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

Economy: FGN As Unrepentant Saboteur

Following nearly two years of failed efforts to break through the fence of conditionalities for the release of multilateral loans being dangled by the IMF/World Bank and the European Union, the Finance Minister Kemi Adeosun, threw up her arms and confessed at the quarterly business forum held in July at the Aso Villa, “We cannot borrow anymore; we just have to generate funds domestically enough to fund our budget.” She explained that the administration had considered using external loans in the short term because required funds could be raised more rapidly than through government’s medium term plan of mobilising increased revenue. The minister added that another reason for seeking external loans was the desire to deliver essential services in greater volume than could be carried out with the small size of the country’s annual budget whose largest chunk goes to salary payments. (We recall the additional argument that multilateral loans were cheaper than domestic loans.) The retraction of the minister’s declaration shortly after was an excuse, given in advance, because of the looming failure to meet the targets set in the Economic Recovery and Growth Plan (ERGP).

This newspaper hereby reaffirms its earlier position that the economy has the stamina to dispense with external budgetary support and to still out-perform the ERGP as proposed if (and only if) the four decades-long business-as-usual sabotage of the economy through the implementation of inappropriate fiscal and monetary measures, does stop. The editorial gave sources of revenue being diverted elsewhere to the neglect of delivering essential services. But let it be stressed that the country has a mixed enterprise economic system. The government does not require gigantic budgets in order to create the conducive environment that facilitates participation by the private sector (which is at present more than 10 times the size of the public sector) in delivering basic projects and essential services.

Nonetheless, it is pertinent here for the minister to explain to Nigerians why the “small-sized budgets” omit the gargantuan proceeds that accrue from the difference between the FAAC exchange rate and the depreciated exchange rate at the auctions of withheld Federation Account dollar allocations. Light should be beamed on questions such as, (1) Are all the proceeds looted? (2) Is such wholesale looting the reason for the perpetuation of the auctions? (3) Does the Federal Ministry of Finance not breach the annual Appropriation Act when it gets the naira depreciated, nay, devalued in this manner thereby bleeding the economy? The auctions sabotage the national currency and thereby prevent efficient working of the economy. The baneful practice should therefore stop.


As if she had a premonition of the above questions, Adeosun at the business forum soft-pedalled the need “to plug all the stealing and all the waste” but blamed tax evasion by the Nigerian public for the low tax/GDP ratio, which in turn accounted for the small size of the national budgets and government’s incapacity to deliver basic projects. After expatiating by decrying Nigeria’s low tax to GDP ratio of six per cent for being far behind the sub-Saharan average of 17 per cent, Asia’s figure of 26 per cent and the score of 30-35 per cent for most of the emerging markets and advanced countries, Adeosun commended the administration’s efforts “to achieve economic prosperity by trying to benchmark ourselves against more developed countries and address problems in a more fundamental sense.”

In truth, for purpose of comparison between two countries, tax/GDP ratios need to be adjusted mainly because the level of tax takings depends on earned incomes and individual country tax policies. There are economically prosperous tax havens and oil-rich countries that impose very little or no tax at all on the populace. Moreover, tax holiday and low tax level are part of a package of incentives for luring and retaining investors to promote economic prosperity. In advanced countries, one strategy for combating economic recession is to reduce and refund taxes to enable businesses to produce and consumers to go on a buying spree. Thus, while tax evasion should not be condoned, the FGN is sabotaging full blast economic recovery by embarking on intense tax collection drive at a time the Nigerian economy is in recession or on the verge of emerging from it. Because IMF/World Bank and the European Union have ulterior motives, the government should weigh the consequences of any advice emanating from them.

Clearly, the choice of tax/GDP ratio as benchmark indicator of economic prosperity is inappropriate. However, a useful indicator for gauging economic prosperity is the volume of bank credit as a proportion of GDP. This indicator points to the intensity of economic activity that in turn is dependent on the tripodal factors of low-interest rate, low inflation and a realistic exchange rate that is stable. Does accessed credit volume matter? Yes! For instance, in the past five years or so, Nigeria’s Micro, Small and Medium Enterprises numbering anything from 17 million to 34 million have yet to fully utilise the CBN’s N220 billion Development Fund (that averages N6,470 per establishment) owing to an unattractive interest rate of 9 per cent excluding padding. Such a meagre loan volume would not lift economic activity. And it has no tax value.

So, to pan to the clarifications sought from the minister above, the greatest form of economic sabotage committed by the Federal Government, the exclusive monetary authority and the biggest public spender, over the years is the refusal to discard withholding of Federation Account dollar allocations and thereby blocking the road to the tripodal factors. By the same token, the FGN jettisoned the realisation of CBN’s statutory object of guaranteeing price and monetary stability, which alone would prompt cheap bank credit and extensive private sector investment to raise domestic bank credit to GDP ratio. Result? In 2014, the full year before crude oil prices began to dive, World Bank data show domestic credit provided by the financial sector as a proportion of GDP stood at Nigeria (22), Malaysia (140), Japan (where central bank rate may be as low as 0.1 per cent and inflation for many years is low with occasional negative inflation or deflation) (374) and U.S.A. (253).

Apart from frustrating the tripodal factors, the withholding of FA dollar allocations since 1971 has left in its wake other abuses that have thoroughly sabotaged and distorted the economy. Real production has ceased to be the goal of the profitable business undertaking. The poisoned harvest includes multiple currency practices (with deep-rooted dollarization as offshoot) and custom-made fragmented forex windows for palming off the bulk of the withheld FA foreign exchange. Implication? One, there is the absence of a single forex market to coalesce a realistic and stable exchange rate centred on the Appropriation Act (AA) exchange rate. The AA exchange rate is consistent with the managed float system and necessary in the country’s model of economic planning. The AA rate is the nearest to the idealistic freely floating exchange rate routinely given by IMF/WB as a conditionality. Yet, the so-called open Western economies do not operate a freely floating exchange rate system. The lack of a realistic and stable exchange rate breeds persistently under-performing economy. Now that government seeks to validate its proposed measures by using bench marks of advanced countries, the administration should name any prosperous countries that operate a confused forex market system similar to Nigeria’s method, which literally and idiomatically sabotages and shoots the country in the foot.

Two, the Buhari administration’s expressed intention to borrow $4 billion from the local debt market evidences the multiple currency practices. Shamefully, it connotes the co-existence of two monetary bodies. One body governed under the 1999 Constitution, has the naira as a national currency. Another body comprising cheaters and haters of Nigeria adopts as its currency the alien U.S. dollar and wangles its stock of dollars largely from withheld FA dollar allocations against Nigeria’s interest. This unwholesome origin of the domestic dollar debt market makes it an integral part of “all the stealing and all the waste” which the Finance Minister conveniently (or is it collusively?) downplayed at the business forum as noted earlier. Thus, in place of real production that boosts overall economic prosperity, the manifest avenues of making easy money have become multiple currency practices, dollarisation and domestic dollar debt market. Being unproductive practices that sabotage the economy, they should be stamped out.


Ordinarily, the country’s public and private sector forex earnings should flow directly to fund eligible imports while the surplus forex is kept as Federal Government-owned external reserves by the CBN. But in Nigeria’s upside-down forex arrangement, the external reserves have been confiscated by the apex bank. They are called CBN’s external reserves. The CBN acquires its external reserves through printing by fiat purported naira equivalent figures that catch the apex bank’s fancy.

The presence of two monetary entities technically means the Federal Government wittingly shares Nigeria’s sovereign responsibilities and independence with imposters. Under the Oath of Office of the President contained in the 1999 Constitution, to surrender sovereign functions or part thereof amounts to gross misconduct. Therefore, the NASS should urgently draw the attention of the President to the unconstitutional development, which has thoroughly undermined national economic advancement.

All in all, the numerous policies and measures, acts and practices of economic sabotage by the Federal Government (a few of which are highlighted above) should now cease. Towards that end, the Cabinet and Economic Management Team should without delay direct both the FAAC to share FA receipts in the very currencies the amounts accrue and the CBN to operate a Single Forex Market system in the manner repeatedly outlined by this newspaper.


Source: The Guardian

No More Borrowing For Nigeria- Finance Minister

The Minister of Finance, Mrs. Kemi Adeosun, Tuesday warned that the country must not borrow more to fund its budget and should instead raise money internally to fund the budget.
This is just as Acting President Yemi Osinbajo also solicited the co-operation of the private sector in the federal government’s quest for a better country, assuring it that the government has the will to turn the country around within 18 months.

The remark by the minister was a pointer that the country might shelve its planned $2 billion loans from the World Bank, Reuters reported.
Africa’s largest economy is in its first recession in 25 years, and had planned to borrow extensively from overseas to fund a record budget aimed at helping the country spend its way out of its economic doldrums.

But plans for lenders like the World Bank and African Development Bank (AfDB) to loan at least $2 billion to Nigeria have been stalled for over a year, as international organisations’ frustrations mounted at the country’s refusal to impose key fiscal reforms such as allowing its foreign exchange rate to float freely.

Adeosun, who made the comments while speaking at the quarterly business forum held at the Banquet Hall of the Presidential Villa in Abuja, suggested that Nigeria will no longer seek such loans, or an additional $1.5 billion it had planned to raise from international debt markets.
“We cannot borrow anymore, we just have to generate funds domestically to fund our budget. Mobilise revenue to fund the necessary budget increase,” she said.

In May, the Director General of the Budget Office of the Federation, Mr. Ben Akabueze, had said the country has a shortfall of $7.5 billion for its 2017 budget expenditure, adding that this would be addressed with $3.5 billion from the aforementioned loans and debt.

The government also planned to raise $4 billion from the local debt market, he said at the time.
But Adeosun said the government’s medium-term plan was based strongly on increasing revenue mobilisation.
She stressed that increasing the country’s revenue was not something that could be attained instantly.
“For example, in some cases like tax collection we needed data, we needed to sign some treaties and we needed tax policy reforms. We have been working hard on these measures.

“Our focus on revenue is total. Revenue generation is not as rapid as raising debt but it is permanent. Increased revenue will ensure sustainability, will prevent us from falling into a debt trap and will reduce our debt service to revenue ratio,” the minister added.
Adeosun also expressed concern over the government’s inability to deliver essential services due to financial constraints, which she blamed on the nation’s small annual budget.
Putting the nation’s annual budget as a percentage of gross domestic product (GDP) at six per cent, she said this was significantly low, adding that it was the lowest in sub-Saharan Africa.

According to her, the situation was so precarious that salary payments take the largest chunk of the annual budget, explaining that the development was largely caused by non-payment of taxes by the Nigerian public.
She said the by-product of tax evasion was the incapacity of the federal government to deliver basic projects aimed at improving the living standards of the people, even as she emphasised the drive of the government to generate more revenue to alter the status quo.

“Our budget is significantly lower relative to GDP. We are currently at six per cent. It is lower than all our peers. We are currently at six per cent and that is the lowest in sub-Saharan Africa and one of the lowest in the world.
“Our budget size is too small and that means we can only pay salaries in some cases and we don’t have money to deliver essential services.

“There simply isn’t enough money in government to do what government wants to do. I am sure you will say that is because people are stealing or because you are wasting money, but I am saying even if you plug all the stealing and all the waste, the budget size is not big enough and that is because we are not paying enough in terms of taxes, or we are not collecting enough in terms of taxes.

“Statistics show our tax to GDP at 6 per cent, while the sub-Saharan Africa average is 17 per cent; Asia’s is 26 per cent. Most of the emerging markets and advanced countries are at 30-35 per cent.
“It is interesting, if you look at the statistics, there is no poor country that has a high tax to GDP ratio and there is no rich country with a lower one. And so, if we want to move with the prosperous countries, we have to do what they do.

“We will not achieve prosperity in Nigeria if we continue on the tax to GDP ratio that is in the peer group of Afghanistan. I’m sure none of us aspires for Nigeria to become like Afghanistan.
“We are trying to benchmark ourselves against more developed countries and we must address these problems in a more fundamental sense,” she submitted.

In his remarks at the business forum, Osinbajo solicited the co-operation of the private sector in the federal government’s quest for a better country, assuring it that the government has the will to turn the country around within 18 months.
“Day after day, night after night, we are working on these things. Practically every night we work on these issues. I believe very strongly that Nigeria will turn around.

“I have no doubt in my mind that if we are focused, even in the next 12 to 18 months, if we are focused, we will certainly see a turn around. And I really would ‎want you to join us in being able to ensure that this happens to the Nigerian economy,” he said.
The acting president, who reiterated the necessity for active private sector involvement in the development of the nation, recalled that 40 per cent of Indian companies generate their own power and thus help the country to make progress in the face of its challenges.

He insisted that the government has the requisite discipline and enabling environment to build a stable and dynamic economy, pointing out that the Economic Recovery and Growth Plan (EGRP) recently launched by President Muhammadu Buhari was an attestation to government’s commitment to build a vibrant and productive economy.
“When Mr. President launched the Economic Recovery and Growth Plan (EGRP) ‎sometime in April, one of the things that he emphasised was the fact that we have made up our minds as to where we are going.

“And I think that we have the discipline to be able to do so, but this is a complex environment. It is a complex economy. And I have said this repeatedly, that in some sense, we are fortunate to have a leader like the president who at least we know is straightforward and honest, and committed to ensuring that government expenditure is spent the way it should be spent, and that people don’t do what they like.
“To that extent, I think we have the right environment, at least in terms of government discipline and all of that, to be able to deliver on the promises that we have made.
“And all I will just want to say to the private sector is be sure that we have enough willing and able partners. There is no way we can ever be perfect.

“Government is a behemoth, where there are so many problems and issues. But do not doubt for one moment our commitment to ‎ensure that we are able to deliver on the promises that we have made,” Osinbajo stressed.
The Minister of Power, Works and Housing, Mr. Babatunde Fashola, while answering questions from journalists at the end of the meeting, said the federal government’s roadmap on electricity supply was predicated on “incremental power” as well as stable and uninterrupted power supply.

“But we are focusing on incremental power. Just yesterday, as one of our incremental power initiatives, we commissioned the Kukoba power substation to increase electricity supply to Abuja by another 120 megawatts (MW) carrying capacity.
“So, it involves not only transmission but also involves generation work, distribution work, enabling the distribution companies (DISCOs) to perform better; for the generation companies (GENCOs) to perform better and carrying out our own responsibility which is transmission.

“It is an ongoing undertaking, and as I said, you must measure what we have done from where we started.
“On May 29, 2015, the power from the grid was 2,690MW and we have kept it now relatively stable at about 4,000Mw. With that, it’s going to be the minimum except for occasions when we have mechanical and electrical outages and we fix them,” he explained.

On his face-off with the National Assembly, Fashola said it was wrong to view the development as a feud, describing it as a mere disagreement between himself and the lawmakers over project priorities in the 2017 budget.
“There is no problem between me as an individual and the National Assembly. And let me make that very clear, many of the senators and honourable members are my personal friends, and so you don’t fight your friends.

“But we have a disagreement. And the context of that disagreement is as follows: You will remember when President Muhammadu Buhari launched the Economic Recovery and Growth Plan, he had enormous support from the leadership of the National Assembly.
“So it means that we all agreed that there is a problem. Then there is also a disagreement which I don’t think should make us disagreeable about the best way to implement that plan and I think that is all there is to it,” he said.

Source: This day

Economy Slowly Merging From Recession ―Presidency

THE Presidency on Tuesday said following the release by the National Bureau of Statistics (NBS) of the Quarter 1 Gross Domestic Products (GDP) 2017 figures, there were indications that the country’s economy was slowly moving out of recession.

According to a statement issued by the Senior Special Assistant to the Vice President on media and publicity, Laolu Akande, in Abuja, growth has been recorded in agricultural and manufacturing.

He said: “In an encouraging indication of a steady, even if slow progressive pace, the Nigerian economy is emerging out of recession.

“For instance, growth has continued in agriculture and a notable positive turnaround has now been recorded in manufacturing and non-oil sectors, while a slowdown in negative growth rates is noticed in several more sector.

He quoted a statement by the Special Adviser to the President on Economic Matters, Dr. Adeyemi Dipeolu, which showed that the economy shrank by 0.52% in the first quarter of 2017.

The statement added: “Although the economy remains in recession this is the strongest performance in five quarters and shows a significant turnaround from the low of -2.34% reached in the third quarter of 2016 (Q3 2016).

“This is nearly two percentage point improvement and also reflects the fact that the number of sub-sectors that experienced negative growth has almost halved falling from 29 sub-sectors for the whole of 2016 to 16 sub-sectors in Q1 2017.

“Agricultural growth remained in positive territory albeit growing at a slower rate of about 3.4%, no doubt due to seasonal factors.”

“Growth in manufacturing, on the other hand, returned to positive territory after five quarters of negative growth.  It grew by 1.36% in Q1 2017 after falling to a nadir of -7.0% in Q1 2016.”

“The solid mineral sector continued to justify the priority given to it by the Federal Government with high double-digit growth for metal ores and quarrying at 40.79% and 52.54% respectively.”

“Growth in the oil sector remained negative at -11.64% although there was an over six percentage point improvement in its fortunes from the previous quarter.”

“More significantly, the non-oil sector which accounts for about 90% of GDP returned to positive growth although at a marginal level of 0.72% in Q1 2017.  This is the first positive growth in the non-oil sector since the last quarter of 2015.”

“Headline inflation fell for the third month in a row to 17.24%, with core inflation also declining quite rapidly.”

Investors Start Taking Notice of Nigeria’s Latest Naira Plan

Foreign investors are warming to the foreign-exchange window that Nigeria opened last week to ease a severe shortage of dollars, according to the head of the trading platform overseeing it.

The naira’s depreciation in the window to almost the same level as the black-market rate means the new market is already “nearing equilibrium,” according to Bola Onadele, the chief executive officer of Lagos-based FMDQ OTC Securities Exchange. The central bank is ready to supply dollars to bond and stock investors, even for trades of as much as $100 million, he said.

“There’s already been interest from portfolio investors because they can see that the new window will have buyers and sellers determining the rate,” Onadele said in an emailed response to questions on May 1. “The banks are talking to portfolio investors. Volumes will build up.”

The so-called Investors’ and Exporters’ FX Window, which started on April 24, is the central bank’s latest attempt to lure back investors who fled in the past two years, exacerbating a crisis that caused Nigeria’s economy to shrink in 2016 for the first time in a quarter century. The idea is that by creating a market for some types of investment transactions, policy makers can satisfy calls to float the currency without risking an inflationary spiral that may come from a formal devaluation.

READ MORE: What Investors Need to Know About Nigeria’s Exchange Window

The naira opened on Monday at 380.31 per dollar in the window. That’s about 17 percent weaker than the interbank rate of 315 and close to the rate of 391 on the black-market, which many Nigerian businesses were forced to utilize as hard-currency supplies through official channels dried up. Eligible transactions in the window include those for loan repayments, interest payments, capital repatriation and remittances.

While Nigeria devalued the naira on the interbank market last June, it stopped short of allowing a free float and intervened to prop up the exchange rate. Investors, concerned that the currency was overvalued, have stayed on the sidelines: Nigerian stocks declined 33 percent in dollar terms in the past year, the worst performance globally, according to data compiled by Bloomberg.

Onadele, a former chief trader at Citigroup Inc.’s Nigerian unit who criticized the central bank last October for leaning on dealers not to let the currency fall, said this time around Governor Godwin Emefiele was relaxed about the weaker rate.

Multiple Rates

“The governor isn’t calling up, worrying about the rate,” Onadele said. “The central bank is ready to sell into this window, via the commercial banks. Any foreign portfolio investor that wants to leave Nigeria will get its money. If a foreign portfolio investor wants $100 million tomorrow, its bank should present the trade to the central bank. As long as the investor’s satisfied paying the rate, it will be done.”

Bond and stock investors should disregard the other exchange rates that now exist in Nigeria, with the central bank charging businesses different prices for foreign-exchange depending on their needs.

“Foreign portfolio investors should ignore the multiple exchange rates,” he said. “This new window is the relevant one that applies to them. The way the central has matched sources of inflows and applications appears unorthodox, but it has ensured a smooth take off.”


Host Communities Deserve 1% Royalty–Peterside

An entrepreneur, Mr Atedo Peterside, has urged the Federal Government to reserve one per cent royalty to host communities of oil and other mining and mineral activities.

Peterside made the submission at the 2017 Ist Quarterly Dinner of Kings College Old Boys’ Association Abuja Branch (KCOBA).

Delivering a paper entitled “Evolving Economy, Good Governance and Repositioning Nigeria,’’ Peterside said that relative stability had been achieved in Niger-Delta through the Vice-President, Prof. Yemi Osinbajo’s interventions.

“The Federal Government should urgently pursue high-powered negotiations which should be brokered by persons with a healthy track-record in this activity and the ancillary pipeline protection business.

“In the longer term, I favour a constitutional amendment that reserves a one per cent royalty payment to immediate host communities on all mining producing activity including limestone, oil, precious stones among others.

“The good news is that significant progress has been achieved here following the mature and level-headed diplomatic initiatives led by the vice-president in recent months.

“The Federal Government should remember that appeasing militants is necessary in the short term, but the long-term solution is to embrace the constitutional amendment I refer above,’’ he said.

He listed some other impediments to economic recovery as multiple exchange rates, ineffective deregulation of the downstream petroleum sector, bloated civil service, infrastructural deficit, disobedience to court orders and dysfunctional legal system.

The founder of Stanbic IBTC Bank said that there was an urgent need for the restructuring of Nigeria as less than 25 per cent of the 36 states were economically viable.

Peterside said that restoring the confidence of investors should be the primary concern guiding every statement by public officers.

Earlier in his speech, Mr Miebaka Adoki, Chairman KCOBA, said that primary objective of government was to better the welfare of the people.

He said that the current economic challenges in the country had re-engineered the spirit of togetherness among the old boys of Kings College.

Adoki said that the primary objective of KCOBA was to sustain the wellbeing of Kings College and promote team spirit among the old boys.


Jonathan’s Pathetic Apologetics, By The Punch

Former President Goodluck Jonathan, reflecting on his electoral defeat two years ago, shunned deep introspection and remorse for his five-year reign of impunity. What comes out from him from excerpts of a new book is a potpourri of falsehoods, hypocrisy, lame excuses and blame for everyone but himself. But before Nigerians fall once more for his favourite tactic of playing the victim, they would do well to remember the devastating impact of his bad government.

Words attributed to him in a book, Against the Run of Play, by Olusegun Adeniyi, a well-known journalist, and billed for public presentation in Lagos on Friday, were vintage Jonathan. Posing yet again as the perpetual victim, he blamed former world leaders − Barack Obama of the United States, Britain’s David Cameron, and French president, Francois Hollande − for desperately wanting a change of government in Nigeria. He blamed Attahiru Jega, the former Chairman of the Independent National Electoral Commission, for allegedly working with the Americans by insisting on the initial February 2015 date set for the presidential election; he blamed his own former party chairman, Adamu Mu’azu, whom he accused of working against him, and he carpeted the press and civil society for highlighting the pervasive corruption that flourished on his watch.

First, the context: As he left a limping economy and widescale corruption behind, Jonathan’s five years at the helm were an unmitigated disaster for Nigeria, the effects of which 170 million Nigerians are experiencing today. He ran the economy aground, failing like his predecessors to diversify effectively and entrenching what The Economist of London labelled “a rentier state.” His government despoiled all fiscal buffers − foreign reserves hardly rose despite persistently high oil prices until August 2014. In its defence, his finance minister claimed that it was $43.13 billion that was inherited, yet, despite oil prices averaging $90-$103 per barrel up till mid-2014, reserves moved barely perceptively, while the Excess Crude Account had crashed from $22 billion to only $2.2 billion when Muhammadu Buhari took over by mid-2015. Jonathan left no major new signature infrastructure project; only inflated repair projects which are mired in controversy.

Arguably his greatest disservice that ought to have been his major triumph was the badly managed privatisation of power assets that transferred most of the generation and distribution companies to untested, incompetent domestic consortia that have saddled Nigeria with a legal quagmire. But it is in the areas of corruption and security that Nigerians were mostly badly done in by that terrible government. Jonathan’s denial that he dismissed corruption allegations as “mere stealing” is false. He declared this on local and international TV. Corruption ran riot on his watch, as attested to by the latest scandals involving his wife, the suspended spy chief who stashed away $43 million in a Lagos apartment, the missing oil receipts being probed in parliament, as well as the $2.1 billion arms purchase fund that ended up in private hands.

While he is whining that Obama and other world leaders, civil society, the media and the opposition alleged corruption “without proof,” the world is still aghast at a sprawling corruption scandal centred on the abuse of N2.53 trillion petrol subsidy in 2011 when only N248 billion was approved in the budget. His government also signed away N603 billion in less than a year for dubious import duty waivers, exemptions and concessions, according to Customs. The fraud associated with oil swap agreements is still unfolding. Hypocritically, he claimed to have dropped Stella Oduah as Aviation minister when evidence emerged, but said he retained Diezani Alison-Madueke as oil minister “because there was no foolproof evidence.” This same ex-minister is alleged to have withdrawn millions of dollars to finance his re-election bid for which she and many others, including electoral officials, are being tried. He disingenuously discredited the Nuhu Ribadu panel report on the grounds of disagreement among some members, but failed to say that he had appointed Steve Oronsaye and Bernard Otti to the board of the Nigerian National Petroleum Corporation in an obvious move of brinksmanship.

It is not too late for Jonathan to grow up. He may think Nigerians have forgotten and that it is time to move on. This is fantasy. All the colossal scandals that defined his time in government will live on in the minds of the people who bear the burdens of his misrule. Former president Olusegun Obasanjo, who broke all party rules to make him deputy to the late President Umaru Yar’Adua, is quoted in the same book as admitting that from his first days in office, “…he showed that he was too small for the office.” He demonstrated this in his mishandling of the Boko Haram terrorist insurgency. Boko Haram has killed over 25,000 people, displaced over two million and once held 27 local government areas as its “caliphate.” Rather than take full charge, he allowed his generals to turn it into a gold mine for corrupt enrichment, an ATM, according to Obasanjo, for taking money from the treasury.

The influential The Economist once declared that Jonathan ran the most corrupt, most clueless government in Nigeria’s history. We can’t agree more. Indeed, we hold him and his corrupt generals responsible for the failure to rescue the 276 Chibok girls in 2014. His false narrative that he did try to rescue them contradicts reports that he failed to act when initially informed, continuing to view terrorism as a personal conspiracy against him.

Surprisingly, Jonathan has not changed, falsely asserting and boorishly claiming that Boko Haram is being defeated because Buhari is a Muslim, not viewed as an “infidel’’ like he was. But salafist militants view all existing governments as infidels to be violently overthrown. They target the Muslim leaders of Saudi Arabia, Iraq, Egypt, Tunisia, Jordan, Afghanistan, Yemen, Libya, Somalia, Chechnya, Algeria and Bahrain. Boko Haram has killed emirs and has vowed to kill Buhari, the Emir of Kano and the Sultan of Sokoto, the nominal head of Nigerian Muslims.

Jonathan incorrigibly blamed the media for his electoral defeat. We insist he lost the election because he was a total failure. He cites high figures of votes for Buhari in Kano, but was silent on equally suspicious figures for him from the South-South states, from Rivers or from Akwa Ibom and Delta states where votes recorded for him doubled the number of accredited voters.

But we hold President Muhammadu Buhari and the Nigerian people culpable for providing the leeway for Jonathan to trample on our collective memory. While the Buhari government has demonstrated lack of courage to bring Jonathan to justice, many Nigerians celebrate, instead of rising against corruption. Across the world, people of conscience are marching in their thousands to protest against corruption; in broken, dysfunctional Nigeria, hundreds are, for a few wads of naira, marching, vandalising property, and preaching hate in defence of the corrupt. The officials on trial who have claimed to have been obeying Jonathan’s orders by collecting and distributing public funds provide enough grounds to put him also on trial. The anti-corruption war cannot go far unless Jonathan is confronted in court with his misdeeds. Past rulers who break the law are put in the dock. South Korea, Guatemala, Brazil, Peru, Zambia, Italy, France are ready examples. No one should be above the law.

Buhari should save his reputation by pulling out all the stops in the war on graft. Far too many ex-Presidents have demonstrated this belief that they are above the law. Jonathan failed to bring corrupt past leaders to justice, but Buhari must bust the myth. Nigerians should realise that corruption has ruined their present and rendered the future gloomy for their children and rise up against corrupt leaders − past and present. As for Jonathan, he should be reminded that the history of his administration is already being written and it is neither flattering nor can he remodel it with falsehood and whining hypocrisy.

The Punch Editorial Board

Nigeria Will Be Among Top 3 World Economies By 2050 —Britain

Britain has predicted that Nigeria may turn out to be one of the three biggest economies of the world by 2050.

The British High Commissioner in Nigeria, Mr. Paul Arkwright, made this disclosure on Monday in Lagos as part of activities to commemorate the 40th anniversary of the Nigerian British Chamber of Commerce, NBCC.

Speaking on the topic, “Nigeria-British Relations: The Next 100 Years”, Arkwright said the UK government was happy with the economic outlook of Nigeria.

He added that by virtue of the policies and investment habits of the current government of Nigeria, it was glaring that the country would no longer be dependent on aid to develop.

Arkwright said, “By 2050, Nigeria will be the third biggest country in the world as it will overtake the USA to join China and India as the three biggest countries.

“Second, Lagos, Africa’s fifth largest economy in 2016, will become more important in the coming years as African example of how to break down barriers to doing business and bring in foreign investment.”

Speaking further, Arkwright also predicted that in a few years, Lagos would become a major global economic centre, while Nigeria would emerge one of the three biggest countries in the world.

He also disclosed that the British Embassy had started special services.

According to him, visa applicants could get their visa on the same day or within five days of application.

The embassy also reduced the maximum turnaround time for all classes of visa application to 15 days.

“We have introduced a same day visa service – at a cost – for visas in Nigeria. We have also introduced a service that means you get a visa within five days, at a lower cost than the same day process.

‘’Our turnaround time for all other visas is 15 days. The key thing, however, is that all visitors to the UK, whether they are from Nigeria or anywhere else, must respect the law and the length of time their visa says they can stay in the UK,” the High Commissioner said.

“In 2016, around 140,000 Nigerians applied for visas to the UK. Of those that applied for student visas, 90 percent were successful.

‘’For those that applied for other visas, around 70 percent were successful. There are as many as 250,000 Nigerian nationals or dual Nigerian-British nationals living in the UK at the moment.

‘’Some claim the total Nigerian diaspora in the UK is well over a million. We want Nigerians to come to the UK. They come to do business, to study, to see family and to invest in our economy,’’ he added.

‘Nigeria, 14 Others Generate 80% of Africa’s GDP’- Jumia CEO

Nigeria and 14 other countries are currently generating over 80 per cent of Africa’s Gross Domestic Product (GDP). This is according to Jumia Nigeria in its 2017 African Mobile Trends study, presented on Tuesday, to herald the commencement of the Jumia Mobile Week, which starts from April 24 to 30.

Also affirming Nigeria’s significance in the continent, the Chief Executive Officer of Jumia Nigeria, Juliet Anammah said with the current Internet penetration rate of 53 per cent (97.2 million users) Nigeria has a much higher penetration rate than across Africa. Specifically, Nigeria, has 18 per cent higher Internet penetration than the whole of Africa.

According to her: “About 71 per cent of website visitors on Jumia use their mobile phones. This is in comparison to 53 per cent of Jumia African customers. One of the main vehicles of this mobile trajectory is the increasing adoption of the smartphone device by consumers. As predicted in our 2016 report, smartphone adoption continues to rise in Nigeria.”

Anammah said, “The study takes a look at how the market has democratized mobile Internet use, the consumer behaviours driving increased smartphone adoption and the role of mobile brands, mobile operators and m-commerce in creating a synergy of an enhanced customer experience.”

“One reason for this could be that countries with higher levels of income have been found to have more users accessing the internet with heavier browsers like chrome – which typically have higher system requirements. Opera mini is a lighter browser in terms of data usage and is popular among new mobile internet users who have lower incomes and can’t afford costly internet data packs.

“A recent report from Opera determined the savings on mobile data costs for Opera mini users in Nigeria has amounted to about $198 million (N39.5 billion) over a 10-month period, due to its data compression technology. This is a clear example of the ripple effect that customer enjoy when a slight change is introduced by one of the digital ecosystem players,” she stated.