Witney W. Schneidman, an adviser on African affairs to President Barack Obama during the Presidential campaign spelled out Obama's cardinal policy objectives for Africa:
"Barack Obama will pursue three fundamental objectives on the continent. One is to accelerate Africa's integration into the global economy. A second is to enhance the peace and security of African states.
And a third is to strengthen relationships with those governments, institutions and civil society organizations committed to deepening democracy, accountability and reducing poverty in Africa."
Nigeria is the epicenter of African geo-politics, therefore a stable, healthy and prosperous Nigeria is good for Africa and the world. Nigeria is the most populous nation in Africa: Politically, culturally, economically and otherwise, resourceful South Africa notwithstanding, Nigeria overwhelms the continent. Nigeria is unique in Africa in the sense, that it has the requisite human and natural capitals to be making waves in economic development and scientific advancement in Africa. But intellectual lethargy especially the paucity of confidence embedded with self-doubt have dimmed its emerging light.
Nigeria’s nascent democracy is gradually losing its luster and vibrancy due to the tilting to plutocracy and institutional disfiguration, impelled by uncompromising politicians. For Nigeria to continue to be a front line nation in Africa, it must put her house in order. A strength tempered with humility with a responsibility to her continent must be Nigeria’s targeted self actualization. President Obama must shun all the diplomatic shenanigans and niceties and be forthright with Africa’s leadership and compel them to amend their ways and maximize their continent’s God giving potentials.
Peace and conflict resolutions
Nigeria must have quantifiable peace to enjoy steady economic progress. The most pressing is the issue of Niger Delta. Although Nigeria territorial integrity must be respected, Obama administration can work with Nigerian government providing logistic and confident building measures in negotiations with neglected communities in Niger delta. Also, The Obama administration must work with African Union in finding solutions to the cessation of conflicts and wars in the continent. Wars (especially internal strife) are ubiquitous in the continent. Some African governments and warmongers commit their resources to executing endless wars. The West must frown upon the sell of arms to these parties by checkmating their natives arms industries.
Africom as a security tool Africa is confronted with lack of internal security which becomes a deterrent force in economic advancement. Capital flight and low foreign investment are precipitate and ramification of insecurity.
With President Obama enormous social and political capital, he can do a better public relationship job of explaining and restreaming Africom.: Justify, Redirect or End it.
American government have set-up Africom - a military command for Africa, which is to secure peace and goodwill in Africa. Many African countries are skeptical of America’s real intention, fearing that Africom can become a tool to punish America’s foes in the region in the name of fighting terrorism. The unexpressed fear is that it could be used to control and manipulate internal policies and status quo of African nations.
America have to work succinctly to assiduously allay their fears and show to them the benefits of Africom. This must be done with goodwill and civility while respecting African territorial integrity . Peace and tranquility are good for business for all the parties concerned which can be achieved through dialogue and understanding. To this end, American diplomats in Africa have to embark on thorough enlightenment campaign.
Respect for Human Rights
The building blocks of democracy are liberty, freedom and justice. Nigeria cannot be democratic nation without liberty. Nigerians must live in the system of government that encourages freedom and justice. The respect for fundamental human rights must be instituted and adhered to; an environment that provides self-help, self-improvement and self-innovation must be encouraged. Only freedom can make these things possible and make free enterprise a reality, so that free people can create wealth and advance human dignity.
The Obama administration must encourage and support governance that accommodates checks and balances in Nigeria and indeed Africa. This will in turn provide accountability and respect for the populace. What Africa needs mostly include, elimination of dictators and socialist regimes, establishment of virile/free political platform and economy, rule of law and respect for individual rights. All these things do border on fundamental issues which foreign aid alone cannot redress. Until these issues are properly put right, the story of the optimum utilization of these billions of dollars from foreign aid will always remain a mirage.
Anti-corruption campaign and legislation Mr.Emeka Chiakwelu is the Founding director/Principal policy strategist of Afripol Organization.Africa Political and Economic Strategic Center (Afripol) is foremost a public policy center whose fundamental objective is to broaden the parameters of public policy debates in Africa. To advocate, promote and encourage free enterprise, democracy, human rights, conflict resolutions, transparency and probity in Africa.
President Obama as the leader of the free world must support corruption elimination in Nigeria and Africa by helping local and international entities serious on the war against CORRUPTION in Africa. The responsibility of fighting corruption is too complex and gigantic to be left for one party. Both Africa and West must partake in the fight against corruption. The West must enact banking laws that will fish out bankers that accept laundered money and tainted wealth from corrupt African leaders and bureaucrats. Ill-gotten wealth must be returned to Africa without much ado, while the culprits must be exposed and prosecuted.
The West must work together with African governments on the war against corruption and bribery. Corporations and Transnational companies operating in Africa must not induce politicians and bureaucrats by bribes in their quest for contracts.
" African Union estimates that the continent loses as much as $148 billion a year to corruption. This money is rarely invested in Africa but finds its way into the international banking system and often into western banks. The proceeds of corrupt practices in Africa, (which the African experts group recommended in 2002 should be classified as a ‘crime against humanity’ because of its impact on ordinary people), are often laundered and made respectable by some of the most well known banks in the City of London or the discreet personal bankers of Geneva and Zurich."
Fair Trade for all Parties
The Obama administration must encourage fair and equitable trade with Nigeria and Africa. The giving of aid must not be the only means to defeat poverty and alleviate quality of life in Africa. Nigeria must be encouraged to rely less on oil but to diversify her economy.
The promotion of trade can be possible when concessions are made to emerging industries in Nigeria and Africa. The West can improve technological developments by investing in areas of science and technology that can sharpen the technical-know-how in the continent.
Obama’s America and the West must stand for fair trade at the World trade organization by conscientiously removing agricultural subsidies given to their own agricultural sectors that adversely affect the traffic of commodities from Africa.
Obama administration must not spoon feed Africans with depreciating aid and charitable donations but also compel them to comprehend that only trade and comprehensive reforms can be the panacea to poverty in Africa. Strategically, a wealthy and stable Nigeria can be a stabilizing force in Africa, and a wealthy Africa will apply her resources in resolving conflicts throughout the continent.
Mr.Emeka Chiakwelu is the Founding director/Principal policy strategist of Afripol Organization.Africa Political and Economic Strategic Center (Afripol) is foremost a public policy center whose fundamental objective is to broaden the parameters of public policy debates in Africa. To advocate, promote and encourage free enterprise, democracy, human rights, conflict resolutions, transparency and probity in Africa.
Nigeria has a new Minister of Finance, Olusegun Aganga a managing director at Goldman Sachs branch in Britain. Aganga, a free marketer has a substantial experience in private industry together with his academic brilliance, he can efficiently manage and oversee Nigeria’s financial house. The minister of finance must be ready and keen to make sure that Nigeria will not fall into the trap of large external debt and higher inflation. This is important because Nigeria should not be throw back to the gloomy days of large foreign debt. Nigeria was overwhelm with the incireasing interest rates and arrears accumulated by the servicing of the foreign debt.
Nigeria external debt is currently over $5 billion dollars. Many Nigerians will be surprise to hear that Nigeria is still an indebted nation after she exited from the debt of Paris Club and London Club in 2006. Nigeria finally settled her debt of $36 billion but most Nigerians might think that Nigeria is forever free of external debt. But a thriving nation is likely to be in debt provided that the available credits are invested appropriately for creation of further wealth and improving the well being of the nation. Nigeria should try to establish criteria and benchmark for borrowing, at least to make sure that her debt does not exceed 2-3% of her GDP.
Nigerian Minister of Finance, Olusegun Aganga
In December of 2009, the former minister of finance, Mansur Muktar highlighted the state of Nigeria’s debt: "Nigeria’s exit from the Paris Club debt in 2005/2006, the external debt stock dropped dramatically and substantially from $35.94 billion to $3.54 as at the end of year 2006 but rose to $3.947 billion at the end of December 2009, including the $3.686 billion obtained from multilateral organizations namely World Bank, African Development Fund (ADF), International Development Association (IDA) and African Development Bank (AfDB) which has 40 year repayment period and 10 year moratorium period." It is essential that this is conveyed to average Nigerian taxpayers so that they become watchdogs to the finance of their country.
Also making the clarion call of country’s debt is Dr. Ngozi Okonjo-Iweala, the managing director of World Bank and the former finance minister of Nigeria. Okonjo-Iweala was among the principal leaders that facilitated and guided the country’s successful exit from both Paris and Club of Creditors in 2006. Recently in a lecture at University of Calabar she said, "In April 2006, Nigeria paid off the last installment due on its debt settlement agreement with the Paris Club, thereby erasing 30 billion dollars in external debt and reducing government external debt to 3.5 billion dollars."
Therefore the new minister of finance, Olusegun Aganga should deliberately and carefully monitor the country’s debt. The minister must closely work with Sanusi‘s Central Bank of Nigeria to tame inflation which can easily frustrate economic growth and further weaken the depreciating naira. Nigeria is issuing bonds to raise money for infrastructures development. Aganga must get involve and make sure that money raised will not be wasted and the burden of the debt passed down to powerless Nigerians.
Economic perspective and analysis by Afripol Organization www.afripol.org
The West African energy giant, Oando Plc of Nigeria is set to raise the sum of 21 billion naira ($140 million) by selling shares in the capital market. The capital raised will be used to finance ventures in energy sector and
The West African energy giant, Oando Plc of Nigeria is set to raise the sum of 21 billion naira ($140 million) by selling shares in the capital market. The capital raised will be used to finance ventures in energy sector and"refinancing the acquisition of upstream assets, providing operational capital to fund the operation of the upstream business, and short and medium term investment in its gas and power business segment."
Oando Plc headquartered in Lagos, Nigeria is the biggest indigenous energy firm in Nigeria that market oil products and involve in oil exploration at its acquired upstream assets, the segment that will receive the largest chunk of the proposed capital infusion.
Oando Plc will raise the capital "through a Right Issue of 301,694,878 ordinary shares of 50 kobo each at N70.00 per share on the basis of one 1 new ordinary share for every 3 ordinary shares of 50 kobo each held as at the close of business on Friday, 18 December 2009." Two powerful and resourceful companies in the capital market: Vetiva Capital Management Ltd. and Stanbic IBTC Bank Plc will participate in the selling of the shares to raise the proposed capital.
The capital market venture was announced by the CEO and Group Managing Director, Mr. Wale Tinubu at the end of the meeting of the executive board of directors. According to Mr. Wale the company planned to raise the capital for the refinance its acquisition of upstream assets.
The achievements of Wale Tinubu, the erudite and efficient chief executive officer must be acknowledged as a driving force at Oando Plc for his vision and leadership. Under his strategic leadership Oando‘s growth has been tremendous thus appreciating the shareholders’ dividends.
During the press conference Wale reaffirmed, "the size of the business we run at Oando Plc would require a substantial amount of capital. We are doing things in several stages. The one we are doing now is Right Issue which is a small amount of N20 billion for the recapitalisation process. Then we will be proceeding to do a much larger international equity Issue which would occur at the beginning of the second quarter. Then there is going to be two debt issues. One is a local five year debt issue which we are working on right now and the mandate has been signed, it’s in the final stages."
Wale further emphasized: "the final thing would be the bond issue. We are in the process of fund raising the debt restructuring 5 year term for N60 billion. Then we would do an international equity and debt raising of N75 billion which would come in the 1st week of April (second quarter). The bulk of the money is going into our gas and upstream division for the upstream, we have our crude oil. You are aware; we have diversified heavily towards increasing our production in the crude oil sector."
The bold move made by Oando Plc buttressed the company’s growth and strong confidence even in the turbulent oil industry especially in Nigeria with her unending problems in Niger Delta. The issue of Niger Delta has a global effect on the oil price and energy sector but with relatively less impact on the oil-marketer Oanda.Oando Plc is listed on both Nigerian and Johannesburg Stock Exchanges, and has been concluding the arrangement to be listed in London Stock Exchange.
Recently it was reported by Reuters that "Dow Jones Capital Markets Report reported that Oando Plc had signed Memorandum of Understanding with Gazprom OAO. The two companies have agreed to collaborate on the development of oil and gas assets and infrastructure in the West African sub-region and the Gulf of Guinea."
Oando Plc is growing rapidly by increasing the number of oil rigs and "All Africa reported that Oando Plc has increased its fleet of oil drilling rigs to three with the acquisition of a USD 53.5 million rig, named the Constitution. Constitution, a swamp barge rig, has capacity for approximately 15,000 psi pressure output, about 3,000 horse power as well as the ability to undertake drilling operations, work over and high pressure/high temperature (HPHT) wells of over 30,000 ft drilling depths. The facility was purchased in July 2008, and was recently delivered to the Company. "
Emeka Chiakwelu, Principal Policy Strategist at Afripol, recently speaking at Energy Workshop noted that "Energy industry is capital intensive and continuously needs injection of large resources. The growing energy companies in Nigeria and Africa must be willing to look beyond the continent to raise capital that Africa cannot provide." Therefore Oando Plc is moving in the right direction.
Oando Plc is gradually but steadily making impact in the energy industry, therefore the infusion of the 21 billion naira will strengthen and energized its business prospect.
Oando’s stocks are doing well in the stock market in spite of the global economic downturn. Oando Plc must widen its scope beyond Africa and venture into new territory particularly in East Asia and Latin America. And the company must spend more resources in public relation to become an international household name, thus deemphasizing its Nigerian localized image.
Oando Plc has the potential and the credibility to become a major player in the global energy industry in 21 century. With this enormous injection of proposed capital Oando Plc is geared up for growth and expansion.
CAMAC Energy Inc. (NYSE Amex CAK 3.97, -0.18, -4.31%) US publicly traded Energy Company that primarily engaged and focused on strategic development of oil projects by singular and multilateral operations. The market capitalization of the formerly Pacific Asia Petroleum Inc is about 632.1 M and the stocks have been hovering slightly below or above $ 4.00 momentarily.
With the market prospect of Camac Energy Inc, the stocks are highly recommendable for a diversified portfolio especially at this time in the global economy and the stocks are likely to appreciate in near future. The stocks which traded without much exposure at OTC bulletin board as Pacific Asia Petroleum is now a listed company at AMEX and NYSE as Camac Energy Inc after acquiring principal assets in the Oyo Oilfield. With its superior management team and implementable strategies it can grow to become a mid cap or even a large cap energy company at a faster pace. Superior management as an invaluable human capital can be an antidote to mistakes and bulwark to unforeseen circumstances and risk management.
Camac Energy Inc has opportunities for advancement and growth because of its holdings particularly in West Africa and China oil fields. Moreover the management has high quality individuals who have been in oil business for long time with enviable experience. The human capital can be leverage for advancing the energy company. The beginning of standard & Poor’s Factual Stock Report coverage comes with a credit rating that will enhance accountability and transparency, thus affirming optimum confidence in the company.
In Nigeria, Camac energy’s " principal assets include the Oyo Oilfield, an offshore oil asset in deepwater Nigeria that started production in December 2009; the Zijinshan Gas Asset, a 100%-owned gas asset in the Shanxi Province, China; and the Enhanced Oil Recovery and Production business in Northern China."
With its footing in west Africa, Camac Energy Inc may not only have to rely only its operation in Oyo Oilfield but it can also bid for oil exploration licenses in Nigerian deep waters and off shore. In Nigeria the risk of political tension and disturbances in Niger Delta is slowing down and it can minimize the political risk by bidding for off shore drilling. In China, Camac Energy with its subsidiaries can explore more oil fields in negotiated partnership with the authorities of provinces in the country.
The quantum development of Energy Company entails high intensive capital and lot of patience and prudence. This is where the experience and management acumen of quality individuals including the company’s President and CEO, Frank C. Ingriselli and Dr. kase lawal, a board member of the company, The chairman and Founder of Camac International Corporation comes handy.
Dr. Kase Lawal as a strategic asset
kase Lawal, Chairman of Camac Energy Inc has a strategic experience in global oil business, his dealings and undertakings in the world of oil deals can help propel Camac Energy Inc to greater heights. The management skill of the CEO Frank C. Ingriselli has been noted and enhanced since his touch of guidance he gave to the formerly Pacific Asia Inc until it became Camac Energy Inc and his invaluable experience as the former president of Texaco international. Lawal and Ingriselli intellectual synergy is a solid foundation.
Dr. Kase Lawal has a good and solid track record in company development and management. He has not been exempted from risks and mistakes associated in the business world but he has a sustainable quality that aided him to triumph over hiccups. He is the Founder/chairman and chief executive officer of CAMAC International Corporation and chairman of Allied Energy Corporation. The managerial prudence, business touch and guidance he utilized as he continued to develop his CAMAC Holdings can become a great asset to Camac Energy Inc. Kase Lawal as board member of Camac Energy Inc may not manage the daily business activities of Camac Energy Inc but his strategic input from his long accumulated experience can become an essential building block to the company.
Reorganization as inevitable tool for growth
Camac Energy Inc needs middle managers who are willing to work hard and provides the strategic compass for the company’s growth. These managers must be willing to take calculative risks and willing to feel the pulse of the shareholders. Reorganization enable a company to adapt to dynamics of the market place and able to compete effectively in the high energy of oil exploration and development.
Camac Energy Inc has good people in management including the recently new CFO Abiola Lawal, an erudite and intelligent manager. Mr. Abiola Lawal has been among the pillars of Oando Plc from where he came to joined Camac Energy, his strategic endeavors at Oando Plc speaks volume of his vision and skill. He brings the strategic depth to bear to the new position.
Camac Energy Inc is poise for growth and advancement but it must be prepare and ready for the challenges and opportunities in this competitive arena of oil’s exploration and production.
Afripol Organization. Africa Political and Economic Strategic Center (Afripol) is foremost a public policy center whose fundamental objective is to broaden the parameters of public policy debates in Africa. To advocate, promote and encourage free enterprise, democracy, sustainable green environment, human rights, conflict resolutions, transparency and probity in Africa.
This is a 3 part series that I think deserves a review. Africa fails on issues of democratic governance.
The Governor of Central bank of South Africa, Gill Marcus has proven herself a pragmatic free market banker rather than ideological by the way she goes about with her responsibilities as the apex banker of the land. She has wisely asserted her independence by refusing to yield to pressure from politicians and labor union to further cut down the benchmark interest rate.
"On March 25, the central bank cut its benchmark interest rate to the lowest in at least 12 years, reducing it by half a percentage point to 6.5 percent, to shore up a recovery from the first recession in 17 years. Labor unions have been pushing for further rate cuts to create jobs." Governor Gill Marcus understood quite well that credit crunch must be ameliorated in order to stimulate the economy for wealth and job creations. For her gallant action she deserves every kudos.
Gill Marcus, Governor of South African Reserve Bank
Gill Marcus was the deputy governor of South African Reserve Bank before she was appointed the new governor of South African apex bank to replace the retired Tito Mboweni. Marcus appointment assured the global financial market that President Jacob Zuma who made the appointment was still committed to free market and financial discipline of his predecessor Thabo Mbeki.
The retired former governor of South African Reserve Bank, Tito Mboweni have the reputation of being fiscal conservative with a prudence in the application of well thought monetary policy to control inflation and maintaining the value of rand. Under the watchful eye of Mboweni the South African currency rand have continue to maintain its strong value but not too strong to dwindle export of home made goods.
South African economy is quite ebullient with its relentless dominance of the entire African economic and financial landscape - the largest economy in Africa and the only African country that made it to G20. A good thing coming from South Africa is the continued investments in the continent. South African investors are investing heavily in West Africa particularly in Nigeria and neighboring countries where they are dominating telecommunication industry. Many of construction contracts in buildings and road constructions in many African countries are dominated by South African firms.
Afripol praised the appointment of Gill Marcus by President Jacob Zuma and maintained that "the keeping of high interest rates do not augur well for growth of small and viable businesses in South Africa. High interests make it difficult for a flourishing economic growth in the country and for upcoming new capitalist it can be detrimental in obtaining and paying back loans from financial institutions." Therefore lower interest rate can be necessary for economic growth and job creation.
The further cutting of interest rate can stimulate economic activities and can help to regenerate economic growth in South Africa in era of global recession, ultimately setting the climate for job creation that is badly needed in the country. When business community and marketers have access to credit, it will surely bring about the needed liquidity that the market is craving for. But cutting the interest rate to appease political constituents will not be good for a coordinated and well thought monetary policy.
A way lower interest rate may certainly encourage more borrowing but more spending and easy money have its downside too. Excessive liquidity may trigger inflationary trends and higher inflation that may retard economic growth that comes with higher unemployment and even weaker rand. The rand is not doing badly even with local demand of dollar; it stood its ground and always rebounded. It was reported that "the rand has surged almost 27 percent since the start of last year, helping to ease price growth by reducing the cost of imports such as oil." An appreciating and strong rand is an indicator of prosperous economy but overtly stronger rand may discourage and dampen export.
The inflation rate since February in South Africa has been 5.7% and that is three-year low. And Reserve Bank Governor Gill Marcus deserves the credit on the handling of the apex bank and its monetary policy. Keeping the inflation lower may be the most important job she has been doing. Higher inflation will complicate her duties by slowing growth and that will not help to alleviate poverty among the youths and unemployed of South Africa. And the increasing stronger and appreciating rand will lose its luster and potency with rising inflation.
Governor Gill Marcus has done well by resisting the mounting pressure to further lower the benchmark interest rate. Yielding to such pressure without the consideration of the market forces will not be prudent. And with that comes the losing of independence and a weaken reserve bank.
Africa Political and Economic Strategic Center (Afripol) is foremost a public policy center whose fundamental objective is to broaden the parameters of public policy debates in Africa. To advocate, promote and encourage free enterprise, democracy, sustainable green environment, human rights, conflict resolutions, transparency and probity in Africa.
Africa Political and Economic Strategic Center (Afripol) is foremost a public policy center whose fundamental objective is to broaden the parameters of public policy debates in Africa. To advocate, promote and encourage free enterprise, democracy, sustainable green environment, human rights, conflict resolutions, transparency and probity in Africa.
The Board of Directors and Staff of Afripol Organization (Africa Political and Economic Strategic Center) congratulate the Honorable Minister of Finance, Olusegun Aganga on his election as the new chairman of the Board of the Bretton-Woods Institutes, the World Bank and the International Monetary Fund (IMF). This is a testament of the emerging importance of Nigeria in the global financial market.
Olusegun Aganga was recently appointed by Nigeria’s Acting President Goodluck Jonathan as the minister of finance. And now with the subsequent election of Aganga as the chairman of Board of World Bank and IMF in his first outing after vigorous politicking for the position is something worth celebrating. A great credit must be given to our leader His Excellency Goodluck Jonathan on his rebranding of his country especially during his visit to Washington DC. During his interaction with leaders of businesses and global financial institutions he restored their confidence and trust on Africa‘s giant Nigeria. His Excellency Goodluck Jonathan made a powerful and enduring impression to the world and reassured the world community during his interview on CNN that Nigeria is strong and Nigeria is in good hands. For this we are grateful to our leader.
Emeka Chiakwelu, Principal Policy Strategist at Afripol recently wrote: “The minister of finance must be ready and keen to make sure that Nigeria will not fall into the trap of large external debt and higher inflation. This is important because Nigeria should not be throw back to the gloomy days of large foreign debt. Nigeria was overwhelm with the increasing interest rates and arrears accumulated by the servicing of the foreign debt.” Now with the new position as the chairman at the both international institutions Olusegun Aganaga can clearly and forcefully monitor the financial wellbeing of our great country Nigeria. Aganga must try his possible best to minimise Nigeria’s foreign borrowing and to elevate prudent investment with the resources leverage from bonds transactions.
The growing Nigeria’s financial prowess has been buttressed with the presence of powerful positions already occupied by two distinguished Nigerians: Dr. Ngozi Okonjo-Iweala the current Managing Director of World Bank and Dr. Oby Ezekwesili, Vice-President of World Bank. The coming together of these respectful Nigerians can become a synergy of competence, commitment and vision to further the wellbeing of our country Nigeria. Together with the diligence and dedication of the Acting President Goodluck Jonathan, the new development can aid to realize his aspiration and vision for our great country Nigeria.
Adam Smith's Wealth of Nations, the classic and the enduring book in which the characterization consolidated the fundamental mechanisms of capitalism, cautioned marketers and capitalists to invest where they have comparative advantages. The risk will be minimal and potential for success more viable. But capitalist and capitalism in the Western world is charting a new course; they invest in just anything without in depth feasibility studies and when they burst, they turn to the government to bail them out with a hand-out. This bastardized paradigm of capitalism, where irresponsibility and mismanagement are rewarded with taxpayers' money is not the basis for capitalism. In the free enterprise, free people invest in businesses and take reasonable risk with a well- grounded preparation. When they succeed they reap the dividend and at failure, pay the price.
The utmost danger is the encroachment of government into the economic landscape via bailouts and handouts. Subsequently government might proceed to have control over the means of production and central planning becomes imminent. A state with an economic model rooted in central planning is doomed to become a totalitarian state. Where tyranny of the people becomes the order of the day, human decency is destroyed and human creativity is supplanted and stifled.
Transnational and big corporations that are going bankrupt are being spoon fed by the western government: AIG, Fannie Mae and Freddie Mac and others are being bail out to stem their financial crisis. Even the farmers of the West are furnished with subsidies for their agricultural products with taxpayers' money. This is a big blow on accountability, transparency and probity. Apart from the fact that such an act is not fair to competitors in the emerging and third world countries, it does discourage creativity, hard work and ingenuity which are the qualities that are inherent in capitalism and free market. The continuation of this practice poses a great danger for it will encourage and promote cronyism, economic nationalism and corruption. In the long run everybody will lose because there is no basis for industry, wealth creation and risk-taking which are needed to make a free enterprise thrive.
The juxtaposition of business and government in this ill act is negating free enterprise and risk-taking which are the bloodline of capitalism. The liberty and the courage to venture in creating wealth through formation of business is what make capitalism very attractive. As the rest of world have come to embrace the truest form of capitalism which is about competition, taking risk and being responsible for actions taken to grow businesses, the West is gradually recoiling from this responsibility embedded in free enterprise. They are turning to government for bail out.
The laissez faire of the economy is being violated by the tinkering of the visible hands of the government. The classical economist Von Hayek, who authoredOn the road to serfdom, warned about such interference by government in the economic order which can culminate the unbridle manipulation and pollution of the economic system. When government is given the green light by the business community to bail them out and give them subsidies during cyclical economic depression they are opening themselves for greater control by the government and bureaucrats.
The emerging and third world economies must not emulate this act of cronyism and must absolutely shun this because it will stifle their freedom, creativity and industry. The key function of government in capitalistic economy is providing a reasonable regulation to the market and at the same time protecting lives and property. Beyond this function, the future of capitalism is threaten by bourgeon power of an assertive and interventionist government.
A large oil reserve estimated 2 billion barrels has been found in the Albert region of Uganda by oil firms Tullow Plc and Heritage Oil & Gas Company. The people of Uganda including President Yoweri kaguta Museveni are elated about the discovery. This is good news and with efficient management Uganda can say good-bye to poverty. Uganda can now increase her GDP and foreign reserve.
The oil discovered in Uganda contains less sulfur which is good but it is waxy with high viscosity. It does easily coagulate at room temperature making it difficult to extract and transport. Therefore it might be expensive to extract and refine. It is estimated that Uganda needs $8 billion to develop its oil infrastructure. Uganda does not have such enormous capital instead she will turn to foreign financiers and international financial institutions. Uganda must be deliberate, careful and calculative in order not give up her new found wealth by payment of high interest rate and arrears on loans for financing the oil development.
The East African country - Uganda is a poor country with majority of the population surviving with less than one dollar a day. In next two years the production, exploration and extraction of the oil will be in full force. Most of the oil produced will be geared towards internal consumption and the remaining will be for export.
Uganda is making arrangement with Norway to build a functional oil refinery in the country so she can process crude oil in her country and provide jobs to the citizens. Unlike Nigeria that refine her crude oil outside the country due the breakdown of her ill-equipped refineries, Uganda is making the right decision to use her oil to lunch industrialization in her country.
This is a big breakthrough for Uganda and 30% of the revenue to finance her budget comes from foreign donors. Therefore with this development Uganda will free herself from foreign donation and its attached strings. Uganda must live up to her international obligations with unwavering commitments to democracy, free enterprise and respect for human rights.
Uganda government and managers can now formulate economic policy to transform their country. President Yoweri kaguta Museveni has been talking about industrializing his country; with the new found resources he can lay down the industrial rudimentary that will prepare her country to take off industrially. The most important thing the government and policy makers can do is to train their work force with superior education that is needed to compete and perform efficiently in 21st century globalized economy.
With this new found wealth from oil, the country might be tempted to neglect the agricultural industry of the nation and relied on food importation to feed her people. It will be a big mistake with deplorable ramifications. The country must be vigilant and utilized the oil generated resource to booster agriculture in the country.
On agriculture, Emeka Chiakwelu, Principal Policy Strategist at Afripol said, "Agriculture is the future of Uganda and Africa for arable land must be cultivated. Oil can generated the capital to finance modern farming in Uganda. Africa must feed herself and Uganda can become food exporter. Oil is a limited and diminishing energy based commodity and its future is unstable with the emergence of renewable energy for 21st century. Uganda must diversify her economy, so she will not depend wholly on oil."
Uganda just like the rest of African countries is beset with poverty and corruption. If the government of Uganda is serious about improving the lot of their people, they must be aggressive in arresting the two mentioned problems. The government must explore the ways to improve the standard of the living especially in the rural areas. The basic needs of housing, light, clean drinking water and roads must be provided to ameliorate wellbeing in the urban and rural areas.
The environmental integrity of the nation must be upheld in spite of the temptation to relegate the issue of environment to the back burner. Oil exploration is associated with oil spill and air pollution that can pose a threat to the environment, which can devastate the ecosystem. Therefore this calls for standard of operation backed with best management practices to be formulated and implemented.
The issue of corruption associated with petrodollar is a reality in that part of the world. The poor people of African oil producing countries including Nigeria, Angola and Gabon are testaments and have not benefited from their country’s oil wealth.
The only panacea to corruption is transparency and open book. The news coming from Uganda that the government is not disclosing the contracts they signed with the oil companies is not encouraging.. Uganda claims to be a democratic nation and in democracy the power belongs to the people. There must be an open book, transparency and probity in order to avoid the curse of oil wealth in the east African country.