Delta enters $20m oil palm production deal

The Delta Government has signed a $20 million Memorandum of Understanding (MoU) with Norsworthy Investment, a private firm, for the cultivation of 3,000 acres of oil palm and processing plant project.

The project which would be sited at Akwukwu-Igbo in Oshimili North Local Government Area of the state, was signed in Asaba on Thursday by the Secretary to the State Government, Mr Festus Agas.

Agas reiterated the commitment of the state government to provide the needed support for investment towards developing every sector of the state economy.

Omokore, Diezani’s ally has case to answer, says judge

Mr Jide Omokore, a business ally of former Petroleum minister, Diezani Alison-Madueke has his hope to quash a $1.6billion fraud charge against him dashed.

Justice Nnamdi Dimgba of the Federal High Court sitting in Maitama, Abuja on Thursday, struck out his application seeking to dismiss the charge preferred against him and others by the Economic and Financial Crimes Commission, EFCC.

The judge also refused the application seeking to strike out an additional proof of evidence dated June 7, 2017 tendered by the EFCC.

Should Pregnant Tanzanian School Girls be allowed in School?

Many Tanzanians have condemned President John Magufuli's comments that schoolgirls who give birth should not be allowed to return to school.

An online petition has been set up to get the president to reverse his comments.

Mr Magufuli warned schoolgirls at a rally on Monday that: "After getting pregnant, you are done."

A law passed in 2002 allows for expulsion of pregnant schoolgirls.

The law says the girls can be expelled and excluded from school for "offences against morality" and "wedlock".

Grenfell Tower Fire started from Fridge freezer

Grenfell Tower  Fire started from Fridge freezer

The Grenfell Tower fire in London started in a fridge freezer, and outside cladding failed safety tests, police say.

Insulation on the building also failed tests and the Metropolitan Police will consider manslaughter charges.

Seventy-nine people are feared dead after the blaze destroyed 151 homes in the Kensington tower block.

The government has ordered immediate testing of the Hotpoint fridge freezer which was involved.

OUR LEADERSHIP CONUNDRUM

The leadership deficit in our country today is a great cause for concern. It is the prime cause for all other deficiencies; structural, infrastructural, power, education, and many others too numerous to count. From the pulpits in our churches and the Minbar in the mosques, at seminars and other fora where the problems of this country are being discussed, the issue of leadership usually fronts the bill. Our readers have therefore become agitated and are asking the pertinent question: Are leaders born or made? In view of the failure of leadership in our country, one is not surprised. This, however, is the most basic and most often-asked question about leadership. The job of leading an organization, a military unit, or a nation, and doing so effectively, is indeed very complex. To expect that a person would be born with all of the tools needed to lead, is a very tall order.

Yet, there are some "raw materials; some inborn characteristics, that predispose people to be and become leaders. What are some of these inborn qualities? Extraversion has been associated with leadership positions and leader effectiveness. There is also evidence that boldness, assertiveness, or risk-taking or sometimes daringness can be advantageous for leaders. Leaders also need to be smart to analyze situations and figure out courses of action: All these are not taught in leadership training camps or ‘man o war’. They are ingrain in individual make-up. Even among business persons, they are traits that are not taught in Harvard Business School. You either have them or you don’t. It is these peculiar traits that separate effective leaders from run of the mill ones. To this extent therefore, we could conjecture that most of the traits that make a good leader are ingrain. For example, intelligence is associated with leadership, but perhaps not general IQ, but social intelligence - understanding of social and political situations and processes; is the component of intelligence that is important for leadership. Finally, some sort of empathy, or ability to know followers, is also advantageous for leaders. The leader must be able to know what followers want, when they want it, and what prevents them from getting what they want. All of the above traits are innate and are not learnt and tend to support the fact that most leadership traits and qualities have to do with the makeup of the man, rather than internalized. Leadership, therefore, being the ability to exercise influence over others for the leader's purposes, aims or goals, is largely made up of inherited qualities and traits that make men better suited to lead. This leads to the conclusion that most leaders are born. This is supported by what has become known as ‘Great Man’ theory and other ‘Trait’ theories. To suggest that leaders do not enter the world with extraordinary endowment is to imply that people enter the world with equal abilities, with equal talents, said Thomas Carlyle.

There is a significant difference between “learning a skill” and mastering one, in the same way that others are born with amazing musical gifts or athletic talents. They will excel naturally in these areas but others would not.

Born leaders are different from made or artificial leaders. All remarkable leaders have great history behind them. They were leaders from the onset of their journey. Some observers have opined that birth is a natural process and the notion to associate leadership with it is arguable. This is true to a large extent. Hence, they argue that leaders are made not born.

Behavioral Theories believe that people can become leaders through the process of teaching, learning and observation. True, leadership is a set of skills that can be learned by training, perception, practice and experience over time. Leadership learning is a lifetime activity. Good leaders seek out development opportunities that will help them learn new skills. This is true of the military, para-military and so on, or managerial positions in corporate organizations. However, no matter the amount of training, some military and managerial personnel will stand out above the rest and in situation that calls for leadership, they will be in front. History is replete with such leaders, such as Patton, Montgomery, Laurence of Arabia and Julius Caesar. 

Can enrolling for a programme on management and leadership makes someone a leader upon completion? Can charisma, influence, integrity and the ability to inspire be taught? Will the granting of a certificate and a few degrees after one’s name make them a leader? These are questions that are begging for answers. Soft skills can be explained, but not implanted. The ability to share your vision takes more than a sophisticated PowerPoint presentation.

Leadership can be learned by anyone with the basics. But an awful lot of leadership cannot be taught. Some do well but others find themselves poorly equipped rendering mediocre results. This much is our bane in this country where we have social deviants, delinquents and miscreants parading as political leaders. People of doubtful and questionable pedigree and foundation. Even when they are learned and schooled, they still lark most of the qualities and traits of good and able leaders. They are people who have imbibed deviant cultures and products of sociological mutations: And like all mutants are never advantageous to the specie: Area boys, cheats, liars, kleptomaniacs and those Awolowo dubbed ‘lost souls’. Yet, there is no iota of doubt that this country of over 180 Million people is blessed with men and women of sound and impeachable characters who have exhibited exemplary leadership in politics and the economy, military and religion. Where are they that we are saddled with charlatans and masquerades?  

Leadership is therefore, an art rather than a science. It is a set of innate traits, refined and perfected over time with education, training and experience.

There is also an aspect of being in the right place at the right time; which could be call opportunity. You may be a leader but also a matter of whether or not you are in the position within which your talents can shine forth.

The discussion about leadership also needs to identify the location as well as the environment. Not everyone can be a leader just like not everyone can become a good actor. Some people will never have that aspect in them while others have the latent ability and thus can be taught how to lead. All the books, classes, education and training cannot turn a follower into a leader.

To be a leader in a structured environment, one needs some formal training. Most people can learn to manage well, start a business, lead a project team since good management is based on rules - rules that can be learned and mastered. But, we should remember that Leadership is often a choice. A leader is a person who comes forward to take the challenge. If a leader rises up from the multitude, then that person was already a leader to begin with. Should someone have all the best training, nurturing and opportunities, but would rather be hidden in the crowd, an unwilling participant...not a leader.

Leadership styles varies with maturity, followers and situations.

Leadership attributes will include, among others: “Integrity; charisma, inspiration, vision, encouraging, positive, confidence builder, dynamism, foresight, effective team building, communicating, coordinating, decisive, intelligent, and win-win problem solver.” These attributes are a combination of personality, character, skill, communicative ability, and emotional intelligence. Therefore, a leader is born, developed, skilled in communications, and cultivated through life experiences.

Remarkable Leaders would include the likes of Nelson Mandela, Mahatma Ghandi, Martin Luther King Jr, and Aung San Suu Kyi…etc: Individuals that seek neither wealth nor fame, selfless, loved justice, passionate about people and worked for the greater good of others. Here in this clime we have an acute shortage of such men.

In times like these, may Allah give us men that would rise to the occasion and lead us to the Promised Land; Amen.

Barka Juma’at, Ramadan Kareem and Happy Eid. 

Babatunde Jose
+2348033110822

National Security in Post Military Nigeria

                              By Bayo Ogunmupe

    National Security, Democracy and Good Governance in post military rule Nigeria is the title of Dr Dan Mou's latest book. It is in two volumes; this is volume one. It belongs to the genre of Mou's tracts on Nigerian politics and society after military rule. First published by Author House in December 2016; the book is massive in volume, printed on glossy paper-back. The book highlights that Nigerian security, economy, political and social problems have been intractable since the civil war. It says Nigeria's challenging security, democratic and governance problems would get better depending on what happens to the 71 percent of the population still living below poverty line.

    This is so, despite the billions of dollars realized from crude oil over the past half a century. This volume reveals that one does not have to be a prophet to predict that without good governance, team work and inclusive growth, Nigeria may witness civil disobedience, insurgency, kidnapping  and the breakdown of law and order. Besides, more of her citizens will check out of the country to become migrants. Sadly, Dr Mou's predictions have come true as thousands of Nigerians perished trying to cross to Europe through the Mediterranean.

    However, under such intense pressures, for self preservation, the Nigerian government will be forced by objective conditions to move against groups and classes in the country. Just as it is happening now, as President Muhammadu Buhari is exposing corruption such as the Ikoyigate and the like. Those who have long captured and hijacked the Nigerian state and its resources for their exclusive use are now being exposed.

    National security's first volume has 14 chapters, three parts, 16 appendices and 856 pages. This book shows that Nigeria's social classes which were hitherto very docile, are now very active, even nearly becoming militant. They are now demanding the dividends of democracy. These new militants countrywide have long eluded the 71 percent of Nigeria's population now languishing below poverty line. According to the National Bureau of Statistics, in spite of the billions of petrol dollars Nigeria has garnered as revenue over the years, the majority of the people are still so poor that Nigeria is the worst country for a child to be born in as at 2016.

    This book warns that the demands of the down trodden such as poverty alleviation, inclusive growth and equality before the law, if not met, will culminate in social fragmentation in the years to come. Thus, Mou is looking like a prophet as militancy grows by the day organized by the Oodu Peoples Congress, the Movement for the Actualization of the Sovereign State of Biafra and the Indigenous People of Biafra. Indeed, Mou continues in his testament that within the Nigerian reality, the federal government will be forced to move against the corrupt elite which has ruined the country to the detriment of the Nigerian people. It is only after political, social and ideological reforms have taken place that national security, democracy and true federalism will become internalized by the Nigerian people.

    It is after this projected social transformation that Nigeria would have started on the road to actualizing its destiny's role due to its size and prosperity as the authentic African giant. And we're living witnesses to the collapse of despotism around the world. This has aggravated agitation  for political participation of the youth and the poor.  Just before the publication of this book, participation revolution has engulfed  Nigeria. However, Mou  has addressed here, the form this revolution has assumed within Nigeria. Particularly limited is our knowledge of how and why these agitations  and the demands for autonomy have come to affect our  national security.

    Indeed, this widespread dissatisfaction is bringing about great challenges  to the government. But it is noteworthy that the army voluntarily relinquished power to civilians. They did not wait till we had our own Arab Spring before doing so. More so Mou is able to resolve some mistaken views of Nigerian politics. The first mistaken view is that national security  cannot thrive in a democracy, that is to say only the military can guarantee security. Secondly, that our economic conditions affect national security. Here, Mou asserts that a democratic environment is a conducive place to pursue the goals of national security and good governance. Finally, poor security arose due to weak political institutions and poor leadership. Actually, leadership determines the quality of our national security,democracy and good governance.

    Severe economic conditions such as depression generate cleavages and class based conflicts which undermine security. Each group attempts to capture state power to favour their exclusive  interests. As the prosperity of a nation shrinks, these cleavages increase and the struggle becomes more intense. Corruption also exacerbates instability as public servants engage in primitive accumulation of capital for their private benefit.

    It is such failings that have culminated in Boko Haram insurgency and militancy in the Niger Delta. Mou reveals that in Nigeria good governance means social welfare, consequently,not only corruption is ravaging the country, disparity in income is also subversive of national security. Unfortunately, Nigerians have come to realize the fallacy of prosperity trickling down that will cushion  their suffering. What is more the state managers are restrained by the thieving elite from taking drastic measures  that will provide succour for the people.

      To that end budget surpluses were venerated. It was used to slow down economic development. This practice of hoarding money slowed down industrial growth  and our growth has been declining since 1993. The author, Dr Mou is currently the chair of Centre for Poverty Eradication in Abuja, Nigeria. A graduate of political science of the University of Ibadan, he obtained his PhD from the University of Wisconsin, Madison, USA, retired from public service as Adviser to National Security Advisers of three different administrations in Nigeria. He has written seven books on public policy analysis.

Laws that will transform your life

                          By Bayo Ogunmupe

    Our lives can be seen as a box; when we do good, we fill the box with good things and vice versa, when we do something bad, we fill it with bad things. Throughout our lives, we randomly pull something out of that box. The more good things you do, the more likely that you will pull something good out of the box. Most of the choices are not conscious choices, everything is left to chance. This means that doing good deeds will not always  be rewarded; and doing bad deeds will not always be punished.

    There is something much more significant and important. That important thing is how you choose to live your whole life. Really, if you want something to happen in your life, you should actively act to achieve it. This is something you forget at some stages in your life. You cannot always hope that things will just happen as you want, without necessary effort. You should never rely on things happening spontaneously without propelling them with action. You should always control yourself.

    Indeed, it is yourself you can only control. You cannot control what others do. But you bear full responsibility for your own actions. Your life is your own creation. You decide which direction to take while you are the sole controller of your destiny. Failure will continue to persist in your life until the lesson is learned. One of the rules of karma is that until the lesson is learned, we will continue to make the same mistakes. The story will continue to repeat until you learn something. This is true for both nations and individuals.

    The successes that happen to us have value only when we have worked to achieve them. The true value of things does not come from how much we have spent on them; but of how assiduously we worked to get them. The biggest personal victories are those that are beneficial to everyone. If you get rich, it is good for you, but you are just an individual. The greatest victories are those that benefit the whole community. Dedication to the good of a nation brings positive karmic influences which in turn provides a tremendous popular support.

    And the most important universal law of abundance is being happy all the time. The energy of happiness is very powerful and does erase bad karma. Bad karma can be cleaned through making others happy. Meditation, visualization and chakra cleaning can also erase bad karma. To be happy, invest time, energy and money into yourself everyday. Happiness comes as a side effect of learning new skills, challenging yourself and helping others. Adapt and stretch yourself to accommodate new ideas and new information.

    When you invest in yourself, you develop higher levels of creativity and you can never lose the battle for prominence. And over time you will change the trajectory of your life, since you are the product of what you know. The more time, energy and money you invest acquiring pertinent knowledge,  the more control you have over your life. The one lie you learned when you were young is still holding you back. Starting all over again isn't an option. That is the great lie that is hindering your progress.  

    The idea that starting all over as being bad is baked right into our educational system. We send children to universities at 18; telling them to choose careers that  they will be happy with for the next 40 years. But what if you choose wrong? And that is what often happens. Over time through bouts of failure and hardship, you learn the truth through experience. Then you change to new career paths. The truth is that no one wins in a game of chess by only moving forward. Sometimes, you have to move backwards to put yourself in a position to win. This is a perfect metaphor for life. Often, you feel running into a dead end. That is actually a sign you are not on the right path. Gradually, life teaches us U turns are allowed. So, turn around when you must.

Health habits of happy people

                              By Bayo Ogunmupe

    There are many ways to heighten your happiness. Actually, health is wealth. It is important to take care of your health. Good health creates happiness. No matter what, your health should be your first priority. Sadly, the moment it comes to taking care of ourselves, we procrastinate. Do you know that those tired, sunken eyes might not be due to lack of sleep or overwork? It could be prolonged dehydration. Those unexpected bolts of pain on your leg and back could be as a result of calcium deficiency.

    That giddy feeling and persistent headache could be low levels of haemoglobin. Put simply, you may look healthy from outside, but sickness often starts from inside. We should always keep in mind that sound health starts from within. Ignoring a problem only aggravate it and leading to further complications. So, whenever you feel changes within you, seek for help to restore your health without delay. Remember a law of medicine, prevention is better than cure.

    The steps you take to maintain your good health, definitely act as good and effective mechanism against most illnesses. They also contribute to your gaining a long and healthy life. Therefore, the best thing you can do for your happiness is to take care of yourself and your personal health. No matter how busy you are, find time to take care of your health. Regular checkups and tweaks in your diet and lifestyle will help you more than you ever think.

    What are the real health challenges you can face? If there is none, glory be to God. But if there is, tell a doctor or pharmacist without any further delay. Thereafter, savour the joy of simple pleasures. The best things in life are free. They are governed by Mother nature and appear right in front of you at various locations and times. Holding hands with someone you love, taking part in such moments frequently bring unpredictable bursts of happiness.into your life.

    Look for health and happiness in the right places. When we were young we looked for happiness in drugs, sex and alcohol, parties, fast cars and extreme sports. When we got older, we looked for happiness in more mature ways- a stable life partner; romantic getaways- walks along the beach; jazz music, the cinema and a night at the bar with friends. Surely some of these things make us happy and sane. They raise our health and happiness temporarily.

    Since humans have a baseline of happiness, certain events heighten our outlook: like an unexpected windfall. But the answer is for us to raise our happiness level, enjoying the moment but never ignoring our long term goals. What will you be proud to have accomplished or failed to gain, five years from now? To deepen your happiness, perform random acts of kindness on a regular basis. Pay a stranger's bus fare. Buy your office girl flowers, just to say thank you. Help an elderly with her groceries.

    Nothing is more rewarding than putting smiles on the faces of your neighbours. Always help others whenever you are able, you get what you give. When you make a positive impact on the life of others, you are making a positive impact on your own life as well. Share time with people you care about. The quality of your personal relationships correlates directly with your overall sense of worth and happiness. In the midst of life's chaos, we forget to do the little things that remind us we're part of something greater than ourselves.

    We need a certain amount of contact with others to feel fully human and alive. You need only a certain number of friends to be happy. You don't need many friends. Accept things when they are less than perfect. When in a fix during decision making, make an educated guess on the next logical step. Your failures along the road to your goals are opportunities to learn and grow. The world does not reward perfectionists, it rewards those who get things done. Which is why you should invest time, money and energy on yourself everyday. Happiness is a side-effect of learning new skills and bettering yourself.

Devaluation as disincentive to economic growth

By Bayo Ogunmupe

RECENTLY, the Central bank of Nigeria (CBN) devalued our currency, the naira from N155 to N184 to the United States dollar. This measure will certainly hurt the Nigerian economy. The announcement came a few days after the federal government announced the introduction of austerity measures following the sharp fall in the price of oil in the world market. In response to the devaluation, inflation is galloping with petroleum scarcity ravaging parts of western Nigeria.

  According to the CBN, devaluation was arrived at in order to curb negative speculation with the naira, particularly by the banks which have been putting great pressure on our legal tender. The devaluation which is plummeting by the day is now about 10 per cent. The step was rendered inevitable by excess liquidity in the banks. In doing this the CBN hopes to tighten the monetary policy framework by allowing some flexibility in exchange rates.

  Devaluation will also stop speculative practices, stop the evaporation of the naira. While we cannot influence the increase in the price of oil, these CBN measures have been adopted without evaluating the impact on the Nigerian economy. Indeed, the net impact of a weak naira is an unsustenable spiral of inflation raising the costs of petroleum products. Sadly, the improper management of the economy and fiscal indiscipline over the years are responsible for the present anxiety. This is all the more so, as oil price had remained far above the budget benchmark for decades, peaking at about $120 per barrel earlier this year.

  Earlier, the volatility of oil prices was long in evidence, but the Federal Government ignored the signals. Thus, the government should be blamed for lack of creative problem solving in not diversifying from our monocultural economy. Ordinarily, devaluation of the naira would not have been a problem if we had plenty of goods to export and little to import, since devaluation benefits exporters.

  Now we are worse of as we shall need more naira to buy goods sold in dollars. Unfortunately, Nigeria cannot manufacture much owing to a combination of factors among which are high cost of production, high interest rates and an unstable power supply, have hampered local industries. Interestingly, the finance minister opined that the interest of the common man is a priority in Federal Government’s strategy for salvaging Nigeria’s economy. We urge the government to clearly demonstrate this through clearly defined programmes and policies that would cushion the people from the effects of devaluation of the naira. Perhaps devaluation and the ensuing austerity measures would have been a blessing in disguise if it would force government to develop other revenue sources, establish fiscal discipline, cut cost of governance and establish an interest free, collateral free and discrimination free bank product to develop the country.

  The second disincentive to economic growth is the abdication of leadership by this we mean that the people in power have refused to enforce and enthrone regulations, which can ensure economic growth. The overbearing attitude of our regulators which culminates in poor attitude to work and abdication of authority and refusal to apprehend regulation violators.

  Besides, most of the policies churned out by the regulatory bodies in Nigeria have over the years effectively succeeded in stifling or restricting and hindering innovation and investment. This has led to a situation where the bureaucracy dictates the pace of the growth of the economy. Another worrying issue is double taxation whereby entrepreneurs are being squeezed by multiple taxes, levies, red tap as states seek to shore up their internally generated revenues. Which is why the World Bank observed that Nigerian businesses spend valuable time and resources trying to comply with a myriad of local regulations.

  As World Bank said further that removing those burdensome regulations is an essential step towards a stronger private sector of the Nigerian economy. After sampling the opinions of world renowned economists, we have come to the conclusion that the key to unveiling the troubles of the Nigerian economy is to be found in recognizing that the rebased economy has highlighted the absence of structures in our economic policy making. This means that there should be an immediate transformation from primary to domesticated value added production.

  Although reports suggest that countries like Thailand, and Malaysia have experienced similar growth in the services sector, but that this in itself does not justify the composition of our Gross Domestic Product (GDP) that our rebased economy just revealed. However, world economies are measured by the strength of their industrial capabilities, which give verve to the service sector. If the service sector has revealed an uninspiring contribution of a mere seven per cent, it means that retail trade is driven by imports. This implies that the services sector put a lot of pressure on the exchange rate of the naira.

  However, all over the world, economies are measured by the strength of their industries, which gives verve to the services sector. In Nigeria, the services sector is dominated by wholesale and retail trade. If our manufactures contribute seven per cent to the GDP, it means our retail trade is driven by imports. This puts a lot of pressure on the foreign exchange rates. Given that our earnings from oil are plummeting, the demand for foreign exchange to sustain our imports can only come from running down our external reserves.

  Thus, the federal government should recognize the danger so posed and diversify quickly to forestall an outright collapse of the naira. In this regard FG has to plug distribution loopholes in its Agricultural Transformation Action Plan. It is noteworthy that both manufacturing and agriculture output have remained stagnant. The urgent step required is a collaboration for increased productivity between the federal ministries of Agriculture and Industries, particularly in areas of private sector investment.

  Indeed, the best ways to strengthen the value of the naira are one, expand the volume of non-oil exports and services and two, enhance domestic competitiveness that will reduce the demand for imported goods and services: because a pound saved is a pound earned. Howbeit, we have to expand our manufacturing sector because as long as our industries remain stagnant, for that long would unemployment remain a threat to economic development in our fatherland.

Enemies of the Nigerian Economy

By Bayo Ogunmupe

            When the Islamic Development Bank rated Nigeria the third fastest growing economy in the world last April, it elicited widespread interest and approval.  This classification was based on Nigeria’s GDP figure of US$64 billion.

            According to the report, with a growth rate of seven per cent in 2011, Nigeria stands behind Mongolia with 14 per cent growth and China with eight per cent rate of growth.  Indeed, with elation, Nigerian government officials were quick to tell the nation that we have graduated from a low income country to a medium income one because of the improved per capita income which according to the Federal Ministry of Planning, has increased from $1,200 to $1,400.

            As it was to be expected, this generated divergent opinions, ranging from repudiation and excited acceptance.  However, economists insist that the classification is misleading and capable of goading members of the federal executive council and the National Assembly into self delusion since the reality everywhere does not support the false statistics being bandied about.

            Meanwhile, we export only oil, both in crude form and sometimes, refined quantities as well.  But in spite of the huge sums of money realized from oil, how do we explain our budget which is always in deficit?  Indeed, economists explain economic growth to mean the capacity of an economy to supply increasingly diverse goods to its population based on advanced technology with necessary institutional and ideological adjustments.

            There are three dimensions to growth.  One, the gradual and consistent rise in output over time.  The measure of output is the Gross Domestic Product (GDP), which is the aggregate of an economy’s annual value of output of goods and services within a given period of time, usually a year.

            Two, the availability of relevant technology and infrastructure as conducive factors of growth.  The quantity and quality of technology in a country determines the power of the economy to produce and supply goods and services to the people, otherwise the economy like ours, will be import dependent.  However, import driven growth usually dislocates other fundamentals such as the purchasing power of the currency.

            Indeed, the most critical of the dimensions of growth is the nature, quality and power of the institutions driving growth.

            Thus, no meaningful growth will occur in an economy if fiscal institutions are weak.  Available data show that Nigerian output has been on a gradual rise now, particularly since the ascent of Lamido Sanusi as the Central Bank governor.  Despite obvious challenges, economists aver that the GDP revision will see Nigeria where Argentina was when she joined G20.  It isn’t surprising therefore that our policymakers are positive that by 2020, Nigeria would join the league of 20 most advanced economies.  Thus, all things being equal, we are on the right course to prosperity.

            But can we say that the Nigerian economy is growing.  The GDP rate of growth is often touted as an indicator of the general health of the economy.

            A consistent rise in the rate of growth of GDP shows that an economy is buoyant.  This, will be reflected by an increase in employment, a rise in the purchasing power of the people and a higher standard of living, since such conditions don’t operate in Nigeria, it means the economy isn’t growing.  When an economy isn’t growing, it will be declining, in other words, a decreasing rate of growth leads to rise in unemployment, as witnessed in Nigeria since the advent of the meltdown of 2008.  Thus, the economic condition in Nigeria is moving opposite of positive growth.  As a result, Nigeria is declining economically in spite of our huge revenues from oil.  This decline in our well being is attributable to the activities of the enemies of the Nigerian economy.

            First of such activities is the failure by government officials to produce regular electrical power to service the economy.  This failure has been deliberate, and is being done for personal gain either for money or such that a generator supply company may continue to operate.  Such other enemies of the nation are those who want to curb the autonomy of the Central Bank of Nigeria (CBN).  In any event, the present CBN model that price stability is its main objective, is based on a huge body of empirical evidence regarding the positive impact of central banking independence on economic performance, especially in achieving lower inflation rates.  Central Bank autonomy also boosts fiscal discipline without any additional costs or sacrifices in terms of output or reduced growth.  The shift towards central banking independence has become the norm since the banking crisis of 2008, and we should follow suit or fail.

            Indeed, experience has shown that nations with independent central banks attract more investment because indices such as GDP, exchange and interest rates tend to be stable thereby enabling investors to make long term investment commitments.  Thus, it is no accident that the period when Nigeria achieved a superior economic growth coincided with when the CBN became more independent of political maneuvering. Thus, those seeking to alter the CBN charter are part of the enemies of the economy.   Lamido Sanusi isn’t going to be CBN governor for ever. Don’t change the CBN Act because of jealousy.  What we need is a law regulating donations.  Because we know they want to destroy CBN because it donated N100 million to the victims of the Kano bomb blasts. We share the feeling that the manner governors, ministers and the presidency is doling out money to the public is wasteful and unacceptable.

            Finally, many of the flawed growth patterns in our economy involve fiscal distress, contrary to the prevailing wisdom of today, some degree of Keynesian demand management in this transition to a sustainable growth pattern isn’t in conflict with restoring balance to the economy.

            Thus, the real enemies of the economy are those who stoke unrest by refusing to employ enough policemen for Nigeria.  Being about 168 million in population Nigeria needs 1.68m policemen. 

            Unfortunately, we can only boast of377,000 cops, a number which is less than one third of our needs.  Any wonder Boko Haram has unleashed terror on the country three years on?  Perhaps, the only way to stop the enemies of the country is to change the personnel of government every four years.  This can be achieved by changing the ruling parties in each state and the federation every four years.  Stability is critical to the economy because terror scares away investors from the country.       

              

How to execute the growth plan

                      By Bayo Ogunmupe

    Early this month, President Muhammadu Buhari launched the Economic Recovery and Growth Plan(ERGP). The Plan is to restore the Nigerian economy from recession to growth by 2020. The ERGP is to reduce inflation from 19 percent to seven percent. Two, it is to restore the growth of the Gross Domestic Product (GDP) through agriculture. Three, ERGP is established to boost power, the energy mix and renewable energy. Four, it is to make Nigeria become an exporter of petroleum products by 2020. Finally, it is to boost the anti corruption and national security efforts.

    In the aftermath of the failure of previous administrations to fulfill their economic promises such as house for all in the year 2000; visions 2010 and 2020 and others, it looks pedestrian for Buhari to launch another short-term National Poverty Alleviation Programme. Since ERGP isn't captured in the 2017 budget, it is assumed the Federal Government (FG) will borrow to execute it. However, we believe it is unwise to borrow money either internally or from abroad to finance ERGP. Though this plan aims at lifting the economy from the doldrums, the quality and value of spending has to be better than those of previous administrations.

    Indeed, the expansion of the economy which ERGP connotes, must have a limited lifespan otherwise it will crowd out lending to the real sector comprising infrastructure, employment and a new electrical power structure. The data released for the end of 2016 by the Debt Management Office (DMO) shows that the debt burden has soared from N354 billion in 2010 to N1.23 trillion in 2015. Domestic expenditure accounts for more than 90 percent of the total debt service because government's obligations are predominantly loans obtained from multilateral and bilateral agencies which are cheaper than its domestic borrowing.

    The debt office's medium term debt strategy seeks a 60 to 40 split between domestic and external borrowing, compared with 76 to 24 blend at the end of 2016. However, the Eurobond of February 2017 was a great success because it revealed Nigeria's healthy external trade balance sheet. Total debt service in 2016 reached 35.4 percent of FG revenue. This ratio is particularly alarming because revenue collection in Nigeria have been very poor. The plummeting oil price since 2014 highlighted the derisory level of non-oil tax collection.

    The ERGP will force up the total debt service ratio further to 38.1 percent by 2018 before easing out to 34.5 percent by the end of the plan period of 2020. The foregoing shifts deficit financing from 54 percent in domestic matters to 66 percent by 2018. By 2020 our external debt will amount to 72 percent deficit. In the circumstance, DMO will need to procure a deficit of N1.25 trillion in the 2017 budget- through raising funds from its monthly auction of bonds. That was started by Buhari through raising N535 billion from auctions in february 2017.

    There is need for caution however, for sourcing for money via bonds will lesson a rigorous management of public finance. The ratio for the public rather than the sovereign debt stock would be about 25 percent after making allowances for domestic borrowings of states; AMCON bonds and takings from NNPC. The FG debt of N2.2 trillion unearthed last December adds to the impropriety of borrowing to fund ERGP.

      For the last leg of the ERGP mandate, to boost the anti corruption war and national security. This administration has too narrow a definition of corruption. Theirs is only to catch a thief. They are doing nothing on cleaning the stable and building institutions that will stand the test of time.  Sadly, our culture has become corrupt. This means to curb the malaise, our economic team must contain disparate disciplines. Like in the USA, the Council of Economic Advisers which overlooks the economy is staffed by about 30 people, 21 of which are professional economists, statisticians and demographers.

    When you catch thieves that you cannot jail, it means the lawyers, the prosecutors and the judges  are corrupt. How then do you hope to beat corruption? It means to win this war government must evolve a strategy. One way is to install expenditure tracking, a mechanism which must include tracking government foreign transactions, even including the presidential medical vacation abroad. This economy isn't as buoyant as it is made out to be. Corruption funded companies are folding up and laying people off. Unemployment is exacerbated by tertiary institutions graduating students which cannot get jobs.

    Indeed, the economy will only be better when the north drops its opposition to the Host  and Impacted Community Dividends clause in the Petroleum Industry Bill. This gives members of the host community a stake in the wells in their communities. Such recognition of the host community guarantees zero vandalism for the simple reason that one does not vandalize one's own property. Northerners opposition to the passage of PIB amounts to making Nigeria poorer in order to stop your neighbour from getting richer.

    Finally, to make ERGP work, both the FG and the states must appoint boards to monitor, manage and execute its strategies. Also, the budget minister must ask for a separate budget for the plan. Better still, Parliament should create the Council of Economic Advisers to supervise the economy to enable nigeria overcome her economic backwardness. Fortunately, the International Monetary Fund came calling weeks ago urging Nigeria to take urgent steps to revamp our economy. It advised that priority be given refurbishing infrastructure, enhance the business environment; improve access to financing small and medium enterprises and strengthen the anti corruption war.

    Also, the Fund specifically recommended  that FG increase value added tax, excise duties and the removal of oil subsidy and the harmonization of our many exchange rates. Furthermore, a CBN release shows FG had a deficit of N3.2 trillion carry over from 2016. This huge domestic debt makes it necessary for us to fix the debt burden through the enthronement of a proper team of economists. Thus, FG and state governments should stop domestic borrowing for it crowds out SME lending. We should cultivate greater self reliance if we are to improve our economic fortunes.

Nigerian Federalist

Nigerian Federalist will publish alternative news which is the real news which is the real news not reported by the mainstream media.