (NBP) are pursued doggedly, it would spur more development because broadband is a business enabler.

    President, Association of Telecommunications Companies of Nigeria (ATCON), Olusola Teniola, urged President Muhammadu Buhari to include ICT sector as part of his strategic economic diversification agenda because digital transformation is about technology and globalisation.

    Teniola, who is also the MD of Internet Solutions, said the Federal Government could seek assistance from global financial institutions such as the World Bank to develop the broadband infrastructure that will take the country to the next level of development.

    He said the sector could create additional jobs and other value addition to stimulate the growth of the GDP.

    CEO MTN Nigeria, Ferdi Moolman, said the government should cntinue to boost investment into the sector through well thought-out policies.

    While the telco said it is committed to pursuing its mission to provide the best data network to its over 60 million customers across the country, it, along side Pinet Infomratics and Airtel identified some factors are holding it back. These factors include but not limited to the following:

     

    Inflation

     

    Moolman said rise of headline inflation to about now18.72 per cent, according to the National Bureau of Statistics (NBS), is a major disincentive to investment.

     

    OTT

     

    According to him, there’s depletion of operators’ revenues by unlicensed providers of over-the-top (OTT) telecoms services that do not have any physical presence; nor pay any taxes; nor make any significant contribution to employment or other socio-economic objectives of government in the country.

     

    Forex scarcity

     

    Airtel CEO, Segun Ogunsanya and Moolman lament the inability of operators to access foreign exchange (forex). Moolman said this was particularly debilitating given that most of their input are sourced off-shore. This has very significantly increased both operating and capital expenses.

     

    Stunted tariff structure

     

    Despite these macro-economic challenges, telecom tariffs have declined significantly (over 67 per cent between 2007 and 2016) and data prices are amongst the lowest on the continent,Moolman added.

    Immediate past president, ATCON, Lanre Ajayi, said for the country to tap into the enormous potential of the sector, there was the need to resolve challenges facing the industry.

    He identified some of the challenges to include the National Broadband Plan; e-Government, National Critical Infrastructure; Frequency Management; Secondary  Spectrum Market; Free Spectrum; Infraco; Numbering Plan and regulatory independence.

    Others are facilitating low-cost finance for the development and production of local ICT products; leveraging Public-Private Partnership (PPP) to accelerate infrastructure development; and reclaiming and releasing of unused spectrum for trading or re-farming.

    He also stressed the need to pass into law, the Critical National Infrastructure Bill and implement the National Economic Council’s Resolution on Multiple Taxation, Levies and Charges on ICT infrastructure.

    There is also the need to review and amend the Taxes and Levies (Approved List for Collection) Act (Amendment) Order, 2015 as well as the implementation of the ‘Smart State Initiative’ in all the states of the federation in order to create sanity and properly streamline fees and levies chargeable from states.

    Ajayi also stressed the need to further educate the public of the legal implications of sites lockup as stated under the Criminal Justice Provision Act 2004.

    Sector analysts  say the slow growth of the ICT sector is a result of apathy towards indigenous products and services, lamenting that this had undermined patronage of local players in the  ICT sector.

    Experts say Nigeria loses about $2.8 billion yearly to uncontrolled importation of ICT hardware and software. These losses are in form of capital flight. The Federal Government should muster the political will to implement local content in the ICT sector to stop the avoidable forex losses.

    Addressing this challenge apparently necessitated a parastatal under the Communications Ministry, the National Information Technology Development Agency (NITDA) to establish software testing laboratory as well as a scheme to train 1000 software testers across the country.  It also plans to come up with framework for local software standards.

    The industry, under the present dispensation, is striving to encourage international brands to establish factories in Nigeria or partner with local operators by buying components of their systems that are produced by local manufacturers as well as maintaining in-country research and development departments for the purpose of product conceptualisation, innovation, adaptation and design development.

    Communications Technology Minister, Adebayo Shittu said this was to be part of measures to implement local content development policy to protect indigenous players in the industry, including the Small and Medium scale Enterprises (SMEs).

    On the Smart Cities initiatives of the Ministry, he said the Federal Government was working with telcos to remove all the bottlenecks militating against deficiency in broadband penetration in Nigeria.

    He said: “Some countries like Rwanda have already embraced the smart city initiatives and they are already reaping its benefits. I would want to enjoin the remaining states to also key into the initiatives that would ultimately make their states smart.”

     

    Unsolicited messages,

    cold calls

     

    Subscribers have continued to suffer in silence over the menace of unsolicited messages and cold calls.

    Shittu warned telcos to address customers’ complaints ranging from poor quality of services (QoS), network congestion, spam messages, billing for services never rendered, under declaration of tax and under payment of tax by companies which had impacted negatively on consumers’ satisfaction.

    Shittu said he had invited telcos to Abuja to address these issues else sanctions would be applied to make them do the right things.

    In response Value Added Services Providers Association of Nigeria (VASPAN) urged their members to show some level of restraints.

    The Executive Vice Chairman of NCC, Prof. Umar Danbatta said while the growth in the telecoms industry has continued to drive further growth in the economy, especially in financial services and e-commerce, the Commission has embarked on initiatives to further accelerate the growth into the future in addition to working with the government at all levels to address the identified challenges facing the operators.

    He said the acknowledgement of the various challenges being faced by the industry has also informed the unveiling of a roadmap for the industry, adding that the industry would be regulated for the benefit of all the stakeholders.

     

    Voice termination rates

    review

     

    The NCC said it has, however, hired PricewaterhouseCoopers (PwC) to, among other things, carry out an impact assessment on subsisting interconnect regime; identify shortfalls on its interconnection rate regime and provide workable solutions.

    It said this was the beginning of the process that would culminate in the review of mobile voice termination rates in the country.

    Danbatta, who gave indication to this at the Stakeholders’ Forum on the Cost Based Study for the Determination of Mobile Voice Termination Rate for Telecom Industry, said the review had become necessary in view of the changes in the sector since the 2013 review.

     

    Investments

     

    Telcos must continue to invest in the sector. For instance, MTN secured a 10-year national spectrum licence on a state-by-state as well as the Federal Capital Territory (FCT) for the spectrum band.

    It paid for 2 x 30 megahertz (MHz) in the 2.6 gigahertz (GHz) spectrum. Danbatta said it is a significant fillip to the realisation of the Eight-Point Agenda of his administration designed to transform the industry.

    It also paid N34billion to the National Broadcasting Commission (NBC) for the acquisition of 700 megahertz (MHz) broadcasting spectrum.

    The acquisition of Visafone Communications Ltd with its 800MHz frequency band is another strategic step, the telco, said would allow it to roll out 4GLTE services across the country and improve its contribution to the GDP.

    Moolman said the telco planned to have about 1,500 LTE collocated sites backhauled with fibre optics offering 4G VoLTE to its over 60 million customers.

    He said the 2.6GHz band guarantees superior performance for wireless networks, especially 4G LTE services.

    “With the 2.6 GHz band, we expect to roll out and provide the full range of LTE services to Nigerians, empowering Nigeria with the latest mobile broadband technology.

    “Our subscribers, especially those in clustered areas, such as the major cities, can expect distinct improvements in browsing speed, quality and experience. This means that they will have fast access to high definition video streaming as well as conferencing and calling, lag-free music streaming, and improved data uploads and downloads,” Moolman said.

  • Bouncing back from recession

    In order to fully understand the issues surrounding Nigeria’s economic challenges and to find out what the government was doing to take the country and Nigerians out of recession, I visited the Ministry of Budget and National Planning in Abuja recently.
    It occurred to me after my visit that in spite of the prevailing perception of lack of strategic policy direction aimed at reviving the economy, there are strong indications that the federal government and its agencies are working round the clock to pull the economy out of recession and set the country on the path of sustainable growth and development within the shortest possible time.
    I also observed that government efforts to revive the economy are not receiving commensurate level of awareness among critical audiences and stakeholders. As the government approaches its mid-term, it is highly recommended that the country’s growth and development initiatives should be vigorously promoted in the mainstream and international media to give Nigerians, foreign investors and our trading partners some hope for the impending economic revival.
    After more than a decade of seemingly steady economic progress, the Nigerian economy contracted and is currently in recession. This was attributed to both external and internal pressures which the country’s fragile mono-cultural economic fundamentals could not absorb.
    Several reasons have been adduced for the economic downturn, the most fundamental being the sharp drop in global oil prices and steep declines in domestic oil and gas production which resulted from the sabotage of oil export terminals in the oil-producing Niger Delta region. The crux of the matter, however, is our over-dependence on crude oil exports for government revenue and export earnings; consumption-driven instead of productive and investment-propelled growth and huge leaks in government resources through corruption and inefficient spending.
    All these factors combined to negatively impact government revenue and export earnings as well as the fiscal capacity to stimulate the economy during the period. Lack of fiscal buffers, unbridled corruption and reckless spending exposed the economy’s vulnerability to external shocks, and consequently constrained government’s spending capacity and a gradual movement towards recession.
    The dramatic fall in oil revenues has resulted in an equally dramatic fall in the revenues projected in the 2016 Budget to come from non-oil sources. This is because the fall in oil revenue has resulted in a serious reduction in Nigeria’s foreign currency earnings (95% of Nigeria’s foreign exchange earnings come from the oil sector).
    This shortage of foreign currency has affected the level of trade activities, the level of manufacturing activity and revenues from independent revenue generating agencies including Customs and the Federal Inland Revenue Service (FIRS). As a consequence of the foreign currency shortage, there was a concomitant shortfall in the level of non-oil revenues projected in the 2016 Budget. Invariably, as long as the non-oil sector is largely dependent on the oil sector for its foreign exchange requirements, volatility in the oil sector will affect the performance of the non-oil sector.
    As long as the crude oil enjoys fair pricing and production levels go up, with the consequent steady flow of revenue, diversification of the economy from dependence on oil can wait for another day. This is an economic challenge that we must overcome as quickly as possible. For example, turning Nigeria into the ‘Food Basket of Africa’ is one way to move away from our over-dependence on crude oil. It is indeed heart-warming to note that Nigerians are embracing farming in greater numbers in different parts of the country and turning it into viable businesses for our local requirements and export opportunities.
    Unfortunately, in the last few years, crude oil sales account for less than 10% of the country’s GDP, but contributes about 90% of foreign earnings in government revenue.  The non-oil sector which contributes about 90% of the country’s GDP contributes only about 10% of government revenue.
    To move away from the current state of recession and ensure that the economy does not slide into this condition in future, government decided on measures that will ensure the diversification of sources of revenue as well as opening avenues for critical investments. The core focus of this new thinking is on massive infrastructure development, return to agriculture and exploitation of solid minerals. The reason is basically that these focus areas have great potential for massive employment generation, enhancement of export activities and expanded foreign exchange earnings.
    Even the 2017 Budget is aimed at achieving economic growth, diversification, improving competitiveness, improving ease of doing business, creating more jobs and social inclusion, improving governance and security. Spending is targeted at areas that have quick transformative potential such as infrastructure and agriculture, manufacturing, solid minerals, services and so on.
    More fundamentally, government has come out with a set of plans to head off the economic headwinds. It started with the 2016 Budget when the federal government developed the Strategic Implementation Plan (SIP). The SIP was a short-term plan intended to keep the economy from further contraction by avoiding austerity measures and maintaining growth while articulating sector strategies that would form the basis of a medium-term development plan.
    This was followed by the Economic Recovery and Growth Plan (ERGP), a Medium Term Plan for 2017 – 2020 which builds on the SIP, and is developed for the purpose of restoring economic growth while leveraging the ingenuity and resilience of the Nigerian people. 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 bottlenecks that impeded innovations and market- based solutions.
    To give vent to the plan, 59 Strategies have been developed for implementation to achieve the major objectives of the ERGP.
    Out of that number, 12 have been prioritized based on their importance to the success of the plan. These include:
    ·  Restoring oil production to 2.2mbpd and reach 2.5mbpd by 2020
    · Privatizing selected assets
    · Accelerating non-oil revenue generation
    · Drastically cutting costs
    · Aligning monetary, trade and fiscal policies
    · Expanding Infrastructure especially Power, Roads and Rail
    · Revamping the four existing refineries
    · Improving Ease of Doing Business
    · Expanding social investment programmes
    · Delivering on agricultural transformation
    · Accelerating implementation of National Industrial Revolution Plan using Special Economic Zones
    · Focusing on priority sectors in order to generate jobs, promote exports, boost growth and upgrade skills.
    The key industrial and trade policy initiatives include:
    · Resuscitation of the Export Expansion Grant geared towards providing export policy orientation for foreign exchange earnings diversification and global competitiveness;
    · Strengthening the Presidential Enabling Business Environment Committee (PEBEC) to facilitate the improvement of the country’s business environment;
    · Leveraging ICT to improve global competitiveness of the country Establishment of an ICT Ecosystem
    · Expansion of Broadband coverage and establishment of “Innovations and Experience” centres and ICT clusters
    · Enhancing support to Micro, Small and Medium Enterprises to maximise their contribution to growth, employment and export earnings
    · Promoting the policy of Made-in-Nigeria
    To achieve these objectives, the federal government repeatedly made commitments to provide the leadership required to establish a well-governed society with stable macroeconomic conditions, and a dynamic, competitive environment that enables the private sector to thrive.
    Government is also determined to build strong institutions, but the point must be made that every Nigerian is a critical stakeholder in the task of nation building.

    •Braimah is the Chairman/CEO of Neo Media & Marketing, Ikeja, Lagos.