It is no longer news that Nigeria is currently in an economic dilemma. So much has been written and discussed, yet, the person on the street still wonders what the problems, and more importantly, the solutions are. This post provides a simplified summary of the economic issues affecting Nigeria, and offers some near and long term solutions to improve the state of the economy.
Obviously, Nigeria needs to increase foreign exchange revenue to be able to sustain her economy and reverse these early signs of a declining trade surplus. How can we grow forex earnings though?
Diversify our export base and focus on other locally produced, non-oil items.
Focus on agro-products like cocoa where Nigeria already has some leverage. The International Cocoa Organization estimated that Africa will lead global cocoa exports in 2015, with Nigeria being 4th largest producer in Africa, 9th in the World (2015 estimates). More so, in April 2012, at the Conservation Alliance, agriculture experts predicted Nigeria will be the largest global producer of cocoa within 10 years. Wishful thinking? Or worth government policy focus backed by private sector funding? According to the NBS’ Foreign Trade Statistics Report, apart from oil and gas, cocoa was Nigeria’s highest foreign exchange earner in Q3 2015. Some State Governors (Abia, Adamawa, Akwa Ibom, Cross River, Delta, Edo, Ekiti, Kogi, Kwara, Ogun, Ondo, Osun, Oyo and Taraba) need to evolve action plans to achieve quick wins here and spend less time engaging in boisterous political tirades in the media.
Other items that earned Nigeria significant foreign exchange in Q3 2015 are rubber, cigarettes, aluminum alloys and leather.
According to the Rubber Research Institute of Nigeria, rubber is produced in Abia, Akwa Ibom, Anambra, Bayelsa, Cross River, Delta, Edo. Rivers, Ondo, Ogun, Taraba, Oyo, Ebonyi, Enugu, Osun, Ekiti, and Kaduna. What are these States doing to increase capacity?
Growing capacity in these areas will not only diversify our export base in the medium term, it will also increase employment in the agriculture and manufacturing sectors. Government policies must lean in this direction, to attract and encourage private sector funding. States Governors should evolve action plans to achieve quick wins and spend less time engaging in boisterous political tirades in the media.
The other significant option is glaring. Develop an action to stop importing PMS. What have we spent the bulk of our foreign exchange revenue on? PMS imports. Grow in-country capacity to refine crude into petroleum products and watch the dollar burden on imports drop significantly.
Our 4 refineries have continued to perform subpar in spite of repeated turnaround efforts. Capacity utilization in 2015 was dismal.
These refineries need to be commercialized and then privatized to restore business efficiency. While this is in process, an emergency cause needs to be invoked to fast-track the construction new refineries to support local demand for PMS (realistically about 25 million liters per day, excluding border smuggling) and export to neighboring countries. Licenses were granted in 2015 for the construction of 65 modular refineries. What is the progress status on these? Dead on arrival? The current management of the NNPC has done an admirable job in promoting and actualizing PMS price modulation in spite of the President’s leanings. This already encourages private refineries to build, produce and sell profitably. Oh but guess what? They will require substantial forex to support fast-tracked construction. The refinery modules will be imported!
These options will however require time to actualize and may not be any immediate benefits. What is most critical is the assurance that our leaders are crystal clear on the issues and publicly committed (in word and deed) on a dogged resolution plan…. Grow Nigeria, Save Nigeria!
October 1st is a day for joy and celebrations for us Nigerians, whatever the circumstances we find ourselves in because it is the day, 55 years ago; we liberated ourselves from the shackles of colonialism and began our long march to nationhood and to greatness.
No temporary problems or passing challenges should stop us from honouring this day. Let us remind ourselves of the gifts God has given us. Our Creator has bequeathed to us Numbers – Nigeria is the ninth most populated country on the planet. We have in addition arable land; water; forests; oil and gas; coastline; and solid minerals
We have all the attributes of a great nation. We are not there yet because the one commodity we have been unable to exploit to the fullest is unity of purpose. This would have enabled us to achieve not only more orderly political evolution and integration but also continuity and economic progress.
Countries far less endowed have made greater economic progress by greater coherence and unity of purpose.
Nonetheless, that we have remained together is an achievement we should all appreciate and try to consolidate. We have witnessed this year a change in our democratic development.
The fact that an opposition party replaced an entrenched government in a free and fair election is indicative of the deeper roots of our democratic system. Whatever one’s views are, Nigerians must thank former President Jonathan for not digging-in in the face of defeat and thereby saving the country untold consequences.
As I said in my inaugural speech, I bear no ill will against anyone on past events. Nobody should fear anything from me. We are not after anyone. People should only fear the consequences of their actions. I hereby invite everyone, whatever his or her political view to join me in working for the nation.
My countrymen and women, every new government inherits problems. Ours was no different. But what Nigerians want are solutions, quick solutions not a recitation of problems inherited.
Accordingly, after consultations with the Vice President, senior party leaders and other senior stakeholders, I quickly got down to work on the immediate, medium-term and long-term problems which we must solve if we are to maintain the confidence which Nigerians so generously bestowed on us in the March elections and since then.
As you know, I toured the neighbouring countries, marshalled a coalition of armed forces of the five nations to confront and defeat Boko Haram. I met also the G-7 leaders and other friendly presidents in an effort to build an international coalition against Boko Haram.
Our gallant armed forces under new leadership have taken the battle to the insurgents, and severely weakened their logistical and infrastructural capabilities. Boko Haram are being scattered and are on the run.
That they are resorting to shameless attacks on soft targets such as I.D.P. camps is indicative of their cowardice and desperation. I have instructed security and local authorities to tighten vigilance in vulnerable places.
On power, government officials have held a series of long sessions over several weeks about the best way to improve the nation’s power supply in the safest and most cost-effective way.
In the meantime, improvement in the power supply is moderately encouraging. By the same token, supply of petrol and kerosene to the public has improved throughout the country. All the early signs are that within months the whole country would begin to feel a change for the better.
Preliminary steps have been taken to sanitize NNPC and improve its operations so that the inefficiency and corruption could be reduced to a minimum.
Those of our refineries which can be serviced and brought back into partial production would be enabled to resume operations so that the whole sordid business of exporting crude and importing finished products in dubious transactions could be stopped.
In addition to NNPC, I have ordered a complete audit of our other revenue generating agencies mainly CBN, FIRS, Customs, NCC, for better service delivery to the nation. Prudent house-keeping is needed now more than ever in view of the sharp decline in world market oil prices. It is a challenge we have to face squarely. But what counts is not so much what accrues but how we manage our resources.
We have seen in the last few years how huge resources were mismanaged, squandered and wasted. The new APC government is embarking on a clean up, introducing prudence and probity in public financing.
At an early stage, the federal government addressed the issue of salary arrears in many states, a situation capable of degenerating into social unrest. The APC government stepped in to provide short-term support to the debtor states and enabled them to pay off the backlog and restore the livelihood of millions of Nigerians.
Fellow Nigerians, there have been a lot of anxiety and impatience over the apparent delay in announcement of ministers. There is no cause to be anxious. Our government set out to do things methodically and properly. We received the handing over notes from the outgoing government only four days before taking over. Consequently, the Joda Transition Committee submitted its Report on the reorganization of Federal Government structure after studying the hand over notes. It would have been haphazard to announce ministers when the government had not finalized the number of ministries to optimally carry the burden of governance.
Anyway, the wait is over. The first set of names for ministerial nominees for confirmation has been sent to the senate. Subsequent lists will be forwarded in due course. Impatience is not a virtue. Order is more vital than speed. Careful and deliberate decisions after consultations get far better results. And better results for our country is what the APC government for CHANGE is all about.
I would like to end my address this morning on our agenda for CHANGE. Change does not just happen. You and I and all of us must appreciate that we all have our part to play if we want to bring change about. We must change our lawless habits, our attitude to public office and public trust. We must change our unruly behaviour in schools, hospitals, market places, motor parks, on the roads, in homes and offices. To bring about change, we must change ourselves by being law-abiding citizens.
Happy Independence Celebrations. Long live the Federal Republic of Nigeria.
I am immensely grateful to God who has preserved us to witness this day and this occasion. Today marks a triumph for Nigeria and an occasion to celebrate her freedom and cherish her democracy. Nigerians have shown their commitment to democracy and are determined to entrench its culture. Our journey has not been easy but thanks to the determination of our people and strong support from friends abroad we have today a truly democratically elected government in place.
I would like to thank President Goodluck Jonathan for his display of statesmanship in setting a precedent for us that has now made our people proud to be Nigerians wherever they are. With the support and cooperation he has given to the transition process, he has made it possible for us to show the world that despite the perceived tension in the land we can be a united people capable of doing what is right for our nation. Together we co-operated to surprise the world that had come to expect only the worst from Nigeria. I hope this act of graciously accepting defeat by the outgoing President will become the standard of political conduct in the country.
I would like to thank the millions of our supporters who believed in us even when the cause seemed hopeless. I salute their resolve in waiting long hours in rain and hot sunshine to register and cast their votes and stay all night if necessary to protect and ensure their votes count and were counted. I thank those who tirelessly carried the campaign on the social media. At the same time, I thank our other countrymen and women who did not vote for us but contributed to make our democratic culture truly competitive, strong and definitive.
I thank all of you.
Having just a few minutes ago sworn on the Holy Book, I intend to keep my oath and serve as President to all Nigerians.
I belong to everybody and I belong to nobody.
A few people have privately voiced fears that on coming back to office I shall go after them. These fears are groundless. There will be no paying off old scores. The past is prologue.
Our neighbours in the Sub-region and our African brethenen should rest assured that Nigeria under our administration will be ready to play any leadership role that Africa expects of it. Here I would like to thank the governments and people of Cameroon, Chad and Niger for committing their armed forces to fight Boko Haram in Nigeria.
I also wish to assure the wider international community of our readiness to cooperate and help to combat threats of cross-border terrorism, sea piracy, refugees and boat people, financial crime, cyber crime, climate change, the spread of communicable diseases and other challenges of the 21st century.
At home we face enormous challenges. Insecurity, pervasive corruption, the hitherto unending and seemingly impossible fuel and power shortages are the immediate concerns. We are going to tackle them head on. Nigerians will not regret that they have entrusted national responsibility to us. We must not succumb to hopelessness and defeatism. We can fix our problems.
In recent times Nigerian leaders appear to have misread our mission. Our founding fathers, Mr Herbert Macauley, Dr Nnamdi Azikiwe, Chief Obafemi Awolowo, Alhaji Ahmadu Bello, the Sardauna of Sokoto, Alhaji Abubakar Tafawa Balewa, Malam Aminu Kano, Chief J.S. Tarka, Mr Eyo Ita, Chief Denis Osadeby, Chief Ladoke Akintola and their colleagues worked to establish certain standards of governance. They might have differed in their methods or tactics or details, but they were united in establishing a viable and progressive country. Some of their successors behaved like spoilt children breaking everything and bringing disorder to the house.
Furthermore, we as Nigerians must remind ourselves that we are heirs to great civilizations: Shehu Othman Dan fodio’s caliphate, the Kanem Borno Empire, the Oyo Empire, the Benin Empire and King Jaja’s formidable domain. The blood of those great ancestors flow in our veins. What is now required is to build on these legacies, to modernize and uplift Nigeria.
Daunting as the task may be it is by no means insurmountable. There is now a national consensus that our chosen route to national development is democracy. To achieve our objectives we must consciously work the democratic system. The Federal Executive under my watch will not seek to encroach on the duties and functions of the Legislative and Judicial arms of government. The law enforcing authorities will be charged to operate within the Constitution. We shall rebuild and reform the public service to become more effective and more serviceable. We shall charge them to apply themselves with integrity to stabilize the system.
For their part the legislative arm must keep to their brief of making laws, carrying out over-sight functions and doing so expeditiously. The judicial system needs reform to cleanse itself from its immediate past. The country now expects the judiciary to act with dispatch on all cases especially on corruption, serious financial crimes or abuse of office. It is only when the three arms act constitutionally that government will be enabled to serve the country optimally and avoid the confusion all too often bedeviling governance today.
Elsewhere relations between Abuja and the States have to be clarified if we are to serve the country better. Constitutionally there are limits to powers of each of the three tiers of government but that should not mean the Federal Government should fold its arms and close its eyes to what is going on in the states and local governments. Not least the operations of the Local Government Joint Account. While the Federal Government can not interfere in the details of its operations it will ensure that the gross corruption at the local level is checked. As far as the constitution allows me I will try to ensure that there is responsible and accountable governance at all levels of government in the country. For I will not have kept my own trust with the Nigerian people if I allow others abuse theirs under my watch.
However, no matter how well organized the governments of the federation are they can not succeed without the support, understanding and cooperation of labour unions, organized private sector, the press and civil society organizations. I appeal to employers and workers alike to unite in raising productivity so that everybody will have the opportunity to share in increased prosperity. The Nigerian press is the most vibrant in Africa. My appeal to the media today – and this includes the social media – is to exercise its considerable powers with responsibility and patriotism.
My appeal for unity is predicated on the seriousness of the legacy we are getting into. With depleted foreign reserves, falling oil prices, leakages and debts the Nigerian economy is in deep trouble and will require careful management to bring it round and to tackle the immediate challenges confronting us, namely; Boko Haram, the Niger Delta situation, the power shortages and unemployment especially among young people. For the longer term we have to improve the standards of our education. We have to look at the whole field of medicare. We have to upgrade our dilapidated physical infrastructure.
The most immediate is Boko Haram’s insurgency. Progress has been made in recent weeks by our security forces but victory can not be achieved by basing the Command and Control Centre in Abuja. The command centre will be relocated to Maiduguri and remain until Boko Haram is completely subdued. But we can not claim to have defeated Boko Haram without rescuing the Chibok girls and all other innocent persons held hostage by insurgents.
This government will do all it can to rescue them alive. Boko Haram is a typical example of small fires causing large fires. An eccentric and unorthodox preacher with a tiny following was given posthumous fame and following by his extra judicial murder at the hands of the police. Since then through official bungling, negligence, complacency or collusion Boko Haram became a terrifying force taking tens of thousands of lives and capturing several towns and villages covering swathes of Nigerian sovereign territory.
Boko Haram is a mindless, godless group who are as far away from Islam as one can think of. At the end of the hostilities when the group is subdued the Government intends to commission a sociological study to determine its origins, remote and immediate causes of the movement, its sponsors, the international connexions to ensure that measures are taken to prevent a reccurrence of this evil. For now the Armed Forces will be fully charged with prosecuting the fight against Boko haram. We shall overhaul the rules of engagement to avoid human rights violations in operations. We shall improve operational and legal mechanisms so that disciplinary steps are taken against proven human right violations by the Armed Forces.
Boko Haram is not only the security issue bedeviling our country. The spate of kidnappings, armed robberies, herdsmen/farmers clashes, cattle rustlings all help to add to the general air of insecurity in our land. We are going to erect and maintain an efficient, disciplined people – friendly and well – compensated security forces within an over – all security architecture.
The amnesty programme in the Niger Delta is due to end in December, but the Government intends to invest heavily in the projects, and programmes currently in place. I call on the leadership and people in these areas to cooperate with the State and Federal Government in the rehabilitation programmes which will be streamlined and made more effective. As ever, I am ready to listen to grievances of my fellow Nigerians. I extend my hand of fellowship to them so that we can bring peace and build prosperity for our people.
No single cause can be identified to explain Nigerian’s poor economic performance over the years than the power situation. It is a national shame that an economy of 180 million generates only 4,000MW, and distributes even less. Continuous tinkering with the structures of power supply and distribution and close on $20b expanded since 1999 have only brought darkness, frustration, misery, and resignation among Nigerians. We will not allow this to go on. Careful studies are under way during this transition to identify the quickest, safest and most cost-effective way to bring light and relief to Nigerians.
Unemployment, notably youth un-employment features strongly in our Party’s Manifesto. We intend to attack the problem frontally through revival of agriculture, solid minerals mining as well as credits to small and medium size businesses to kick – start these enterprises. We shall quickly examine the best way to revive major industries and accelerate the revival and development of our railways, roads and general infrastructure.
Your Excellencies, My fellow Nigerians I can not recall when Nigeria enjoyed so much goodwill abroad as now. The messages I received from East and West, from powerful and small countries are indicative of international expectations on us. At home the newly elected government is basking in a reservoir of goodwill and high expectations. Nigeria therefore has a window of opportunity to fulfill our long – standing potential of pulling ourselves together and realizing our mission as a great nation.
Our situation somehow reminds one of a passage in Shakespeare’s Julius Ceasar
There is a tide in the affairs of men which,
taken at the flood, leads on to fortune;
Omitted, all the voyage of their life,
Is bound in shallows and miseries.
We have an opportunity. Let us take it.
President Federal Republic of NIGERIA
Commander in-chief-of the Armed forces
Transaction costs impact businesses and economies all over the globe. It is defined as the cost of operating within a market, or “the costs, other than the money, that are incurred in trading goods or services”, including, but not limited to the cost of information. Information is indeed power in all respects. The right information, in the right hands, at the right time, can reduce the impacts of moral hazard and adverse selection in business and economic operations.
The Nigerian Government in 2011, publicized the consideration of a proposal to eliminate fuel subsidy from its annual budget. As expected, this proposal has been the subject of critical analysis and discourse, on both television and radio talk shows, social networking sites, and most recently, the National Assembly. One major issue, worsening this Nigerian quagmire of policy and decision making, is the availability, veracity and integrity of information.
It remains unclear to Nigerians what the estimated daily demand of PMS is. How much do we consume each day? What part of this demand is produced and supplied locally? What is the short-fall quantity that requires importation? What quantities were actually imported and paid for? Were quantities verified? It further remains unclear what the actual (sunk) cost of fuel subsidy for 2011 is – N1.3 trillion? N1.5 trillion? or what? The definition of fuel subsidy in itself seems to appreciate in vagueness by the day.
In this regard, and with the available information on current PMS retail price, current landing cost and ex-depot price (via PPPRA website), a scenario analysis has been run, with a permutation of numbers, in an attempt to demystify the concept of fuel subsidy and the method of evaluating its cost to government.
The analysis is seen here: The Arithmetic of Fuel Subsidy
For too long, Nigeria and Nigerians have been readily associated with the online scams and financial crime – termed ‘419’. However, beyond the unfortunate stereotyping, there are several positive characteristics and intriguing traits of the country, Nigeria and its people, some of which are highlighted below as part of the ‘419 Reasons to Like Nigeria’ campaign which enlisted 100 volunteers and bloggers to share reasons why they like Nigeria. These reasons echo the voices of Nigerians, with resonating similar themes. The campaign is facilitated in partnership with ‘The 419Positive Project’.
The full list of ‘419 Reasons to Like Nigeria’ is available here (www.419Positive.org)
The list of contributors to ‘419 Reasons to Like Nigeria’ is available here
If you would like to say something positive about Nigerians and Nigeria, please do so here.
NIGERIA – THE LAND OF POTENTIAL AND OPPORTUNITY
NIGERIA – THE COUNTRY
NIGERIA – THE CULTURE, THE FOOD, THE WAY OF LIFE
NIGERIA – THE MUSIC, THE MOVIES, THE DANCE, THE ART
NIGERIA – GEOGRAPHY and NATURAL RESOURCES
NIGERIA – WEST AFRICA, AFRICA and THE WORLD
NIGERIA – INDUSTRIOUS, INNOVATIVE and ENTERPRISING, with ACHIEVEMENTS
NIGERIA – GREAT PEOPLE
NIGERIA – THE RESILIENT SPIRIT
NIGERIA – TOURISM and SPORTS
NIGERIA – UNITY in DIVERSITY
The ‘419 Reasons to Like Nigeria’ Campaign is in partnership with ‘The 419Positive Project’.
The major opposition political parties should field 1 strong candidate for the forthcoming Presidential Elections in April 2011!
What do you think?
Poll link: http://bit.ly/hwQEor
Goodluck by D’banj?
It’s the evening of March 17, 2011. The day is winding to a close but not just yet. All of a sudden, twitter goes agog with news that there will be a ‘pro youth’ interview of the incumbent President of Nigeria, Dr Goodluck Jonathan, hosted by the award winning Nigerian artiste, D’banj.
This came as an unexpected development to many, with its suddenness and the seeming strategic timing – 8 days before the proposed presidential aspirant’s debate organized by the coalition of Nigerian youth bodies tagged “What About Us?” – slated for the 25th of March. It is not yet clear whether Dr Jonathan has agreed to attend this proposed debate. Many will recall that the Vice President, Mr Namadi Sambo, was absent from the March 11 Vice Presidential aspirant debate organized by the satellite television channel, NN24.
The interview, hosted by D’banj, kicked off as planned, and immediately, started to elicit numerous comments and reactions from viewers nationwide. A majority probably disagreed with the ‘kokomaster’s’ involvement in the whole plot, while others commented that he was quite reticent, asking just a few questions, compared with a typical interview host. Through the whole broadcast, it was clear that most technology enabled Nigerian youth (on twitter) were not impressed by the apparent campaign tool.
It is at this point that I attempt to engage in some analysis. My primary focus here is not the content of the interview but its possible strategic purpose. It is obvious that Dr Jonathan and his PDP comrades deployed this interview as a campaign tool targeting Nigerian youth. Despite seeing the move as lame, one cannot ignore the fact that there is a sly and cunning crew developing and implementing political campaign strategies for the ruling party. It looks like so many viewers got carried away with the questionable content and plot of the interview, taking sides and forming opinions about the host, yet, remaining oblivious to the strategy behind the interview and the targeted audience.
Who was the target audience? Was it the Nigerian youth? If yes, many will probably condemn the effort concluding that it was unsuccessful in its ploy. Determining whether it was successful or not is hinged on what the intent was, who the real target audience was, and whether the goal was achieved.
By extrapolation, it can be deduced that GEJ’s strategists have conducted some form of market segmentation of the youth category, splitting them up into 3 possible groups – the grassroots (masses), the tech-enabled and upwardly mobile, and the apathetic. The grassroots/masses obviously hold the largest market share relative to the others, and it is this group that the campaign has targeted. While the tech enabled and upwardly mobile, twitter and facebook savvy category is busy ramping up support mainly via social media and networking tools, the incumbent is deploying his market penetration tool, via mass marketing.
As if that were not enough, GEJ’s strategists further did a careful selection of his interview host, choosing a well known and musically influential brand – D’banj. His strategist employs the concept of brand extension, to further penetrate this youth mass market at the grassroots, introducing the product – Goodluck by D’banj. Brand extension has successfully favoured many corporate brands in the past and present, include Courtyard by Marriott, Fourpoints by Sheraton, Polo by Ralph Lauren, to name a few. This forms the second hinge of their campaign strategy – as association of brands to bring the product to the door step of the masses. The impact on the target market? Immeasurable. Even though many upwardly mobile youth still see the whole plot as a sham, they fail to realize that they are not the target. First it was a facebook president, now it’s a ‘youth’ focused president. So, say what you may, the campaign is working, and the product is selling – Goodluck by D’banj!
As the political front gets more captivating, it is left for the opposition to play its own card in this battle for the youth market share. Where there are strategies, there can be counter-strategies. Will the opposition launch a more successful product to mass youths at the grassroots? Or will the youth focus be limited to the tech-enabled social networking youth? Will there be an intense tussle over market share? Will there be a battle of the strategists?
Whichever way this wind blows, whether it is “Goodluck by D’banj” or “The Opposition by another”, one thing is clear – the youth matter!