African Development Bank Denies Cancelling Loan To Nigeria

The African Development Bank (ADB) has denied allegations by media reports that it has called off its $600 million loan to Nigeria.

In a statement by the Senior Communications Officer  in the Country  Office in Abuja, Fatimah Alkali, it was made clear that the bank is set out to encourage the economic growth of the country.

Alkali said; “The African Development Bank wishes to categorically refute the statement that it has “called off loans to Nigeria”
“The African Development Bank is highly encouraged by the economic recovery of Nigeria from recession and salutes the government’s efforts towards diversification of the economy. The bank also strongly supports the Economic and Growth Recovery Plan of the Government and efforts to stem corruption and strengthen fiscal consolidation and efficiency.

“In November 2016, the Board of the African Development Bank approved a $600-million loan to support Nigeria’s efforts to cope with macroeconomic and fiscal shocks that arose from the massive decline in price of crude oil. An additional $400 million in support could be considered, if requested and approved by the Board, as part of a larger coordinated effort with other development partners, including the World Bank and the International Monetary Fund.

“The African Development Bank is in consultations with the Government on how best to continue its support for its laudable Economic and Growth Recovery Plan through investment projects that will help address existing structural challenges, including infrastructure, power, agriculture and support to boost private sector and job creation.

“The bank assures the Nigerian government of its full support for its continued reforms to diversify the economy and boost economic growth and development.”

Nigeria Will Never Return To Years Of Waste – Osinbajo

At the 2017 graduation of the Nigerian Institute of Policy and Strategic Studies, in Kuru, Jos, on Saturday, Vice President Yemi Osinbajo reeled out the various achievements of the Buhari administration, despite scarce financial resources, made more difficult by the squandermania of the Jonathan era.

He noted among other things, that despite the fall of revenue by 60 per cent, the Buhari administration started a series of bailouts for the States, to enable them pay salaries and pensions. The government was also able to provide about N1.3trillion for capital expenditure, the largest amount for capital in our nation’s history.

“For the first time in five years we saved $500million, and invested another $500million in the Sovereign Wealth Fund. Today our external reserves stands at $35billion the highest in the past four years.

“We must pay attention to what we are seeing today, and some of the shameless noises of those who brought our nation to its knees, many of whom still have looted funds in their possession, trying to rewrite history and hoodwink the populace again. We say never again.

I am going to focus on the economy, where we are, and where we are heading in the next 12 months. What are the policy choices we have made? Why have we made those choices? Are those policy choices working?

From the very beginning of our administration when Mr. President asked me to head the economic management team, he made it clear that in his view, the major reason for the slow development of our nation and the poverty of millions of our people, was corruption and mismanagement of public funds & resources. And that fighting corruption and mismanagement of public resources was as much an economic imperative, as it was a law and order issue. I agreed.

We, from that point, put in place structures that would ensure prudent and transparent management of resources. In July 2015, the President ordered that all MDAs funds should be paid into the Treasury Single Account. This ended years of MDAs keeping secret bank accounts, in some cases putting public funds in fixed deposit for interest far below market rates. Banks would then lend money back to government by buying treasury bills at substantially higher interest. Today, government knows exactly how much we have, and we are saving significantly.

Early in 2016, an Efficiency Unit was set up under the Federal Ministry of Finance to reduce wastage, plug leakages and foster greater fiscal transparency. The Efficiency Unit has enforced several deliberate cost-cutting measures including the removal or reduction of sitting allowances for civil servants in many cases, and saved over 1 billion a year, stopping the procurement of souvenirs, and printing for government programmes, we saved another N1billion.

By reviewing travel expenditures, and negotiating procurement discounts, we saved N15billion. We have also removed or reduced meals and refreshments for meetings, and saved another N1billion annually.

We stopped the siphoning of funds through ghost workers by insisting that all MDAs must be on the Integrated Payroll and Personnel Information System (IPPIS) across government, and also mandated the use of BVN. Over 461 Federal MDAs have been captured on the system thus far, with the objective being able to enrol all of them. We are now saving N25billion a month, from cleaning up the payroll in this way. The President has also ordered all Armed Forces personnel to be captured on IPPIS.

It is important to understand, what these measures to block leakages and stealing of public resources mean for economic performance. I will demonstrate that impact.

When we came into office, over 22 States were owing salaries. They were owing despite the fact that between 2011 and 2015, Nigeria earned its highest ever revenues from oil. Oil was selling at between $100 and $115 a barrel. Yet reserves between 2014 and 2015 fell from $35billion to $28billion in April 2015. When we came into office, oil prices fell as low as $28 a barrel, the unrest in the Niger Delta, especially the vandalization of pipelines and oil and gas assets reduced the production at some point by over a million barrels a day. Revenues dropped by as much as 60%.

But with 60% less revenue, we started a series of bailouts for the States, to enable them pay salaries and pensions. With 60% less revenue, we were able to provide about N1.3trillion for capital expenditure, the largest amount for capital in our nation’s history.

For the first time in five years we saved $500million, and invested another $500million in the Sovereign Wealth Fund. Today our external reserves stands at $35billion the highest in the past four years.

We have made the point, that Nigeria is not poor because it has no resources, it is poor because a lot its resources are stolen or mismanaged. We can do a lot more with far less, if we don’t allow stealing.”

Nigeria Among 10 Economies With Ease Of Doing Business

Nigeria was named among the 10 economies showing the most notable improvement in the World Bank’s Ease of Doing Business list published on Tuesday. It rose 24 places in the ranking of countries to 145th place. Nigeria this year introduced initiatives aimed at improving the business environment, such as new systems to speed up the processing of visas for executives.

 

 

Local and foreign business leaders have long complained that red tape, mismanagement and corruption have made it difficult to operate in Africa’s most populous country, which has the continent’s largest economy.

 

 

“Three Sub-Saharan African economies – Nigeria, Malawi and Zambia – made it to the list of 10 top improvers in 2016/17,” stated the report.

 

 

It said Nigeria made the process of starting a business faster by introducing the electronic approval of registration documents, improved access to credit information and introduced a centralized electronic system to pay federal taxes.

 

 

President Muhammadu Buhari said the report “reflects our efforts to make it easy for foreign business visitors to obtain visa on arrival, pass through our airports and do their businesses with ease and speed”.

 

 

The annual World Bank report covered the period from June 2 last year to June 1 this year.

The Sleeping Economic Power

The past of the country and its present, are so scary that one to wonder if that past is the future of Africa. It was the pearl of the Caribbean, a colonial possession of France that was the envy of all colonial powers

– British, Spanish and Portuguese. Then, it fought a brutal war against its colonial master, defeated an army Napoleon sent to restore slavery to the island and declared its freedom and independence in 1804. It tore out the white in the French flag to make its first national flag. Later the blue was replaced with black. According to Ernst Etienne, Haitian son of a clergyman, industrial engineer, “Haitians have not stopped declining since their great victory over Bonaparte’s army. Haiti once called the Pearl of the Antilles and the first independent republic of coloured people is today the poorest country on the American continent” (Page 10).

One did not just wonder if the past of Haiti would not be the future of Africa but for the fact that African countries have relentlessly been following the path that Haiti has been following for two hundred years since that 1804 de parathion of independence. Name an African country; it is in debt, dependent on foreign aid, ruled by rogues whose offsprings are cuddling expensive champagnes and moving around the world in expensive German or Italian wheels. Its people are dying of diseases whose cures are easily available, while their presidents go abroad for operations on their ladies fancy fashion demands.

Any Africa Country!
When I have nothing to do, I go and do it in a bookshop, but virtual and online. And the Kindle Store is unbeatable in books, magazines to browse and perhaps buy, or borrow if not sure of the possibility of buying because of cost or lack of funds.
This is how Haiti: The Sleeping Economic Power by Ernst Etienne hit me! Haiti, half of an island (and the more damaged half of the island for that matter), a sleeping economic power? I thought Nigeria was the sleeping Economic power. Or South Africa. Or Angola. Or the Democratic Republic of the Congo. Haiti? How Engineer Etienne, do you want to swing this?

This book begins with an engineering mathematics lecture in 1895, in which a student asked if “the professor thinks that an object that is heavier than air could be used as a means of air transportation in the years come” (Page 4). Impossible is the response of the professor and fellow students. Fast forward to 1903 and the Wright brothers who build a machine that takes people into the air and back to earth. What made the impossible possible?

“The strategy they used,” says Engineer Etienne, “was to put the problem on paper, to translate it into mathematical language, to cope up with a solution, to take this solution and apply it to a flying machine” (Page 6).

They are able to solve the problem by applying Bernoulli’s theorem to it. This deals with aerodynamics. “Following the example of scientists in 1903, it is time for us to put Haiti’s problem on paper and derive the mathematical formula to arrive at a solution which will allow the country to take its place among industrialized countries” (Page 11). Engineer Etienne then produces “the formula for the development of Haiti” as follows:
A=X1(C) + X2(E)-X3(L1)-X4(L2) where
X1 is the Selling Price of local products;
X2 is the selling price of exported products;
X3 is the Cost price of international items;
X4 is the Cost price of imported goods;
C is the Local consumption;
E is the Exported finished products;
L1 is imported items;
L2 is the imported finished products.
We can also write this formula in a more explicit manner:
A = (Sale of local products) + (Sale of exported products) – Purchases of imported items) – (Purchases of imported finished products). When the value of A is positive, we could say ‘Haiti is a developed country.’ (page 11) “This formula may also be seen as a triangle whose three sides are:
1. Haiti must produce a lot;
2. Haiti must export a lot;
3. Haiti must be imported a little” (Page 12).

This book was first published on November 15, 2015. It would seem that Engineer Etienne ignores countries that have used local consumption as the beginning of their industrialization. But this is really a minor matter. The point being made is that if you earn 600 units of whatever currency per month, you cannot develop no matter what foreign aid you are getting. No matter how many hours you spend on your knees or on the prayer mat or making sacrifices in form of whatever shrines, you cannot go forward and prosper like other countries that have developed.

In spite of this book being only 71 or so pages, it is impossible to do just for it. It needs to be read in its entirety. The book points out that waiting for economic aid from another country does not develop your country. Many writers have pointed this out both in Africa and outside of Africa. The book also insists that letting other countries/companies invest in your country.
On the role of mass literacy in the country, the example of Cuba is given. “… in 1960, the literacy rate in Cuba was 60 per cent, a level lower than Haiti’s in 2011 (62.1 per cent). In only one year, from January 1961 to December 1961, the literacy rate in Cuba increased to 96 per cent” (Page 35).

Those who give gifts that give them gifts in return! And it is not those to whom the gifts are given who given who give the givers gifts. It is the gifts themselves that do. Watch out for the gifts you receive!

There is nothing about corruption, preventing it, fighting it, resisting the war against it. Nothing because it is a distraction to concentrate on a crime instead of punishing the criminal and getting on with the business of applying one’s intelligence and one’s brain to solving the problem at hand. Corruption is a crime. Punish it and get on with the life of the country.

Also, there is nothing about prayers. Stop praying and apply your brains. Else pray God permits you to

Tony Elumelu Foundation Reveals Bigger Plans For Their 3rd Annual Forum

Chief Executive Officer of the Tony Elumelu Foundation (TEF), Mrs Parminder Obe, in a briefing in Lagos on Friday announced plan to host 1,300 African Entrepreneurs, Business leaders and Policymakers from 54 countries in Lagos. Mrs Obe said the 3rd Annual TEF Entrepreneurship Forum was slated for Oct. 13.

She said the 2017 invitation had been extended beyond the usual 1,000 Tony Elumelu Entrepreneurs to include selected SMEs, media, hubs, incubators, academia and investors from across Africa.

“Assembled SMEs will build networks, share knowledge, connect with investors and link with corporate supply chains.

“Since launching the TEF Entrepreneurship Programme and committing $100 million to empowering 10,000 African entrepreneurs in a decade, we have unleashed our continent’s most potent development force, its entrepreneurs.

“In just three years, our first 3,000 entrepreneurs have created tens of thousands of jobs and generated considerable wealth.

“On Oct. 13 and 14, the global entrepreneurship community will gather in Lagos to build a New Africa, a thriving, self-reliant continent capable of replicating the results of our ground-breaking programme.

“The two-day forum will feature plenary panels, master classes, sector specific networking opportunities and policy-led forums focused on enabling African business growth.

“This is the first year we have opened the forum up to include the full pan-African entrepreneurship ecosystem.

“In doing so, we are enabling African SME communities to come together and expand the possibilities for intra-African partnerships.

“I am looking forward to welcoming our invited policy-makers and investors to join us at the forum, as we empower the next generation of African business leaders,’’ she said.

Also speaking, Mrs Owen Omogiafo, the TEF’s Chief Operating Officer, said speakers at the forum would include Wale Ayeni of International Finance Corporation, Stephen Kauma, Afrexim Bank and Andre Hue, African Development Bank.

“Others are Stephen M. Haykin, USAID Nigeria, Heikke Reugger, European Investment Bank and Abdoulaye Mar Dieye, United Nations Development Programme,’’ she said.

Omogiafo said TEF’s long-term investment in empowering African entrepreneurs was emblematic of Tony Elumelu’s philosophy of Africa Capitalism, which positions Africa’s private sector, as catalysts for social and economic development.

She said the foundation, which was founded in 2010 by Tony Elumelu, was aimed at empowering a generation of successful pro-profit entrepreneurs who drive Africa’s economic and social transformation.

According to her, the foundation received 20,000 applications in 2015 from residents of 53 African countries out of which 1,000 applicants were selected, with Nigeria contributing 64 per cent.

“In 2016, 45,000 applications were received with Nigeria contributing 30 per cent with 1000 selected applicants.

“Agriculture leads the sectors represented with 26.67 per cent: a great number are into poultry and fish farming.

“Fashion and ICT followed in second and third with 10 and 8.8 per cent respectively.

“This year, we received 93,246 applications out of which 1,300 applicants had been selected in 52 African countries with 57.1 per cent from Nigeria for the forum.

“Entrepreneurs are coming from Kenya. Uganda, Ghana, Tanzania, Cameroon, South Africa, Rwanda, Botswana and Cote d’Ivoire,’’ she said.

Nigeria Won’t Break Up Under Me- Buhari

President Muhammadu Buhari has promised that despite the fragile unity of the state and calls for secession from certain quarters, Nigeria would not “break up under me.”

The President said, “In the past two years, Nigeria has recorded appreciable gains in political freedom. A political party at the centre losing governorship elections, National Assembly seats and even state assemblies to opposition parties is new to Nigeria.

“Added to these is a complete freedom to associate, to hold and disseminate opinions. Such developments clearly attest to the country’s growing political development.

“Recent calls for re-structuring, quite proper in a legitimate debate, has let in highly irresponsible groups to call for dismemberment of the country. We cannot and we will not allow such advocacy.

“As a young army officer, I took part from the beginning to the end of our tragic civil war costing about two million lives, resulting in fearful destruction and untold suffering. Those who are agitating for a rerun were not born by 1967 and have no idea of the horrendous consequences of the civil conflict which we went through.

“Government is keeping up the momentum of dialogue with stakeholders in the Niger Delta to keep the peace. We intend to address genuine grievances of the communities.

“Government is grateful to the responsible leadership of those communities and will pursue lasting peace in the Niger Delta.”

“The APC government’s rallying cry to restore security, rebalance the economy and fight corruption was not all rhetoric.

“The country must first be secured. The economy must be rebalanced so that we do not depend on oil alone.

“We must fight corruption, which is Nigeria’s number one enemy. Our administration is tackling these tasks in earnest,” he said.

The President highlighted some of the achievements of his administration in the last two years in the areas of security, economy, and the fight against corruption.

He said as the nation entered the second half of his four-year term of office, he intended to accelerate progress and intensify his resolve to fix the country’s challenges and problems.

On security, he said Nigerians must be grateful to the nation’s Armed Forces for rolling back the frontiers of Boko Haram’s terrorism, defeating them and reducing them to “cowardly attacks on soft and vulnerable targets.”

He thanked the country’s neighbours and the international community for the collective efforts to defeat terrorism.

“Government is working round the clock to ensure the release of the remaining Chibok girls, as well as other persons in Boko Haram captivity. Government will continue to support the Armed Forces and other security agencies to fight not only terrorism, but kidnapping, armed robbery, herdsmen/farmers violence and to ensure peace, stability and security in our country,” he added.

“Since December last year, this administration has produced over seven million 50kg bags of fertiliser. Eleven blending plants with a capacity of 2.1 million metric tons have been reactivated. We have saved $150m in foreign exchange and N60bn in subsidy. Fertiliser prices have dropped from N13,000 to N5,500 per 50kg bag.

“Furthermore, a new presidential initiative is starting with each state of the federation creating a minimum of 10,000 jobs for unemployed youths, again with the aid of CBN’s development finance initiatives.

“Power remains a huge problem. As of September 12, production of power reached an all-time high of 7,001 megawatts. Government is increasing its investment, clearing up the operational and financial logjam bedevilling the industry. We hope to reach 10,000 megawatts by 2020.

“Key priorities include better energy mix through solar and hydro technologies. I am glad to say that after many years in limbo, the Mambilla Power Project has taken off.

“Elsewhere in the economy, the special window created for manufacturers, investors and exporters and foreign exchange requirements has proved very effective. Since April, about $7bn has come through this window alone. The main effect of these policies is improved confidence in the economy and better investment sentiments.

“The country has recorded seven consecutive months of lower inflation, naira rate is beginning to stabilise, appreciating from N525 per $1 in February this year to N360 today. Broad-based economic growth is leading us out of recession.

“Furthermore, in order to stabilise the polity, the Federal Government gave additional support to states in the form of State Excess Crude Account loans, Budget Support Facility, and Stabilisation Fund Release to state and local government as follows: N200bn in 2015; N441bn in 2016; and N1tn in 2017, totalling N1.642tn.

Senate Summons Adeosun, Udoma Over Economy

The Minister of Finance, Mrs Kemi Adeosun and her Budget and National Planning counterpart, Sen. Udo Udoma have been summoned by the Senate to brief Nigerians on developments in the economy. Chairman, Senate Committee on Media and Public Affairs, Sen. Sabi Abdullahi, made this known when he briefed newsmen on Tuesday in Abuja.

Abdullahi said that the invitation of the ministers was to get assurance on measures being put in place to prop-up and continuously support the economy to forestall relapse to recession.

He recalled that it was on the floor of the Senate that Nigeria was declared to be technically in recession.

According to him, we had cause to discuss the issue of recession that came up last year.

“We are glad that we have at least exited recession by virtue of the 0.55 per cent marginal growth we have recorded.”

Abdullahi, however, said that there was need for managers of the economy to explain its state to citizens, especially with the issues of recession.

He urged the economy managers to step-up their jobs in order to consolidate current gains and avert any relapse to recession.

Seven Urgent Ways To Fix The Economy – Tinubu

Former Lagos Governor, Asiwaju Bola Tinubu was Principal Guest of Honour/Keynote Speaker at the 2017 Annual Dinner of the King’s College Old Boys’ Association (KCOBA) on Saturday, September 23rd, 2017 at King’s College, Lagos.

In the speech read on his behalf by one time Lagos Commissioner for Finance in Lagos, Mr  Olawale Edun, Tinubu among others offered ideas that may aid the urgent need for fixing the nation’s economy.

The seven suggestions by Tinubu are as follows:

 

Our current national economic model is but an old, crumbling house. Repairing this edifice is the greatest challenge confronting us.

NATIONAL INDUSTRIAL POLICY

We must press forward with a national industrial policy fostering development of strategic industries that create jobs as well as spur further economic growth. Whether we decide to focus attention on steel, textiles, cars, machinery components, or other items, we must focus on manufacturing things that Nigerians and the rest of the world value and want to buy.
We must partially reshape the market place to accomplish this. The federal government should institute a policy of tax credits, subsidies and insulate critical sectors from the negative impact of imports.

NATIONAL INFRASTRUCTURE PLAN

2. We need a national infrastructure plan. Roads, ports, bridges and railways need enhancing and new ones need to be built, the goal must be a coherently-planned and integrated infrastructural grid. A national economy cannot grow beyond the capacity of the infrastructure that serves it. Good infrastructure yields a prospering economy. Weak infrastructure relegates the economy to the poorhouse. Government must take the lead.

The focus on infrastructure has important corollary benefit. Federal expenditure for needed infrastructural spending h empirically proven in every place and in every era to boost recessionary economies and provide employment when sorely needed. Deficit spending in our own currency to advance this mission is neither a luxury nor a mistake. It is a fulcrum of and balanced and shared prosperity.

3. We must overcome the economic, political and bureaucratic bottlenecks preventing us from achieving reliable electrical power.

This is perhaps the single greatest impediment to economic advancement. The lack of power inflates costs, undercuts productivity, causing havoc to overall economic activity and job creation. Our economic situation is literally and figuratively in the dark.
The hurdles we face are not technical in nature.

We must convince those political and economic factors currently impeding our quest for reliable power to step aside that we may obtain this critical ingredient to economic vitality.

4. Modern economies are based on credit. However, credit for business investment is too costly in Nigeria.

The long-term economic strength of the nation is dependent on how we deploy now idle men, material and machines into productive endeavor. And this is highly dependent on the interest rate.

The CBN must cure its affection for high interest rates. Lower rates are required so our industrialists may borrow without fear that excessive costs of borrowing will consign them to irredeemable debt. The normal profit rates in most business sectors cannot support the burden imposed by current interest rates.

If our industrialists do not invest in more plant, equipment and jobs, the economy will stagnate. The banking system would have achieved its goal of low interest rates at the greater costs of economic growth. This is as misguided as trying to save a branch by chopping down the tree.

Consumer credit must be more accessible to the average person. The prevailing norm is for a person to purchase high -priced items such as a car in one lump sum. This is oppressive. It defeats the average person and constrains transactions in real estate, vehicles and appliances that could vitalize the economy.

5. The government-backed home mortgage system must be re-engineered.  Mortgage loan agencies must be better funded, and liberalize their eligibility requirements so that more people qualify. They need to provide longer-term mortgages with manageable interest rates. Government should provide the supporting guarantees to make such financing a reality.

By sparking the effective demand for housing, the overall economy is enhanced. The construction sector and the industries allied to it will surge.

Moreover, to the extent that a man has a house he calls his own, that man is content; his contentment and innate common sense will act as brakes against instability and reckless political conduct.

6. Also, a workable credit system lessens corruption. The current lump-sum payment requirement tempts people toward misconduct. They see no other way to secure such large sums. Their wages will not suffice. Thus, they either must steal the money, beg for it or forego the purchase. Having an accessible credit system that provides for periodic installment payments places a purchase within the reach of a person’s wages. They no longer have to equate being honest with doing without.

7. Agriculture remains the backbone of the nation. We must help the common farmer by improving rural output and incomes.  This is best done via ensuring minimum prices for crops strategic to food security. Here, we must revive an old practice and policy that served us well. Though effective, this policy was shunned because it conflicted with the free market totems that we were asked to erect against our own interests.
We must return to commodity exchange boards which will allow farmers to secure good prices and hedge against loss. An agricultural mortgage loan corporation should be inaugurated to further promote these goals.

Wale Tinubu Remains Oando’s Group Chief Executive

Despite the protests that took place outside the venue of the 47th Annual General Meeting (AGM) of Oando Plc, the company has insisted that Wale Tinubu remains its Group Chief Executive (GCE).

The clarification became necessary as angry shareholders had stormed the venue, attempting to disrupt the proceedings, following earlier petitions to the Securities and Exchange Commission (SEC), alleging lapses in its corporate governance.

Apparently foreseeing the crisis, Oando had moved the AGM to Calabar, Cross River State, but the move did not deter the shareholders, suspected to be “hired crowd” who were determined to have a leadership change.

As a result, proceedings at the meeting were delayed for about 15 minutes, even as shareholders inside the hall supported the motion on the agenda moved by the board.

But, in a statement, Oando explained that the protest took place outside the venue by non-shareholders as all shareholders were allowed access to the venue to raise their legitimate concerns to management and the board.

According to the statement, the protest lost steam after 10 minutes, following interventions from key representatives of the shareholders associations, who addressed the protesters asking that they raise their concerns the legitimate way by writing to the company.

Oando explained that the shareholder representatives further requested a quick resolution to the issues with the petitioners to enable Oando’ management focus on building the brand.

One of the shareholders, “Mrs. BisiBakare advised that shareholders resolve their disputes with the company in private to avoid unnecessary sensationalism which would in turn result in loss of money for the company and shareholders.

“As a reputable company, our approach is not to respond to every allegation in the media; allegations need to be delivered to the company in a particular format before we can respond. The petitioners requested a postponement of our AGM, but we provided the SEC with all the information required and we were cleared to hold the AGM.”

On the issuance of dividend, Tinubu said: “We reacted to the 2014 fall in oil price by providing a detailed restructuring plan which saw us reduce our overall debt by over 40 per cent. Following the completion of our strategic deleveraging initiatives, we have evolved into a leaner, but more focused organisation with two core dollar earning entities.”

However, the leader of the protesters, Clement Ebitimi, said: “We are shareholders and stakeholders of Oando Plc. We have read several newspaper reports on allegations of gross mismanagement by the present management of Oando Plc.

“For the past three months, there have been reports of huge financial mismanagement, very high debt and cooked books by Oando.“As it stands, Oando is in a very bad shape, although the company’s report points to the contrary. Despite these official denials, shareholders have lost a fortune with the shares of the company plummeting to the bottom.”

Source: The Guardian

Economy: For The Love Of Nigeria

The Nigerian economy certainly will break free and soar. Apart from the short-lived oil boom in the 1970s when per capita income peaked in 1977, the economy has been chained down by macroeconomic instability arising from the excess fiscal deficits inherent in the mishandling of public sector oil export proceeds. Refusal to recognize the deficits officially till date does not matter: their poisoned fruits including the poor health of the national currency, the economic lifeblood, are not hidden.

After the discontinuation of the Bretton Woods system of fixed exchange rates in 1971, different countries experimented with various exchange rate fixing methods, but by 1979 the managed float system (MFS) had gained widespread acceptance among the world’s leading economies. However, the Nigerian authorities spurned the MFS and have continued till date to experiment with a multiplicity of methods with some of them being tried and dropped only to be re-adopted and in turn dropped again because of their unfavorable economic impact. The latest is the Importers and Exporters segment exchange rate adopted in April 2017. The common feature of all the ephemeral exchange rate mechanisms is the CBN’s tight hold on Federation Account (FA) oil export proceeds, which have accounted for over 50 per cent of the annual budgets on paper since 1975.

Analytically, to implement over a long time budgets in which realised non-oil revenue amounted to under 50 per cent while the balance was made up of the mere foil (so to speak) of the withheld FA oil proceeds would swathe the economy with the characteristic features of excessive fiscal deficits as attested to by persistent macro economic instability experienced down the years. Given the unwillingness to stop withholding FA dollar allocations, the root cause of the instability, the economy became enfeebled and gaspingly reached for the International Monetary Fund/World Bank (the undertakers of poorly managed economies) 15 years into experimentation with all manner of exchange rate fixing mechanisms which focused economies had long jettisoned. The Bretton Woods institutions grabbed the opportunity to position themselves as the unseen hands behind the monetary and fiscal measures that were geared to exploitatively dissipate the FA dollar accruals being withheld by the apex bank. That was not surprising because the IMF/WB are two-faced and double-dealing institutions: they take economically correct (and at worst ambiguous) positions in the open but suborn behind the scenes implementation of ruinous measures.

For example, during the second coming of Obasanjo, the fiscal/monetary authorities made a singsong of IMF/WB support. But when the WB was confronted that to withhold FA dollar allocations and to simultaneously substitute in their place funds furnished by the CBN not only amounted to harmful proportionate apex bank deficit financing of the budgets of the tiers of government but also contradicted economic best practice, the WB replied that the procedure was improper. (The Opinion page of The Guardian of 23-24/6/2014 contains a reproduction of the exchange). The response echoed the statement by the WB President in Abuja in 2006 that the IMF/WB do not impose fiscal/monetary reforms on countries as they possess the sovereign right to decide such matters. However, the double-dealing IMF/WB had no qualms trampling on Nigeria’s sovereignty in order to exploit the improper practice when they imposed as conditionalities for the country’s external debt exit in 2006 the re-adoption of the ruinous wholesale Dutch auction and release of part of withheld FA dollar accruals to bureaux de change, a measure meant to undermine the economy. The IMF/WB were also instrumental to CBN’s accumulation via the Debt Management Office of a fake national domestic debt (NDD) made up of mopped and sterilized excess liquidity funds. The NDD, which amounted to #12 trillion last March, is largely responsible for raising the debt service to revenue ratio to the unsustainable level of over 40 per cent.

Now, what did the IMF/WB prescribe for the gasping Nigerian economy after 15 years of disastrous experimentation with all sorts of exchange rate mechanisms discarded elsewhere? It was Structural Adjustment Programme. According to Chapter 1 of Adeyemi: Moving Nigeria Forward the Development Planning Approach (Second Edition), SAP’s fiscal/monetary objectives inter alia were to drive non-inflationary growth based on the naira’s true scarcity value under a regime of curtailed fiscal deficits and a restrictive monetary policy. The promise of SAP was ignored by the government, which continued to drown the economy in excessive fiscal deficits that were officially unrecognized. Surely, the National Planning Commission will not controvert that the SAP prognosis was economically correct and became imperative the very moment forex accrued directly to government coffers and also that the naira remains scarce in government’s multiple currency revenue baskets even today. The true scarcity value of the naira required to drive economic efficiency and productivity will only emerge through a single forex market operated under the MFS. Such a forex market necessitates the abandonment of withholding of FA dollar allocations and their simultaneous replacement with apex bank deficit financing.

Pertinently, in August 2007, then CBN governor confessed that both the naira and public sector forex had not been (and are still not being) managed as obtained in successful economies. Although he set a date for the takeoff of an embryonic MFS to enable FA beneficiaries to convert dollar allocations in the secure form to non-inflationary naira revenue, he was browbeaten by the Presidency and developed cold feet. Ten years on and with the withholding of FA dollar allocations still firmly in place, consistently disappointing economic results have led to frequent changes of fresh exchange rate fixing mechanisms. In the past decade despite “CBN’s external reserves” peaking at over $62 billion just as crude oil prices surged to over $100/barrel over a considerable period, the naira has slid from 126/$1 to between 356/$1 and $500/$1; inflation rose to over 16 percent; real sector operators have been priced out of bank credit notwithstanding over 70 trillion of idle banking sector lending potential; unemployment has kept rising with the absolute level now put at over 75 per cent; the FGN domestic debt stock rose from #2 trillion in 2007 to #12 trillion as earlier noted; debt service to revenue ratio at over 40 percent has become unsustainable; all kinds of infrastructure dilapidated; and the GDP has declined for five consecutive quarters by last March. Amazingly, selling off public sector forex for largely unproductive use has become the CBN’s full preoccupation.

Amidst all this, it is not clear if the FA dollar-withholding Buhari administration and the two-faced IMF/WB secretly struck the new game plan playing out in the Federal Ministry of Finance and the Ministry of Budget and National Planning (MBNP). To wit, unable to impose economic reforms on the Buhari administration, the IMF through its 2017 Article IV Consultation on March 30 and again on August 2 expressed fears that under unchanged fiscal/monetary policies, the naira remained overvalued and that the 2017 fiscal year would barely post 0.8 percent growth rate that would not make a dent on the waxing unemployment rate. The IMF therefore strongly recommended unification of the naira exchange rate through a single forex market. But totally unmoved as if dancing to the beat of the secret game plan, the FMF minister dug deeper and further adorned the existing policies by securing approval of the Federal Executive Council in June to refinance naira-denominated Treasury Bills into dollars at 7 per cent interest in preference to domestic offerings that attract between 13 per cent and 18.5 per cent. The minister announced that the administration had decided to borrow more offshore and less at home. The $3 billion to be realized from refinancing the TBs and future external borrowings will be added to “CBN’s external reserves” for dissipation in the segmented forex market windows. Presumably, should the administration (present or future) fail to earn enough forex to service and redeem the TBs and other external borrowings, the association of dollar lenders (as with the previous external debt trap) would hire the IMF/WB to garnishee government, impound its assets wherever they may be found on the globe and formally re-colonise Nigeria. Does FEC approve? The FMF proposal is not beneficial to the generality of Nigerians. The NASS should, therefore, dismiss this negative solution to the country’s economic problems.

Similarly, on August 9, the FEC approved 2018-2020 Medium Term Expenditure Framework and Fiscal Strategy Paper. With the exception of reducing the projected economic growth rate in 2018 to 3.5 per cent, the MBNP left the Economic Recovery and Growth Plan (ERGP) untouched. Given the gap between the planned ERGP indices and segmented market naira exchange rates as well the levels of inflation and lending rates eight months into the 2017 fiscal year, the MBNP minister does not require a seer to tell him that the ERGP under existing policies cannot but fail. Does FEC disagree?

The FEC should note that the withholding of FA dollar accruals and experimentation with numerous exchange rate fixing methods with the exception of the MFS in the last 46 years have produced laggardly and disastrous economic results. The FEC should, therefore, demonstrate its love for Nigeria by adopting completely painless fiscal and monetary reforms without further delay. The required step is to direct the CBN to take immediate action and put in place a single forex market using the managed float system in order to quickly establish the true scarcity naira exchange rate as the IMF/WB intended in 1986. But the Bretton Woods institutions did not propose anything extraordinary because, but for interference by the federal executive arm, given the country’s multiple currency revenue profile, faithful implementation of the provisions of the CBN Act 2007 (or even any previous version of the Act down to the 1958 Ordinance) would deliver the true scarcity naira exchange rate.

The expected benefits of the recommended reforms include inflation rapidly sinking to 0-3 per cent, lending rates crashing to 5-7 per cent as in competitive economies, the exchange rate staying stable, phenomenal increase in bank credit to the economy, reinvigorated productive economic activity and achieving double digit GDP growth rate. That is the basis for the economy to soar to a very great height

 

 

Source: The Guardian

Drug Makers Plan To Boost Economy With Expo

As part of efforts to make Nigeria self-sufficient in medicines production and distribution as well as capture new markets beyond the shores of this country and Africa, the Pharmaceutical Manufacturers Group of the Manufacturers Association of Nigeria (PMGMAN) has concluded plans for the Nigeria Pharmaceutical Manufacturers’ Expo (NPME) 2017.

The NPME described as the biggest International Pharma Manufacturing Exhibition in Central and West Africa is scheduled to hold from August 30 to September 1, 2017 at New Haven, Oba Akinjobi Street, GRA, in Ikeja, Lagos State.

Delegates are expected from across the continent, including from Ghana, Mali, Chad, Cameroon, Equatorial Guinea, Central African Republic, Senegal, Morocco, The Gambia, Ivory Coast, Niger, Burkina Faso, Algeria, Benin, and South Africa.

Executive Secretary, PMGMAN, Dr. Obi Peter Adigwe, told journalists that the Expo is billed to attract close to 200 exhibiting companies and nearly 10,000 pharmaceutical and related sectors’ trade professionals from across the region.

This year’s edition of the NPME with theme “Increasing access to health care in Nigeria: Strategic partnerships to achieve Medicines’ Security and National Self Sufficiency” is expected to surpass all stakeholders’ expectations. This is due to the robust and comprehensive advocacy by PMGMAN, which has resulted in significant advances in the pharmaceutical manufacturing policy landscape, in Nigeria as well as on the Continent.

Acting President, Prof. Yemi Osinbajo, had earlier issued an Executive Order on support for local content in public procurement, directing the mandatory patronage of locally manufactured medicines by all government Ministries Departments and Agencies (MDAs). This policy is expected to accelerate growth and development of the local pharmaceutical manufacturing sector. This will, in turn, assure national medicines’ security as well as boost self-sufficiency in the production of medicines. Other positive outcomes associated with these policies include the stimulation of considerable employment in the sector. The policy will also lead to increased inflow of foreign direct investment as well as facilitate the export of Nigerian medicines to neighboring countries.

To build on this, the West African Pharmaceutical Manufacturers Association (WAPMA) President and PMGMAN Chairman, Dr. S. Okey Akpa during his presentation to the Economic Community of West African States (ECOWAS) Health Ministers’ Assembly, urged members nations, as well as development partners to support the on-going collaborative efforts to exponentially increase manufacturers’ capacity on the continent. This, he argued was the most sustainable manner to guarantee access to high quality, affordable medicines within the region.

Another recent development that demonstrates the significant improvement in local pharmaceutical manufacturing is the Public-Private Partnership (PPP), signed by the Federal Government with a local firm, to produce vaccines in Nigeria. While signing the agreement on behalf of the government, Minister of Health, Prof. Isaac Folorunsho Adewole, stated that the need to ensure medicines’ security for the nation was a key factor that underpinned the partnership. Adigwe said these policy reforms represent only a fraction of the strategic engagement roadmap developed and initiated by the group to foster a favorable policy environment for local manufacturers.

He added that this year’s theme was carefully formulated to ensure the timely involvement of all relevant stakeholders in an industry he described the jewel of the nation in terms of criticality and potential profitability. Adigwe further indicated that favorable government policies together with the right local and international partners were key factors that could bring Nigeria’s pharmaceutical manufacturing industry a stone’s throw from the Indian model where pharmaceutical manufacturing has become a major contributor to India’s $10 trillion economies.

NPME traditionally showcases a wide range of equipment and inputs, which cover the entire industry, including allied industries such as food, nutrition, cosmetics and others. Investors, pharmaceutical processing machinery and service providers from a good number of countries on five continents have already indicated their participation in this year’s NPME. Additionally, pharmaceutical, healthcare, veterinary, food & beverage, and cosmetic finished products manufactured by local manufacturing companies in Nigeria will be on exhibition at the Expo.

It will be recalled that PMG-MAN is the umbrella body of the local manufacturers of medicines and healthcare products in Nigeria. With over one hundred and twenty members who own and operate established factories manufacturing life-saving medicines, it is clear that the group is critical in ensuring that Nigerians continue to have access to high quality and affordable medicines. With its focus on Good Manufacturing Practice (GMP), the production of high quality, affordable medicines remains a key objective of the group. Job creation and the development of local contextual capacity in various relevant areas, is another major focal point for companies that manufacture medicines and allied products locally. The pharmaceutical manufacturing sector of Nigeria also contributes to nation building and economic development with aggregate investments in excess of N300 billion.

Source: The Guardian