At Nigeria's 51st anniversary, UDUMA KALU lists global reports on the country. Excerpts:
Nigeria 3rd fastest growing economy-IMF
Nigeria was ranked "the third fastest growing economy in the world after China and India by the (IMF) in 2009." It further projects a growth of 9% in 2008 and 8.3% in 2009. The IMF further projects a 8% growth in the Nigerian economy in 2011.
The Nigerian National Petroleum Corporation (NNPC) is one of the eight most corrupt national oil and gas companies in the world, Transparency International (TI), said. The TI in its 2011 report on global oil and gas companies was based on research conducted in 2010 in global oil companies.
Human Rights Watch on EFCC
Human Rights Watch (HRW) said in a recent report that allegations of internal graft, incompetence and political interference have undermined the work of the EFCC. In the 164-page, the US-based group noted that the EFCC has secured only four convictions of high profile individuals since it was set up in December 2002, and that even those convicted were given what amounted to a slap on the wrist. It rehashed statistics that suggest Nigeria lost more than $380 billion to graft and mismanagement from independence in 1960 to the end of military rule in 1999.
Nigeria Ranks 158th In UNDP's 2009 Human Development Report
The United Nations Development Programme recently released its 2009 Human Development Report. Nigeria was ranked 158th out of 182 countries. Here are some stats:- Human Development Index 0.511 (158th). Below Uganda (157th) and Lesotho (156th) and just ahead of Togo, Malawi and Niger who are ranked 159th, 160th and 161st respectively.
- Life Expectancy of 47.7 years (ranking 167th). Below Mali and Mozambique and just ahead of Congo DR, Guines Bissau and Afghanistan- Adult Literacy Rate of 70% (ranking 112th). Below Lao and Tanzania and just ahead of Mali and Madagascar.- GDP Per Capita of $1969 (ranking 141st)- Human Poverty Index of 36.2 ranking 114th just ahead of Mauritania and Burundi. - 8th in remittances with average of $9,221
World Report on Nigerian Corruption
The World Bank has estimated that as a result of corruption, 80 percent of energy revenues benefit only 1 percent of the population.
US Council on Foreign Relations: To battle Boko Haram, drop your guns
Despite claims to the contrary, Boko Haram has not yet coalesced into a formalized terrorist organization. Accordingly, fighting them with firepower will not work. Diplomacy and democracy will, the US Council on Foreign Relations has said of Nigeria.
Nigeria - Amnesty International Report 2010
The police continued to commit with impunity a wide range of human rights violations, including unlawful killings, torture and other ill-treatment, and enforced disappearances. Some people were targeted for failing to pay bribes. Several people were tortured to death in police detention. Prisoners were held in appalling conditions, many of whom had been awaiting trial for years.
The government intimidated and harassed human rights defenders and journalists. Violence against women remained endemic, and abuses against people suspected of same-sex relationships continued. Forced evictions affected thousands of people across the country. At least 58 people were sentenced to death, bringing to more than 870 the number of prisoners on death row. Many were sentenced after unfair trials. However, the government announced a "self-imposed moratorium" on executions.
Business district lagos
NIgeria is bogus democracy-HRW
The United States and European Union are undermining human rights worldwide by letting states with dubious elections like Pakistan and Kenya pose as real democracies, Human Rights Watch said in its annual report. The group said Russia, Nigeria, Bahrain, Jordan and Thailand also had acted as if merely holding an election was enough to make them worthy of being called democratic.
North is poorest
A report revealed that, in absolute poverty, the North East, North West and North Central has retained the poorest geo-political zones in Nigeria since 1985. The index highlight states like the North East with the highest incidence of poverty ranging between 54.9% to 72.2% followed by North West and the North Central.Prof Mohammed Ladan, expert in security matters said this in his paper at a public lecture . on criminal justice system and the new security challenges in Nigeria in Abuja.
Nigeria's 2007 election condemned as a farce
"You cannot use the result from half of the country to announce a new president," said Innocent Chukwuma, chairman of the Transition Monitoring Group, a respected Nigerian observer mission. Max van den Berg, head of the EU team, said: "For now the assessment is outspokenly negative... I'm very concerned."
9 Nigerian banks make World Bank list
The Nigerian banking industry is poised for greater productivity this fiscal year as nine banks made list of top 1,000 World Banks ranking and top 25 banks in Africa.
Why Investors Shun Nigeria - World Bank
The Country Director, World Bank in Nigeria, Onno Ruhl said that unstable power supply, lack of access to finance, high cost of financing businesses, high taxation, poor infrastructure, corruption and macro-economic environment are some of the reasons for poor investment in Nigeria.
UNEP on Ogoniland oil spill
The environmental restoration of Ogoniland could prove to be the world's most wide-ranging and long term oil clean-up exercise ever undertaken if contaminated drinking water, land, creeks and important ecosystems such as mangroves are to be brought back to full, productive health.
A major new independent scientific assessment, carried out by the United Nations Environment Programme (UNEP), shows that pollution from over 50 years of oil operations in the region has penetrated further and deeper than many may have supposed.
Nigeria is 14th most failed state
DESCRIBED as only better than Somalia,
Sudan, Chad, Democratic Republic of Congo, Haiti, Zimbabwe, Afghanistan, Central African, Iraq, Cote d'Ivoire, Guinea, Pakistan, and Yemen, Nigeria has once again been ranked 14th most failed state in the world.
This is out of the 177 countries considered in the ranking by the Fund for Peace, an American independent non-profit research and educational organisation that works to prevent violent conflicts and promote sustainable security in the world. According to the 2011 result which is the seventh annual Failed States Index report, Nigeria maintains its same position as that of last year, except Kenya which is now more improved than Nigeria and moved out of its 2010 13th position, while Yemen who was a step better than Nigeria, now in twelfth position, a step poorer.
Nigeria was 15th in 2009, 18th in 2008, 17th in 2007, 22nd in 2006, 54th in 2005, which means that its 14th position assumes its worst stagnant status since 2007. The fall from 2005 to 2006 was sharp, while it has since then been maintaining the margin of one of the most failed in the world, having just a status of being better than just other eight countries in the world.
Considering the indicators used for the ranking, Nigeria's worst scoring categories were in Group Grievance (9.6), Uneven Development (9.0), Legitimacy of the State (9.0), Public Services (9.0), Security Apparatus (9.1), and Factionalised Elites (9.5).
According to the summary analysis on Nigeria, "the country's deep grievances along religious and communal lines have resulted in violence in the Niger Delta region, the Middle Belt, and the North. There is also endemic corruption and deep distrust of the state, inadequate public services, and security forces that often operate with impunity. The country is also subject to campaigns of violence by a number of militant and militia groups, including the Movement for the Emancipation of the Niger Delta (MEND).
"Finally, there are deep divisions among the political elites. In this year's elections, there was controversy over whether the incumbent president, Goodluck Jonathan, a southerner who took over after the death of Umaru Yar'Adau in May, should receive his party's nomination. Traditionally, power has rotated between politicians from the North and South. President Jonathan was successful both in receiving the nomination and in winning re-election," the report stated.
Ghana, however, had the best regional score in the Central and West Africa, while Chad, Cote d'Ivoire, Central African Republic, Guinea have the worst.However as Africa's largest oil producer, Nigeria shows the worst performance amongst its oil producing states colleagues, as most of the troubled middle east countries and disaster affected nations are even more stable in ranking than the giant of Africa.
Uduma Kalu is the Literary Editor of The Guardian in Nigeria, a published poet, and the national publicity secretary of the Christopher Okigbo Society.
Nigeria, the collapse of infrastructure and pubic sector industries
PRESIDENT Goodluck Jonathan on August 5 inaugurated a council to look into public companies acquired but mismanaged by private investors. The president had frowned at the way the privatised companies were being mismanaged, saying, “these enterprises have been privatised and over the period, some of them over 10 years, are still dead”, even though government spent huge amount of resources on setting up the enterprises.
The idea was not just meant to make money for the government but to create jobs and wealth for the people. Earlier in July, a motion was moved at Senate to probe the Bureau of Public Enterprises, BPE, over its failure to turn around the fortunes of privatised federal government-owned companies.
The motion said,”… there are massive loss of jobs and colossal loss of economic returns to the Nigerian economy. For example, the privatised steel sector that used to employ up to 20,000 workers, now have less than 4,000 after the exercise. The Electricity Meter Company of Nigeria, Zaria that was privatised in December 2002, recently fired about 90 per cent of its workforce.”
The senators listed The Daily Times Plc; the Electricity Meter Company of Nigeria, Zaria, the Peugeot Automobile of Nigeria, PAN as some of the companies that are not working. But this trend began 113 years ago, with the electricity industry. There are also companies, some not even privatised and are also not doing well. They range from agriculture to manufacture, transport, steel, telecommunications etc. Below are some of the industries.
Nigeria Airways Ltd., more commonly known as Nigeria Airways, was founded in 1958 after the dissolution of West African Airways Corporation. It was wholly owned by the Government of Nigeria, and served as the country’s flag carrier.
The airline was headquartered in Abuja. It had its heyday in the early 1980s, just after a KLM team two-year-management period; at that time, its fleet comprised about 30 aircraft. It ceased operations in 2003. Plagued of mis-management, corruption, and overstaffing, at the time of closure, the airline had debts for more than US$ 60 million, a poor safety record, and its operative fleet comprised a single aircraft flying domestic routes as well as two leased aircraft operating the international network. It was succeeded by Virgin Nigeria.
Initially, the airline was a tripartite entity in which the Nigerian government, BOAC, and Elder Dempster Line all had a participation. The Nigerian Government held a controlling interest of 51% of the shares that was boosted to a 100% on 1 May 1959. On 22 January 1971, the company was rebranded as Nigeria Airways.
Nigerian National Shipping Line
Nigeria formed the NNSL in 1957. At first, 33% of the capital was held by the Elder Dempster Line and 16% by the Palm Line, both British companies, while the Nigerian government held 51%. In 1961, the Nigerian government acquired all the shares. The NNSL started operations in 1959 with three vessels. By 1964, it had grown to a total of 16 vessels.
The public company was assisted by private businessmen. The tycoon Sir Louis Ojukwu was an early member of the board, dying in 1966.
In 1988, the National Maritime Authority granted six Nigerian shipping lines “national carrier” status, including the state-owned Nigerian National Shipping Line. The NMA planned to extend this status to more domestic companies so as to reduce control of trade by foreign-owned lines.The Shipping Policy Decree of 1987, which established the NMA, gave approval for a 50-50 share between foreign and domestic lines for non-conference cargos.
However, in 1988, the 24 ships of Nigerian national carriers including the NNSL took only 11% of the cargoes at Nigerian ports. The NNSL and the private companies suffered from financial problems and lacked the facilities needed to attract cargoes. In the 1990s, several of the company’s vessels were seized in different parts of the world for alleged breach of contract and unpaid bills.
The NNSL was liquidated in September 1995. Its assets were assumed by the newly formed National Unity Line (NUL). The NUL, fully owned by the Nigeria Maritime Authority, began commercial operations in July 1996 as Nigeria’s national flag carrier.
The NUL had just one ship, MV Abuja. In August 2005, the government put the NUL up for sale. The company now had no vessels, but owns a shipping licence. In July 2010, it was reported that the Nigerian Maritime Administration and Safety Agency, the successor to the NMA, had completed arrangements to establish a new national shipping line for Nigeria. A fresh attempt was made to relaunch and sell the NUL in 2011.
Nigerian Railway Corporation
The Nigerian Railway Corporation is 112 years old and it runs a unilaterally designed track system of 1067mm cape gauge. Railway construction was started by the British colonial government in Nigeria in 1898 from Lagos in the Southern Protectorate. The Nigerian Railway Corporation (NRC) was established by an Act of Parliament in 1955 for the main purpose of carriage of passengers and freight in a cost-manner.
In 1983, NRC carried 15.11 million passengers, generating more than N29 million (80 naira = US$1), but the levels had nose-dived by 1993 to about 1.50 million passengers, generating less than N15 million. In 1993, NRC hauled only 106,000 tonnes of freight to earn N25. 84 million.
This disheartening downward trend, which reached an all-time low in 1993, was the result of government neglect—almost no government funds were released to the railways during this period. Operations were paralysed and NRC was forced to prune its workforce from 40,000 staff in 1984 to 23,800 in December 1992, but even this smaller number of staff was owed 9 months salary.
The system was on the verge of total collapse, NRC properties depreciated greatly in value and some were vandalized beyond repair. This marked the beginning of the end of an effective railway network. Presently, NRC has a staff strength of about 14,000.
Similarly, at independence in 1960, NRC had 257 locomotives, 339 carriages and 3885 freight wagons to serve an estimated population of about 21 million people over 3505 route_km. However, by 1995, the rolling stock levels had dropped to 70 locomotives (with 50% daily availability from 1995–96), 150 carriages and 1500 freight wagons to serve an estimated population of about 88.5 million people.
NRC went more than once into bankruptcy during the last 20 years. Lack of maintenance on infrastructure and rolling stock and a high number of employees the railway produced huge deficits, not taken over by the state.
CCECC and NRC Rehabilitation Project 1995–99
With a $6-million contract, NRC now with 41 locomotives has resumed Jos–Port Harcourt, Abeokuta–Kano, Lagos–Idogo services, as well as Lagos mass transit and other suburban commuter services that had been abandoned for the past 15 years.
However, the impact of this project on train speeds is yet to be noticed.
Youths seeking for jobs
Ajaokuta Steel Company
Decree No. 19 of 14th April, 1971 gave legal backing to the establishment of erstwhile National Steel Development Authority (NSDA) that was charged with developing iron and steel production for the country. Report says since Shagari’s ouster from office, no reasonable progress has taken place in the steel sector. Russians facilitated the Ajaokuta steel project, which has gulped $4.6billion. Today, it is in ruins and remains a shadow of its potentials.
In a chat with journalists in Lokoja recently, Minister of Information and Communication, described the Ajaokuta project as a protracted national problem. “It is an example of how a national leadership that lacks direction can ruin its own nation. You award contract in Ajaokuta, and the power plant is executed by Russians; the civil work done by France and so on. From there, you would know there is a problem. Ajaokuta is a problem we have inherited and we are looking at it.”
A recent visit to the site revealed that virtually all the implements, plants and the various departments in the company located at the bank of River Niger in Kogi State are 100 per cent ready for full production; yet, it has never been put into active use. During a recent visit of the Presidential Projects Assessment Committee (PPAC), which was led by former FCT Minister, Architect Ibrahim Bunu, Architect Yomi Awoniyi, Mrs. Funmilayo Oyeyipo and other members of the committee, it was identified that about $580million was required to give it a new lease of life and bring the ‘sleeping giant’ to attain the 1.3 million tones production capacity, for which only the first phase was built. Delta Steel Company (DSC) i also in comatose.
Nigerian Paper Mills, Iwopin, Oku Iboku
The multi-billion naira Nigerian Pulp and Paper Mill, Iwopin, Ogun State, may soo be consigned to the waste bin. The paper mill was established by the Murtala/Obasanjo administration in 1976 while the Nigerian Newsprint Manufacturing Company, Oku–Iboku, Akwa Ibom State, was established by the Babangida regime but all have gone comatose. Balogun urged the Federal Government to resuscitate the paper mill in the interest of creating jobs. The mills were to cushion the effect of over dependence on imported papers especially by the media industry. The project had suffered so many setbacks and neglect by subsequent administrations in the country.
Peugeot Automobile Nigeria Limited
Even though there is the National Automotive Council, charged with the duty of ensuring the survival, growth and development of the Nigerian automotive industry using local human and material resources, Nigerian roads are littered with imported second_hand cars. Yet, Automobile Nigeria Limited, PAN, was incorporated in December 15, 1972 as a Limited Liability Company with an authorized share capital of N3m.
Twenty_seven months after incorporation, then head of State, General Yakubu Gowon, commissioned the assembly plant on March 14, 1975, though full operations had commenced on March 2, 1975. In 2009, reports said PAN, in danger of collapse due to lack of government patronage, and the high cost of doing business, planned to lay off 5,000 of its workers. From a record production of 264 cars per day in the 80s and great strides made in developing local content, and producing/assembling cars fit for Nigerian roads, PAN went down to the production of a mere 22 cars per day. Its production lines are under-utilised, they are deteriorating.
Anambra Motor Manufacturing Company (ANAMMCO) , once jointly owned by the Nigerian Government and the Mercedes Benz of Germany, South Eastern states and some Nigerians, used to assemble Mercedes Benz trucks, creating jobs for many, but today, the company has since closed shop. By 2008 it could not even pay the retirement benefits of its workers.
The Volkswagen of Nigeria
This company became a strong symbol of Nigerian industry and enterprise in the 70s. Nigerians embraced Volkswagen models -the unbeatable Volkswagen Beetle, the Igala, LADA and other brands, and like ANAMMCO, Volkswagen provided employment for thousands. Now owned by Barbados Ventures Ltd, following privatization in 2006, VWoN is moribund. It no longer assembles any car; it is reduced to the importation of fully built-up vehicles from Europe and Asia.
Nigeria’s agricultural import is over $4.2billion annually. This is for local consumption. The Group Managing Director of Oceanic Bank International Plc, Mr. John Aboh, in a lecture at the Private Sector Lectures Series of the Faculty of Management Sciences of the Benue State University in Makurdi, said Nigeria, “By the 2000s, Nigeria’s global share of exports of these crops was five per cent or less; today, Nigeria is a net importer of agricultural produce with imports (including wheat, fish, rice, sugar and others) totalling $4.2billion.” Also, Nigeria imports 1m tonnes of rice, valued at $700m or aboutN106 billion, from the Peoples Republic of Thailand every year. Nigeria is the second largest importer of Thai rice in Africa. What is the role of FADAMA, the river basin authorities, the ADP, the reasearch centres such as NIFORS said to be in its shadows, World Bank agricultural projects? Why the huge expenses on agriculture?
The Daily Times of Nigeria is a newspaper with headquarters in Lagos, Nigeria. At its peak, in the 1970s, it was one of the most successful locally owned businesses in Africa. The paper went into decline after it was purchased by the government in 1975. What was left was sold to a private investor in 2004. Operations were suspended in 2007. As of April 2011 the fate of the paper was uncertain, being the subject of various lawsuits.
The Daily Times of Nigeria was incorporated on 6 June 1925 by Richard Barrow, Adeyemo Alakija and others. They printed the first copy as The Nigerian Daily Times on 1 June 1926.
The Federal Government of Nigeria acquired 60% of the Daily Times and its main rival, the New Nigerian Newspaper, on 1 September 1975. Circulation steadily declined as the administrations of Generals Ibrahim Babangida and Sani Abacha tightened control over the newspaper in the 1990s, and the public turned to livelier independent publications
The newspaper was mismanaged. On 16 December 1998, shortly before the return to civilian rule, hundreds of workers of the Daily Times began an indefinite strike because their salaries were five months in arrears. Under the civilian administration of President Olusegun Obasanjo, the Bureau of Public Enterprises started the process of returning the Daily Times to private ownership.
After a failed attempt at a public offer (IPO), the Daily Times Nigeria Plc was advertised for sale in 2003. In 2004 Folio Communications was approved as the preferred bidder, gaining control with 96.5% of shares. The sale process was confused, resulting in various lawsuits. Former employees did not receive their termination benefits. Later, Folio did pay some of the employees who had been laid off when the newspaper was closed in 2007, but many had not been paid by 2010 despite efforts by their Union to obtain the money owed them. Today, the print newspaper has still not restarted production.
Nigerian Refineries: Port Harcourt, Warri, Kaduna
Dilapidated infrastructure, ageing plants and a lack of investment have held back Nigeria’s refining industry for years, while militant attacks worsen the situation. The Port Harcourt Refining Company Limited (PHRC) is one of the 10 subsidiary companies owned by the Nigerian National Petroleum Corporation (NNPC). The refining complex is comprised of two refineries: the Old Port Harcourt Refinery (OPHR) with a processing capacity of 60,000BPSD and the New Port Harcourt Refinery with processing capacity of 150,000 BPSD. The combined total refining capacity of the complex is 210,000 BPSD. The company produces Liquified Petroleum Gas (LPG), Premium Motor Spirit (Gasoline), Dual Purpose Kerosene (DPK), Automotive Gas Oil (AGO), and Fuel Oils. Its facilities are located on the same site at Alesa_Eleme, some 25 kilometers East of Port Harcourt, the capital of Rivers State and occupies an area of about 900 hectares.
Nigeria imports 30 million daily litres of fuel for consumption. But the actual Nigeria’s demand is about 85,000 bpd more than the combined refining capacities of all the state_owned, state_run, poorly_maintained, and chronically_dysfunctional refineries at Warri (WRPC), Port Harcourt (PHRC), and Kaduna (KRPC), or about 230,000 bpd more than the quantity of crude oil (300,000 bpd) allowed by the Federal Government of Nigeria for domestic refining and consumption, or/and about 440,000 bpd more than the current ultra-low efficiency domestic refining operations in Nigeria, an NNPC officil said.
Refining below capacity
“Warri is up to 75 per cent and the rest are between 60 and 70 per cent,” NNPC spokesman, Levi Ajuonuma, said. “In another couple of weeks, we will be ramping up production. The key is pipeline security,” he added.
He admitted that the optimal level of operation by Nigeria’s four oil refineries stands between 60 and 75 per cent capacity. Nigeria is Africa’s largest crude exporter, shipping more than 2m bpd to thirsty consumers in the United States, Europe and Asia, but sub_Saharan Africa’s second largest economy has to rely on imports for 85 per cent of its fuel needs.
Power Holding Company of Nigeria
The history of electricity development in Nigeria can be traced back to the end of the 19th century when the first generating power plant was installed in the city of Lagos in 1898. From then until 1950, the pattern of electricity development was in the form of individual electricity power undertaking scattered all over the towns. Some of the few undertaking were Federal Government bodies under the Public Works Dept, some by the Native Authorities and others by the Municipal Authorities.
By 1950, in order to integrate electricity power development and make it effective, the then colonial Government passed the ECN ordinance No. 15 of 1950. With this ordinance in place, the electricity department and all those undertakings which were controlled came under one body.
The ECN and the Niger Dam Authority (NDA) were merged to become the National Electric Power Authority (NEPA) with effect from the 1st of April 1972. The actual merger did not take place until the 6th of January 1973 when the first General Manager was appointed. NEPA, from 1989, has since gained another status_that of quasi_commercialisation. By this, NEPA has been granted partial autonomy and by implication, it is to feed itself. The total generating capacity of the six major power stations is 3,450 megawatts.
In spite of considerable achievements of recent times with regards to its generating capability, additional power plants would need to be committed to cover expected future loads. At present, efforts would be made to complete the on_going power plant projects. Plans are already nearing completion for the extension and reinforcement of the existing transmission system to ensure adequate and reliable power supply to all parts of the country.
What is currently referred to as the Power Holding Company of Nigeria was formally known as National Electric Power Authority. For several years, despite consistent perceived cash investment by the Federal Government, power outages have been the standard for the Nigerian populace, however, citizens of the country still do not see this as normal.
Nigeria’s cement industry
The Federal Government had formulated a policy in 2001 whereby only manufacturers or those building local factories would be allowed to import cement. Between 2000 and 2006, Nigeria imported about 40million metric tonnes of cement at a cost of over $3bn, according to manufacturers. Some of the companies like the Nkalagu cement Company e dead or sold or working below capacity. Last year, the FG ordered Customs Service to approve the importation of 2.5million metric tonnes of bulk cement by six local manufacturers to cover shortfalls in cement supply for the second half of 2010, showing the state of the industry.
According to the Cement Manufacturers’ Association of Nigeria (CMAN) the main raw materials needed in cement manufacturing are abundantly available, dotting over 70 per cent of Nigeria‘s landscape. Last year, the demand for cement in the country was between nine and 10million metric tonnes while local production was about 5.7MMT, according to government’s projection. Government said cement manufacturing firms spent 40 per cent of their costs on energy, a situation that made their products uncompetitive with their foreign counterparts.
United Textile Mills Limited (UNTL), Kaduna
Prior to 1997, the Nigerian textile industry remained the second largest in Africa after Egypt’s, with over 250 vibrant factories operating above 50 percent capacity utilization. Then, the local textile market had a share of about 20 percent of Nigeria’s textile products with the balance of 80 percent being imported. As at 1980, the textile industry in the country could boast of over 125 textile factories but today only about 25 are still producing, as most of them have closed shop. For instance, Afprint, a once household name in textiles in Nigeria has since diverted to other business. The company is now selling cars.
Some of the once thriving textile firms in Nigeria that have closed down their operations are the International Textile Industry (ITI) with factories in Isolo and Ikorodu, both in Lagos, with 800 people losing their job, First Spinner Ltd, Ikorodu, Lagos, with about 500 employees; Bhojr Textile Industry with about 700 people out of jobs; Reliance Textile Ikeja, Lagos, with about 500 people sacked; Fahibdayekh and co Ltd in Kano, with more that 1000 people sent into the labour market and Atlantic Textile Mill in Lagos which finally closed down in 2008 with about 800 people losing theirt jobs.
The existing factories which have since been cutting down on jobs owing to inability to cope with high cost of production are operating at below installed capacity. The loss of job in the sector hit about 10,000 when the largest textile company in the country, the United Textile Mill in Kaduna State closed down with about 5,000 people sent to the labour market.
The Federal Executive Council under the Olusegun Obasanjo administration instituted a N70 billion Textile Bailout Revival Fund to inject life into the ailing textile sector with a mandate given to the United Bank of Africa (UBA) and the Nigeria Export Import Bank to source for and disburse the approved N70 billion to the stakeholders.
The disbursement of the loan was later to be handed over in March, 2009 to the Bank of Industries and government jerked up its total commitment to N100 billion. However, stakeholders seem to be divided over whether the N100 billion bailout funds would be able to revive the industry. The United Textile Mills Limited (UNTL), Kaduna, reportedly gained access to the fund to begin the renovation of its dilapidated factories. Other textile industries are also said have received money from the bail out fund.
On this day 51 years ago, the British Union Jack was lowered and replaced by our national Green-White-Green flag, heralding the independence of our nation. The 1st of October remains a special day for us, for Africa, and indeed the world.
As we celebrate today, we remember with pride, the nationalism and patriotism that inspired our founding fathers and the Nigerian people. They set aside their differences, to secure the unity and independence of our great country.
That is the Nigerian spirit! For the Nigerian spirit cannot be broken. We are a resilient nation, determined to chart a course, through the turbulent waters of nation building. The Nigerian spirit is vibrant today in the world.
Our citizens at home and abroad, are making their mark in all fields of human endeavour. These hard-working and committed Nigerians, remain a source of pride to us and a beacon of what is achievable, if we remain focused and determined.
I know that a great number of you are joining hands with me and the Administration, in the great task ahead.
I value all Nigerians. I see our youth who are looking for jobs and yet remain hopeful. I see the farmer, and fisherman, toiling everyday to earn a living. I see the teacher, working hard, to train our future generations, with much sacrifice. I see the market women whose entrepreneurial spirit helps to generate income for their children and families. I see our sportsmen and women training hard to bring glory to our nation. I see our resilience and commitment, as a nation, to defend our democracy and secure our future.
I see every single profession and vocation, making positive contributions to national progress. I value you all!
Together, we shall work for a Nigeria in which democracy and the rule of law are sacrosanct.
A country where corruption and its attendant vices, are banished. A country where human life is sacred and respected, and where the rights of the individual are protected.
Nigeria is a young entity in the comity of nations and yet in her 51 years, she has made significant strides in making her presence felt all over the world. Our diplomatic and peacekeeping efforts, in various parts of the continent, have helped to end conflict and avert crises. In sustaining global security, our intervention has been crucial to peace, progress and democracy for the citizens of the affected countries.
The journey to nationhood always has its own challenges. Nigeria has had her own share. Our growing pains as a nation have included the civil war, the June 12 election crisis and restlessness in the Niger Delta. But Nigeria has always overcome each of these challenges. We overcame before. We will overcome yet again.
Today, as a nation, there is much for us to celebrate. We celebrate our diversity. We celebrate our entrepreneurial spirit.
We celebrate our resilience and ability to turn adversity into hope. We celebrate our culture. For the labours of our heroes past, shall never be in vain.
As your President, let me reassure all Nigerians that I remain resolutely committed to the ideals and dreams of our founding fathers. Let me also reassure Nigerians that I will strongly defend the peace and stability of our nation.
My administration will spare no effort in fighting crime, building peace, and securing our homeland against internal threats and infiltration by violent groups, from outside our borders.
We condemn all acts of violence and declare that such acts of mindless savagery shall not be allowed to define our country. We will not be deterred. Our resolve is strong.
I have put in place a new and reinvigorated national security strategy, to combat the threat to our safety. Yet, no matter what I do as your President and no matter what we do as your elected leaders, at all levels, the peace and security of our nation rest also on our collective efforts as citizens, in our various communities.
All leaders and citizens, in every community, must therefore make peace the number one priority of their daily routine. This is because, without peace, no community can realize its objectives or achieve a happy and productive life for its members.
The current incidents of violence and terror, in parts of the country, will surely be overcome. We will secure the safety of our citizens for only when we do this, will we be able to build the needed peace and tranquillity in all parts of the federation.
Securing our peace and stability will ensure economic growth and prosperity for all.
Since I assumed office, as the President of our great country, I have continued to focus my attention on the economy. I have taken several measures to address structural weaknesses which stand between us and economic growth and prosperity for all.
We are growing our economy, to generate employment opportunities for our teeming youth and enhanced prosperity for every citizen. This remains the main focus of my administration.
In a few days time, I shall launch an innovative competition for our young entrepreneurs to come up with ways to expand their businesses, create more jobs, and sharpen their business skills.
Now, it is very clear that without fundamental reforms in the key sectors of our economy, we will not be able to fully unlock our potential as a nation. We must manage our resources more prudently and efficiently. We must provide stable electricity to our citizens to help drive economic activity.
I call on our political leaders to put aside partisan politics, for united action towards the advancement of our nation. We must build together.
Because of the measures we have taken on the economy, our GDP is today one of the fastest growing in Africa. We are currently growing the economy at 7.8%. We expect to sustain an 8% growth rate and a better GDP in the medium term, on our journey towards realizing our Vision 20:2020 goal.
We shall strive to make this growth, job creating and inclusive.
Growth in agriculture and other non-oil sectors are crucial, to help diversify the economy and to generate much needed jobs. Agriculture remains one of the highest priorities in my government’s Agenda for National Transformation. We have set out clear, agricultural, transformation action plans and policy measures, to achieve self-sufficiency in the production of rice, cassava, maize, sorghum and other staple foods.
Self-sufficiency in rice alone will save us the 356 Billion Naira that we currently spend annually importing rice. We will revamp the way we distribute fertilizers, taking government out of distribution of fertilizers.
We plan to reach 20 million farmers with private-sector distributed fertilizers over the next four years. We will improve the investment environment and incentives for the private sector across the agricultural value chains. Our agricultural transformation plan will generate 3.5 million jobs and an additional 20 million metric tons of food.
But we must all show pride in our farmers. We should eat what we produce. The increasing popularity of local products, like ‘Ofada Rice’, ‘Badegi rice’, and ‘Abakaliki Rice’, attest to the fact, that the populace will readily embrace locally grown produce.
We must also take pride in our scientists. This week, Nigeria released 8 new high yielding cocoa varieties. This will help to transform cocoa production, across the 14 cocoa producing states in the nation.
We have put in place implementable programmes to transform our Nation from an importer of petroleum products, to the regional hub for exportation of value-added petroleum and petrochemical products. We are revamping existing refineries and building three new ones.
We are effectively supporting the private-sector led construction of world scale petrochemical and fertilizer plants. This will for the first time in our history, result in effective monetization of our abundant natural gas resources while at the same time, creating over a million jobs.
Our potential is huge.
We have the requisite market volume.
We have a youthful, energetic, and hardworking population.
The structural and managerial bottlenecks, that have obstructed our economic growth, are being addressed, to unleash the energy and potentials of this nation.
To achieve this, I am determined to ensure that Nigerians have reliable electricity. Our economy will grow faster, and our hard working small businesses will thrive, when we finally fix the power challenges we face. We are fast tracking power reforms, to improve the generation and distribution of electricity.
Already, we are beginning to do things differently. I believe that integrity, honour, patriotism, selfless service and fear of God, must be the hallmarks of leadership at all levels.
A nation is sustained by its institutions and systems. I have taken strong measures to improve on governance. It is in this regard, that I signed into law, the Freedom of Information Act. I will further strengthen all institutions, to ensure greater transparency, probity, and accountability at all levels.
Last year, I promised to restore confidence in our electoral system and pledged to deliver free and fair elections. To achieve that, we initiated some electoral reforms and strengthened INEC and other related agencies.
As a result, our April 2011 general elections was adjudged by Nigerians and the international community as the most transparent and credible elections, ever conducted in our country. Indeed, post-election petitions reduced by over 50%.
Let me assure all Nigerians of my resolve to lead our nation into a safer, more peaceful, and prosperous future for our children.
For the time has come, to rise above ethnic and religious divisions;
The time has come, to unite against violence, in all its ramifications;
The time has come, to secure our peace, and unite against suffering, and deprivation;
I see a new Nigeria rising. A Nigeria, that is economically strong. A Nigeria, that takes its rightful place of leadership in the world. A Nigeria, that uses its diversity to reinforce its strength. A Nigeria, we all can be proud of.
This is the Nigeria we need and this is the Nigeria, we all must build.
As we celebrate today, let us resolve to build the Nigeria of our future.
I thank you.
God bless you all.
And God bless the Federal Republic of Nigeria.
It has actually already started as Nigeria is on GMT, but as I have mentioned in several posts, I am extremely parochial and as I write this in North Oxford, Massachusetts (GMT – 5) it is not even 22:00 on September 30. Nonetheless bloggers in Nigeria and elsewhere have started posting 419 Reasons to like Nigeria. The coordinating force is 419Positive.org. They provided me with something to post, but the Forbes guidelines require that I put original material up and you can find their release plenty of other places, like here. Plus I would screw up the graphics, anyway. And I already posted my 419 reasons.
Now 419Positive.org has been around for a while so the idea of having a bunch of bloggers post 419 reasons to like Nigeria is not really that innovative. Still you might wonder who came up with that specific idea. Well, as it happens, that would be me. Here is where I suggested it. See if you can find anything earlier. So how does this idea come from a parochial, untravelled American tax blogger, who is entierly of Irish descent? Well it started out with me apologizing to Nigeria.
Blame it on Bernie Madoff
In the aftermath of the Madoff debacle, I found myself doing research on theft losses. There was one case that really struck me at the time – Curis H. Muncie 18 TC 849. Dr. Muncie had been taken to the cleaners by some Mexicans with a story about a fellow imprisoned in Mexico who needed his help recovering $375,000 in a trunk in New Orleans. Dr. Muncie ended up being bilked out of about $9,000 which he wanted to claim as a theft loss. He won the case, but the thing that really struck me about the case was a comment by the judge:
The petitioner was the victim of the ancient “Spanish prisoner” swindle and under the laws of Mexico, Mexican Penal Code, sections 386 and 387, dealing with fraud, the facts set forth above constitute a theft of the petitioner’s money.
The case stuck with me and when I thoughtlessly insulted Nigeria, I realized that is what I could use it to apologize. I came up with the rather pithy phrase “Fraud has no nationality.” Now as noted in some other places I am not the first person to remark on the similarlity of the advance fee scams to the classic Spanish prisoner fraud. And I have even read that the derivation of the advance fee scam might have nothing to do with the Spanish prisoner or possibly like the synopitc gospels they might both derive from some even more ancient common source. Nonetheless Nigerians have been suffering from the fallacy of the undistributed middle.
Fallacy of the Undistibuted Middle
One of the best illustrations of the fallacy of the undistributed middle in our culture is the example of Italians and the Mafia. According to Mario Puzo’s novel The Godfather – (and I was assured by several people that I delivered Tony Genaro’s deliscious bread to in Fairview NJ it was quite a reliable source) Italian descent is an absolute requirement for Mafia membership. Accepting that premise some people will go onto think that any Italian they meet, particularly a successful businessman must be part of the Mafia. That is the fallacy of the undistributed middle which has the form:
The fallacy of the undistributed middle takes the following form:
All Zs are Bs
Y is a B
Therefore, Y is a Z
It is a nasty perniscious thing. Now it happens in the case of Italians in America that it is mitigated by many positive associations. The bread alone, particularly Genaro’s, although Scala’s was also pretty good, would motivate residents of Fairview NJ to love Italy, regardless of their ancestry. In the case of Nigeria, though, at least in my parochial circles, the advance fee scam is the only thing associated in people’s minds with Nigeria. Also I should note that in the case of Nigeria and advance fee fraud, even the first premise is not true.
Bloggers should pay attention to the comments they get particularly the critical ones. When the commenters are right and you are wrong, be quick to admit it and apologize. It worked for me anyway.
Peter J Reilly is a Forbes contributor. The opinions expressed are those of the writer.
A nation that wishes to survive, does not pursue polices that divide the people along primordial fault lines. It does not emphasise indigenousness but rather citizenship.
A nation that wishes to survive, does not pursue polices that divide the people along primordial fault lines. It does not emphasise indigenousness but rather citizenship. In Nigeria, indigenousness has assumed more significance than citizenship. State governments in several parts of Nigeria are discriminating against Nigerian citizens because they are not indigenes of the area. For many years, states in the North only employ southerners in its civil and public services on contracts. Currently, some states have resorted to expelling non-indigenes from its public and civil services.
This retrogressive, undemocratic and discriminatory practice is assuming a sinister dimension. This is Apartheid practised on Nigerians by Nigerians, in a country that claims that it is serious about remaining one and united. People who have suffered from this discrimination leave with their faith in Nigeria shattered and very unlikely to believe in it as a country. They would be very vocal for understandable reasons, in the agitation for mono-ethnic states and break up of Nigeria. This is just one example of how government policies are aiding the break up Nigeria.
Great nations are built on the principles of equality, tolerance and respect for individual liberty, and not on corruption, mono- ethnic prejudices, discrimination and intolerance. The policy of expelling from states civil services, Nigerians who even though have lived all their lives in a state but not indigenous to the state, is one of the greatest threats to the continuing existence of Nigeria as a united nation. If President Jonathan is serious about the continuing existence of Nigeria as a united Country, he should bring this practice to an immediate end, and all the people dismissed from their jobs restored to their posts.
To survive as a Nation, Nigeria should be pursuing policies that enhance integration, abolish discriminations, enhance the devolution of power to the regions and empower its citizens through safeguarding their fundamental human rights. These are the policies that ensure the viability and survival of countries as multi ethnic states.
These policies would drastically reduce the cost of government, unite the people and ensure accountability. People who claim that they are federalists drive the current policies, but are actually people who believe in mono-ethnic nations of Nigeria and support the balkanisation of Nigeria. These people have benefited from Nigeria and are more interested only in policies that would enable them keep their acquired advantage and will support the break of Nigeria because it would preserve their own selfish interests. Underneath the agitation for further degree of autonomy to the different ethnic nations that make up Nigeria, is selfish individualism and insularity. They offer no plan of how they would contribute to the development of other parts of Nigeria from which they have benefited from. Many of them cite the Switzer- land model for Nigeria but fail to state that resources from a particular region do not support Switzerland.
They want to have their own nation within Nigeria, sustained with natural resources from another part of Nigeria, which bear the ecological consequences of the extraction of the resources. This is wrong, unfair and utterly selfish. Nigeria should either exist as one country or break up into as many nations as the people want. There cannot be a fair arrangement outside a single indivisible country founded on equality, tolerance, rule of law and liberty.
Therefore, I would argue that the Nigerian government change the direction of Nigeria’s development from state creation to regional governments’ development and integration. This would result in the establishment of between three and six regional houses of assemblies instead of thirty-six at the moment.
The monumental savings would bring development to the regions that would be dwarfed by anything that can be achieved through state creation. This is pure simple economics of scale and common sense devoid of prejudices. This will end one of the most stupid things Nigeria is doing which is fragmentation and duplication of government, which is why it spends about eighty per cent of its resources on government and has very little for real development.
This is one of the formulae that can ensure the survival of Nigeria as a united, viable and peaceful nation. No IMF or World Bank recommendations will bring down the cost of government in Nigeria to the point where real development and security would be possible, if we fail to seriously restructure the system of our government. We are the ones who will choose to make Nigeria viable or allow it to disintegrate.
Nigeria does not need thirty-six corrupt governors; state chief judges and millions of civil servants. We must learn to do more with less and stop doing less with more. Regional integration will safeguard the future of Nigeria, lay the foundation for her emergence as an African giant and even provide a conducive democratic plat- form should any region finally decides to go its own way as an independent nation.
The beauty of regional integration is that the states in a particular region can make a good economic argument for it and can find existing legal framework within the present constitution to go about it. What it requires is the will of the people and visionary leadership by incorrupt leaders.
Nigeria’s grip on inflation rate is becoming consistent at third quarter with a single digit at 9.3 percent, and with an impressive economic growth rate at 7.72 percent in August. So far a significant development and good track record is brewing, for at the beginning of third quarter inflation rate was 9.4 percent in July, and the latest recorded 9.3 percent shows a slightly declining inflationary trend.
But looking at the country’s misery indicators intrinsically – overwhelming poverty and crushing unemployment; these fabulous numbers are not making impact to the suffering masses that are without jobs and are etching out a living with less than two dollars per day. Economic experience by average Nigerian, who can barely feed his family three decent square meals per day cannot correlate with the economic expansion of the country’s GDP. Positive economic growth should fundamentally ameliorate the misery index, lest it become senseless and insignificant to the majority of Nigerians.
Before Nigerian financial and economic policy makers beat their chest and celebrate with their talking drums they should realize that the country is not yet out from the wood. The much talked removal of oil subsidy and its implementation has not been resolved and neither the recapitalization of collapsing banks has been ceased. Let’s not overlook the increasing growth in food prices, which is the biggest contributing force to the consumer inflation rate. The food inflation rose from 7.9 percent in July to 8.7 percent in August and that is not good.
With these enviable numbers on inflation and GDP rolling out from the National Bureau of Statistics (NBS), the life style and economic well-being of 70 percent of Nigerians are stagnant and deplorable. There is no adequate housing, the food prices are going beyond the reach of the poor while the scarcity of the expensive kerosene makes life unbearable.
Nigeria is in the midst of confidence building news on economy and one cannot downgrade it. With decreasing turmoil at the Niger Delta; oil production in the second quarter of this year is averaging 2.45 million barrels daily. This is an improvement compared to 2.35 barrels of the previous year with more turbulent Niger Delta.
Bloomberg reported that “Inflation in Nigeria, Africa’s biggest oil producer, stayed near the limit of a central bank target and the economy expanded 7.72 percent in the second quarter, keeping pressure on the bank to raise interest rates. The inflation rate fell for a second month to 9.3 percent, the lowest level in more than three years, from 9.4 percent a month earlier, Yemi Kale, head of the National Bureau of Statistics told reporters today in Abuja, the capital. “Much of the improvement in headline consumer price inflation can still be explained by the positive influence of domestic food prices, and this should continue in the months ahead,” Razia Khan, the London-based head of African economic research at Standard Chartered Bank Ltd., said today in an e- mailed note to clients.”
The numbers on joblessness is not forth coming and the tabulations by National Bureau of Statistics (NBS) may be misleading. The last number I saw on unemployment was 19.7 percent in 2010. The National Bureau of Statistics website is not current with the unemployment figures. The last number it recorded was 40 percent unemployment in 1992. The 19.7 percent was provided by the former minister of Finance Mr. Olusegun Aganga last year. He did acknowledge that almost half of Nigerian youths at the age group of 15-25 years were without jobs.
And with the massive unemployment devouring the youths of the country it might be fastidious to peg the unemployment at an extremely conservative number of 19.7 percent.The 19.7 percent is not a realistic number when the rural unemployment is put into consideration and effectively tabulated. Even with conservative extrapolation the joblessness in the rural Nigeria where most people live will make the tendered number laughable. The low technology and paucity of technical know-how makes the collection of data cumbersome and sometimes out of reach.
Onitsha Kerosene waiting
Writing about jobs in Nigeria, Nasir El-rufai the former minister of capital territory Abuja, could not arrived at the exact unemployment figure but nevertheless he used the official numbers and also made his own realistic extrapolation. This is the way he put it, “The jobless rates in Nigeria have not fallen. On the same day but at different functions, the Minister of Trade and Investment put the unemployment rate at 14-16 per cent, while the Finance Minister put it at 21 per cent. The actual figure may be much higher than both numbers. The millions of people with no jobs represent a serious impediment to Nigeria’s economic development. Apart from the immense waste of the country's human resources, it generates losses in terms of lower output which results in poorer incomes and increased poverty. It also causes social decay and inhibits national cohesion. In fact, unemployment in Nigeria is a national security threat.”
He also wrote that, “Nigeria has about 90 million people who are willing and able to work, but about 70 million of them have no gainful employment. This is an alarming figure, but when the 4.7 million people captured in the formal sector in the latest statistics from the Pensions Commission is increased by the three to four times standard multiplier to capture those in the informal sector, it means that only about 20 million Nigerians have jobs, out of a population of 162 million. This simple fact causes the country a loss of about N2 trillion annually from the absence of commercial activities that ordinarily should have taken place but did not.”
The lack of job is one thing that cannot be politicized for real people are suffering .Job creation must be initiated by government by creating the fertile environment that will attract capital and investments. Government does not necessary create jobs but does aid the private sector in making job creation possible and imminent. Nigeria’s favorable economic indicators on economic growth and inflation can become a precursor in solving the problem of unemployment.
Dr. Ngozi Okonjo-Iweala, a former World Bank Managing Director and Nigeria's current finance minister has been generating controversy mainly on whether or not the debt relief she worked to effect during her first coming as finance minister under the Obasanjo presidency could be regarded as an achievement.
Some also question the veracity of the loans, in the first instance, and that as such should have been repudiated, while others simply feel the woman is over rated. There are those who even question her loyalty to the Nigerian nation, insinuating that she owe more allegiance to the World Bank. By extension, does this mean that Nigerians who hold dual American citizenship automatically have greater allegiance to America?
One of the latest articles critical of Okonjo-Iweala's second coming was a two-part series by Dr. Ola Balogun in The Sun newspaper of Monday, August 22, 2011 and Tuesday, August 23, 2011 captioned 'Is Ngozi Okonjo-Iweala for Real" whose peg was my article captioned " Ngozi Okonjo-Iweala and her critics" published in The Sun on August 3, 2011.
I am in agreement with one aspect of his article where he pointed out that one of the African "experts" touted by the 'International Community' "include Mr. Alassane Quattara, who has now been installed as Cote D'Ivoire President by his Paris and Washington-based puppet masters". He apparently forgot to add Quattara's cheerleader friend in Aso Rock Villa.
Dr. Ola Balogun is also right in the general background he provided to the effect that the Bretton Woods institutions - The World Bank and The International Monetary Fund (IMF) - are fronts for Western agenda in developing countries and enforcers for the Paris and London Clubs of Western creditors. But he drew wrong conclusions and inappropriately put the blame for whatever he presumed was a rip-off of the country on Dr. Okonjo-Iweala.
A fundamental flaw with many commentators about the World Bank and IMF roles in developing countries, as well as those of industrial nations, is to ascribe any altruism to their actions. On the contrary. they act in their institutional and national interests, which are often at variance with those of developing nations. The poser is: Does Nigeria and its officials act in the nation's interest? In fact, has Nigeria established enduring core national interests and values? That is the fundamental problem which must be tackled. Except for Nigeria, self interest is the reality in international economic relations among nations.
The fact of the matter is that Nigerian officials have exhibited bareness of ideas, policy options and limited implementation capacity in the development process such that the nation becomes prey to well-packaged policies from external sources. Nigeria, which was a net lender to the World Bank in the early to the mid-70s, was to become a heavy borrower/debtor to the same institution and commercial banks within 10 years because it got 'persuaded' into a borrowing spree on the slogan that Nigeria is under-borrowed! So, for Dr. Balogun to put the blame for the idiocy of Nigeria's ill-conceived borrowings which got expended on ill-digested white elephant projects on the World Bank and the IMF, whose prescriptions are basically advisory, subject to the acceptance of the client nation, is therefore illogical. The problem is that Nigeria does not operate a knowledge-based economy or a knowledge-based anything, for that matter. It, therefore, gets easily bamboozled into signing enslaving agreements, contracts and loan deals which have made the country a honey pot for all kinds of economic adventurers.
World Bank Officials
World Bank President, A. W. (Tom) Clausen in an address at the Nigerian Institute of International Affairs in Lagos on April 15, 1982 had warned about the disquieting prospect of "an absolute worsening of circumstances for millions of Africans in the years ahead" but, nevertheless, admitted that "no single development strategy works best anywhere". Yet, Nigeria bought the Structural Adjustment Programme (SAP) menu of the IMF in 1986, the exact one strategy fits all approach that the WB warned against four years earlier, with the Chief Olu Falae-negotiated devaluation of the national currency -on IMF's prescription - practically bringing the economy to its knees.
On the debt payment, it should be seen as mutually beneficial. The creditor nations wanted to recoup whatever they can, lump sum, from a Nigeria reaping huge revenues from high oil prices before oil prices crash, while for Nigeria, paying $12 billion of the cumulatively compounded debt estimated at $30 billion rather than perpetually paying huge sums as debt service charge made financial sense. The point raised by Dr. Balogun that Nigeria had paid $50 billion as interest in debt service, more than twice the $17 billion principal originally owed, even makes a compelling case to negotiate a debt bargain, rather than paying debt service, ad infinitum. As to debt repudiation, that is not on the table because the international economic system is so structured as to impose punitive measures on the country that dared.
For those who believe debt repudiation is an option, the answer can be found in the 1983 Jodidi lecture delivered by Mr. Tom Clausen on February 23, 1983. In the lecture, titled 'Third World Debt and Global Recovery' at the Centre for International Affairs, Harvard University, Boston, Clausen had pointed out that while "the special risks of sovereign lending are not covered by bankruptcy laws", but since nations continue to exist as part of the global economy, they need finance. He stressed that "although many countries are unable to make payments on time, not one has repudiated its debt". The World Bank president then added the clincher: "The developing countries that have the biggest debts outstanding are deeply involved in international trade and technology, so for them the cost of being cut off from the world economy - which is the price of debt repudiation - would be enormous". This was not an idle threat, given the fact that the industrialized West controls the financial levers of the world. It is this enormous coercive power of the 'International community' that places developing countries at a disadvantage even when Clausen at that lecture conceded that there were "examples of imprudent borrowing and lending". But then, the weaker, borrower nations carry the can.
Olawunmi, a former Washington correspondent of News Agency of Nigeria, teaches in Department of Mass Communication, Bowen University, Iwo
Nigerian Governors say Sovereign Wealth Fund is unconstitutional
The Nigeria Governors` Forum (NGF) has called on the Federal Government to suspend the operation of the Sovereign Wealth Fund (SWF), saying it is unconstitutional.
The governors made the call in a communiqué issued at the end of its meeting on Sunday in Abuja, the nation’s capital, which was read by Governor Rotimi Amaechi of Rivers State, South-South Nigeria.
Mr. Amechi - River state
“Members resolved to call on the Federal Government to suspend the operation of the Sovereign Wealth Fund until all issues are resolved because it is unconstitutional,” the communiqué stated.
Earnings above the budgetary benchmark price of crude oil, are expected to be transferred to the fund set up to replace the country’s excess crude account.
The governors agreed to support the UN initiative on consultative competition on the achievement of the MDG’sat state levels.
They also called for the de-regulation and de-centralisation of electricity generation.
The communiqué stated that the governors reached the decision after listening to a comprehensive presentation on the need to increase the supply of electricity and reduce regulatory bottle-necks by the Executive Chairman of the Nigerian Electricity Commission, Dr Sam Amadi.
Polio eradication campaign
The governors re-affirmed their commitment to the first polio eradication quarterly campaign in which most states participated.
They urged the states that were not able to participate in the programme to do so as soon as possible.
"A sovereign wealth fund (SWF) is a state-owned investment fund composed of financial assets such as stocks, bonds, property, precious metals or other financial instruments. Sovereign wealth funds invest globally. Some of them have grabbed attention making bad investments in several Wall Street financial firms including Citigroup, Morgan Stanley, and Merrill Lynch. These firms needed a cash infusion due to losses resulting from mismanagement and the subprime mortgage crisis. Most SWFs are funded by foreign exchange assets. " - Wilkipedia
The composition and in auguration of Nigeria’seconomy management team by President Goodluck Jonathan, has raised an important question on the the ability of the individuals that make up the team to deliver on the electoral promises and economic agenda of the present administration.
Another important question to be considered is the size and composition of the team, and if anything meaningful can be achieved with such gathering of different minds, ideologies and intellects.
Already, concerns have been raised by economic analysts on the size of the team and the decision of the president to appoint cabinet members instead of experts from outside the government as practiced in other economies, such as the United States of America, where only five persons were named as members of the country’s economic team
These individuals appointed by Jonathan, are not new to Nigerians, they have been at the helms of affairs in Nigeria and in institutions across the globe for a number of years and at differnet times.
These individuals have played a number of roles in the economic history of Nigeria and the impact remains to be seen.
The President had named 22 individuals, including himself and the Vice President, Mohammed Namadi Sambo as Chairman and Vice Chairman respectively of the Economic Management Team, to help coordinate policies at both the federal and state levels.
Dr. Ngozi Okonjo-Iweala, Finance Minister, is expected to act as coordinator of the team.
Speaking on the inauguration, Jonathan said that it is aware that the states have their own economies but if there is no proper coordination in the management of the economy, between the Federal Government and the states, the country can not move forward.
With the setting up of the team, the stage has been set for the assessment of the present administration in terms of delivery of promises made to Nigerians during the electioneering processes.
It has also provided a platform for Nigerians to have a glimpse of the direction of the government or lack of it in terms of economic development and nation building.
However, he stopped short of mentioning the mandate and agenda of the economic team. It is no longer news that the Nigerian economy is on a continuous downward plunge and on the verge of a crisis situation, especially with the prevalence of corruption, epileptic power situation, declining foreign reserve, instability in the banking and financial sector, high prices of commodities, insecurity, declining value of the countries’ currency, dilapidated roads and transportation system, increasing inflation, declining industrial capacity, and unemployment to mention just a few.
Nigerians expect a new sense of direction, not a lack of direction and repeat or recycling of old ideas that have helped in no small measure in ensuring the continuous stagnancy and retrogression of the economy.
It is also imperative to look at some of the personalities that make up the team, vis-à-vis their roles, thinking and ideologies of Nigeria’s development and transformation.
In this regard, a number of individuals in the team come to mind. Barth Nnaji, a Professor of Mechanical and Industrial Engineering at the University of Massachusetts Amherst has on different occasion been a Special Adviser to President Goodluck Jonathan on Power and Chairman, Presidential taskforce on Power and presently Minister for Power. In his days as Special Adviser, during the early days of Jonathan’s presidency, till date, his presence has had no significant impact for the country, especially in the area of power.
It remains to be seen how he intends addressing the country’s epileptic power situation, especially as the country’s power generating capacity have continually been on a downward trend, dropping from about 4,000 mega watts to about 2,000 mega watts.
This has helped in no small measure in crippling the economy, as more businesses fold up on a daily basis, leading to a skyrocketing of the country’s unemployment situation.
Another member of the team that readily attracts attention is Mallam Sanusi Lamido, Governor of the country’s apex bank. His policies and activities in the banking sector have seen the government taking over the management of eight banks, and recently nationalizing three of them.
This led to a massive retrenchment exercise, in not only the affected banks, but in other banks which were forced to adopt stricter and tighter cash and management policies.
The same can be attributed to a number of individuals in the team, as they have failed to contribute meaningfully in driving the economy of the country to a meaningful level of national development since their appointment, as evidenced in the stagnation currently witnessed in the economy.
Reacting to the setting up of the economic management team, an analyst, Mr. Opeyemi Agbaje, Chief Executive, Resources and Trust Limited said, “I think as an economic ‘management’ team, this 24-person team is rather large. It may end up functioning more as a national economic “consultative” forum.
“Given the large size, I would expect them to create a working sub-committee chaired by Okonjo-Iweala and including Aganga, Shamsudeen, DMO, BPE, Atedo Peterside, Chief Economic Adviser and Special Adviser, Programmes and Monitoring.”
However, Agbaje said further, “The members are suitable and Okonjo-Iweala as coordinator is excellent. I support Nnaji’s power strategy which offers effective and sustainable solutions; the petroleum minister needs to focus on getting the PIB passed; and indeed the NEMT has to review the effects of Sanusi’s policies on employment, financial sector stability and growth; and private sector access to credit.”
In his own view, Mr. David Adonri, Chief Executive Officer, Lambeth Trust and Investment Company Limited said, “Members of the new economic management team have been carefully selected. It is composed of people with sound intellectual and performance pedigrees. I am confident that as people of high caliber, they will bring their distinctive competences into carrying out the team’s assignment to transform the Nigerian economy within the next four years.
“The major challenges that confronts the economy they must tackle are centered around corruption, insecurity and deficit of engineering infrastructure. For the economic management team to generate productive employment and increase wealth creating capacity, after defeating corruption and insecurity, the comatose heavy industrial sector comprising of Metallic, Power and energy industries, destroyed by state ownership must be restored to good health through private finance.
“The team must critically examine government’s fiscal indiscipline exemplified by increasing deficit finance of consumption which continues to pose serious threat to monetary stability of the economy. Finally, the team must stop the current practice of subsidizing consumption and commence the process of subsidizing production as done in industrialized economies.”
Also speaking, another analyst, Mr. Ephraim Emeka Ugwuonye,said, “The danger of what Jonathan has put together as the economic team is that it is too wieldy. The President is heading it himself. It reflects a difference without distinction. There are no clear criteria for the selection of its members, and thus it confuses everybody.
“Those unlucky Ministers who did not make this ‘A List’ would be left confused and wondering whether their work would have any relevance for Nigeria’s economic development. Could it be that this is just an opportunity for certain Ministers to have special and enhanced access to the President and Vice President.
“In Obasanjo’s era, he used the composition of the economic team to favor the privileged Ministers and officials, which was how the Minister of Abuja and the Head of EFCC made the list then. Now, Jonathan is showing his own favorites, which could be why the current Minister of Abuja and the current Head of EFCC lost their seats in the team.”
Speaking further, he said, “Alternatively, we may be witnessing a nasty consequence of the quota system, under which Ministers are to be selected from every state in Nigeria regardless of their individual merits.
“The President seems to have been forced to have two cabinets. The first cabinet is the one he was forced to create based on quota system. Let’s call that the shadow cabinet (sorry for the well-founded British concept). Then there is the real cabinet, comprised of people that the President believes are capable of performing.
“Similarly, Obasanjo’s economic team had El Rufai and Ribadu as members, while Jonathan’s does not have Farida Waziri in the Team. The President sets this group of Ministers aside as the real cabinet, but calls them the Team. He does not even wish to hide the fact that the Team would be working with him closely. Hence he heads this alternative cabinet directly.
“If this was the thinking of the President, why not just call the spade a spade. Or one must be forced to admit that the system cannot work without massive deception and gaming. The President should really return to the drawing table or simply explain to Nigerians what this is all about.”
Nigeria's inflation drops to 9.4% in the third quarter of 2011
A good and encouraging record trickled from National Bureau of Statistics that inflation rate receded to 9.4% in July, the lowest so far in three years. This is a significant improvement from persistent inflation that was surging upward that compelled the Central bank of Nigeria (CBN) to aggressively tighten monetary policy. As of June the inflation rate stood at 10.2% and this made the Sanusi's CBN to raise the interest rate to 8.75%. There is no doubt that the monetary policy of restraining and mopping up liquidity at the monetary base aided to slow down the rising inflation.
The governor of Central Bank of Nigeria, Sanusi Lamido has promised earlier to hold down inflation rate at less than 10%, but for a while it appears futile. Therefore the apex bank of the land, CBN gets into muscular mood by increasing the interest rate at numerous times to rein in the run away inflationary trends. Many observers of Nigerian economy and market including investors were little skeptical about the usage of the aggressive tightening of the monetary policy to achieved the targeted goal.
Financial writer at Thisday, Obinna chima observed that, "The CBN had always expressed disdain for double-digits inflation rate in the country. This has seen the apex bank’s Monetary Policy Committee (MPC), adjusting various monetary policy instruments to achieve that ambition. The MPC which has operational independence in setting of interest rates in the country had increased the benchmark interest rate – the Monetary Policy Rate (MPR) four times since this year. The benchmark interest was raised from 6.5 per cent in January to 7.5 per cent in March, 8 per cent in May and to 8.75 per cent at the July meeting. Other monetary policy tools such as Cash Reserve Requirements (CRR) had also been reviewed upward."
In reality the issue of taming inflation in Nigeria must go beyond monetary policy but should involves the presidency's fiscal policy to help in the struggle to control inflation. Central Bank of Nigeria should be probably elated with the recent development as inflation now stood below 10% but the struggle is not yet over. The increasing of interest rate to dry up the market excessive liquidity in order to achieve the desired goal of restraining inflation may have a reverse effect at some point. As the interest rate increases it will dampened economic growth by making the availability of credits and loans to tighten. The scenario may once again usher in credit crunch and the financial flow of liquidity in the capital market. This is not the result that CBN is trying to achieve, that it is why a comprehensive outlook is needed to continuous wrestle down inflationary trends.
The economy is cruising at 7.9 - 8 % and that is phenomenal by any standard. The growth must be jealously protected from the rising inflation that can quickly dent the economic growth and reverse the trend. The injections of surplus money into the circulation by the bailing out of the failed banks have in the past contributed to inflation. The continuous and excessive borrowing by Nigerian government by selling of the bonds must be done in way that too much money will not overheat the economy. Nothing is wrong with a country selling bonds and T-bills to investors but the raised funds must be diligently funneled into the economy by the way of investments.
Another methodogy that can be used to checkmate inflation is for Nigeria to live within its means. By this a planned budget must be sensible and it must be successfully implemented. When a government dabbles into excessive spending that will increase its current expenditure and in the long run have untold consequences. The ramifications may come in the retarding of the economic activities and the surging of inflation rate due to excessive liquidity in the market. When Nigeria lives within its means, there will be no need to aggressively raise the interest rate to combat inflation.
When the interest rate was raised to 8.75% at end of CBN's Monetary Policy Committee (MPC) session, it issued a statement that, "The Committee observed that the inflation outlook appears uncertain owing to the expected implementation of the new national minimum wage policy and the imminent deregulation of petroleum prices. Significant injection of liquidity from FAAC in the third quarter coupled with the impact of AMCON recapitalizing intervened banks to the tune of N1.6 trillion will both add to inflationary pressures." That is supposely the case but it is not the whole story; the excessive government spending and borrowing played a role to the state of inflation.
Investment in this case means to put money and resources on things that will enable the creation of wealth possible. Investments should go into the provision of infrastructures and social amenities that are needed by the citizens and capitalist for further creation of wealth and upliftment of the wellbeing of the society. The Nigerian government should do its best possible to provide electricity, good roads and security. The security in this case becomes imperative for the protection of life and property, which is the most important function of a given government.
But there are also coming attractions to the economy according Samir Gadio, an emerging markets strategist at Standard Bank Group Ltd that makes outlook on inflation “uncertain.” Those coming attractions include the doubling of "the monthly minimum wage to 18,000 naira ($116) and to deregulate fuel prices, central bank Governor Lamido Sanusi said last month. Core inflation, which excludes food, will probably accelerate in the second half of the year." These activities have the propensity to increase inflation.
Nigeria must look into the cutting down of importation of food commodities especially rice that can be grown in Nigeria. The less reliance on importation, less spending and less borrowing can bode well for a sound economic standing devoid of higher inflation.