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From Nigerian Economic Summit, a Path to Development

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Nigerian economy
  • From Nigerian Economic Summit, a Path to Development

The 22nd Nigerian Economic Summit (NES #22), organised by the Nigerian Economic Summit Group, in collaboration with the Ministry of Budget and National Planning, last week in Abuja, brought together, policy makers, investors, government functionaries and industry stakeholders to deliberate on the state of the Nigerian economy. This was with a view to facilitating stakeholders’ agreements on practical issues, opportunities, policies and regulations needed to achieve self-sufficiency and value-addition capacities for several products and services in the shortest possible time.

With the theme: ‘Made in Nigeria’ the three days summit was designed to conceptualise ‘Made In Nigeria’ as an economic growth and development strategy for short, medium and long-term development that would boost self-sufficiency and increase exports for foreign exchange earnings for Nigeria.

The essence of the summit was to reshape the thinking of government from over-dependence on crude oil, to a more diversified economy with several sources of income that would boost the country’s foreign exchange earnings.

Most economies that depend on commodities, especially crude oil for their national income, are going through major decline in their external earnings. But Nigeria has some peculiarities, given its import dependency and its huge consumption economy. This has led to negative economic growth, dwindling foreign reserves and mounting pressure on local currency exchange rate relative to major currencies.

The resulting social challenges include increasing unemployment, reducing income, pervasive poverty and a decline in funding public and social projects that would have benefitted the masses.

In order to address these challenges, the NES #22, discussed in details, issues that would put Nigeria on the right path of economic growth and development.

Some of the measures reached at the summit, include promoting production and consumption of ‘Made in Nigeria’ goods and services, while maintaining a trade balance between imports and exports and recognising the realities of globalisation. The summit believed that these would reinvigorate moribund industries and services that had shown potentials in the past and curtail the growing demand for foreign exchange for consumption rather than capital products and equipment.

Past Nigerian Economic Summits have made recommendations on self-sufficiency in local production and an export-driven economy, which were re-echoed at this year’s summit. These include macroeconomic environment issues like the ease of doing business; access to finance; infrastructure; quality and standards; technology and innovation; as well as job creation, skills acquisition and youth employment. All these were designed by the Nigerian Economic Summit Group to revamp the dwindling state of the Nigerian economy, which is currently passing through recession.

State of the Nigerian economy

Speaking on the state of the economy in his keynote presentation at the summit, Chairman, Nigerian Economic Summit Group (NESG) Board Committee on Research and Publication, Dr. Adedoyin Salami, said the current state of the Nigerian economy was in bad shape, but that it could be resuscitated if there was full support and patronage for Made in Nigeria goods and services, which was carefully selected as the theme of this year’s summit.

He went further to state that the ‘Made in Nigeria’ call was a call to create a productive and sustainable economy, and that the Nigerian economy needed to be productive, globally competitive, inclusive and must be able to add value to its citizens.

According to him, “Our economy is far from ideal but offers us opportunity to revitalise. The economy has shrunk in size, capital flows have been poor and generally, the Nigerian economy has been negatively impacted by the external environment, mainly the price of crude oil. On the domestic side, there have been absence of a development plan for strategic framework, low global competitiveness and poor ease of doing business.”

Current earnings statistics of the Nigerian economy are not ideal, as export earning was $97 billion in 2013, but this year, Nigeria will be lucky to earn $40 billion. This scenario presents an opportunity for us to revitalise the economy, Salami said.

He said more than 50 per cent of young people in Nigeria between 15 and 25 years were either unemployed or under-employed, which he said, was not good for economic growth.

Presidential Position

Declaring the 22nd Nigerian Economic Summit open, President Muhammadu Buhari reassured Nigerians of government’s commitment to diversify the economy, in order to make Nigeria less dependent on oil. “As I have said in the past, we need to diversify the economy so that we will never again have to rely on one commodity to survive as a country. So that we can produce the food we eat, make our own textiles, produce most of the things we use and create the right environment for our young to be able to benefit and create jobs through technology. This has been the commitment and mandate of this administration and I have remained focus on it since the assumption of this administration,” Buhari said.

The President added that there was clearly no better way to achieve this without building on economic foundation of ‘Made in Nigeria’ goods and services. Fortunately, we have champions of ‘Made in Nigeria’ goods and services that have defied the odds over the years to produce locally developed products and contribute to our economy, Buhari added.

“Initiative and incentives that will enhance ‘Made in Nigeria’ are already being put in place by this administration, and I encourage more local production, to improve the ease of doing business in our environment, transfer our technology and innovation capabilities, improve quality and standards, promote export and change our old attitude and behaviour,” Buhari said.

My greatest desire is to see Nigeria move from import dependence to self-sufficiency in local production and become an export-led economy in goods and services, the president said.

Vice President Yemi Osinbajo raised the hope of Nigerians, assuring them that the federal government was determined to revamp the economy through its policy implementation, designed to diversify the economy.

Osinbajo who spoke at the Policy Dialogue Forum on the state of the Nigerian economy, said there was need for government to inject more money into circulation to cushion the effect of the current recession, and that one of the ways through which government could achieve it, was to inject the expected N350 billion that was looted by past governments into the economy to fund budget planning and implementation.

“A good percentage of the stoen monies has been recovered, and we are still expecting about $400 million from the US and about $300 million from Switzerland. By the time all these monies are recovered, we will surely inject them into circulation to support budget funding,” Osinbajo said.

Disturbing Issues

The summit raised several issues militating against the growth of the Nigerian economy, among which, are the unfriendly business environment, high rate of unemployment, high interest rate on importation of equipment by investors, weak implementation of government policies, and the difficulties in accessing land by willing investors.

Stakeholders, especially investors who were present at the summit, complained of unfriendly business environment in Nigeria and called for quick government intervention.

Senate President Bukola Saraki noted that the enhancement of ease of doing business is very crucial. He talked about the initiative of the Senate known as the National Assembly Business Environment Roundtable (NASSBER) document, which seeks to address 11 key areas where laws governing business activities may need to be reviewed as a result of the country’s harsh business environment.

The Minister of Mines and Steel Development, Dr. Kayode Fayemi, who also spoke at the policy dialogue forum of the 22 Nigerian Economic Summit, revealed why Nigeria had not been successful in the areas of solid minerals and mining. According to him, the country has good policies for the mining sector, but lacks proper implementation of those policies that should drive the economy. While faulting the legal and regulatory environment of the mining sector, Fayemi said several people were involved in illegal mining in the country, noting that they see nothing wrong in it, since the mineral resources are located within their farmlands.

Although the summit identified some critical factors that impeded job creation in the past such as high interest rates, uneven distribution of fertilisers and lack of full implementation of some government policies, some investors like Aliko Dangote of Dangote Group and Jay Ireland of GE Africa, were however of the view that investment in agriculture, infrastructure and power were key factors that would open up job opportunities and job creation for the country.

According to Dangote, government must invest in agriculture, mining and manufacturing, including training, in order to give Nigerians the opportunity to acquire relevant skills that would make them employable. He said Dangote Group had set aside N15 billion for training of Nigerians in cement manufacturing, but expressed worries on the issue of land acquisition for business expansion.

Ogun State Governor, Ibikunke Amosun, said it was in the interest of government to create jobs for its citizens.

He said agriculture was the best option for Nigeria to engage its citizens in the area of job creation, and that the private sector must be involved in all of these. He said in Ogun State, government released N500 million, while banks released another N500 million to finance agriculture in the state.

Kebbi State Governor, Abubarka Atiku Bagudu, said the economic recession that Nigeria was passing through was an eye opener for government to diversify the economy and create more jobs for the people, instead of depending on oil.

Giving investment details in other regions, Dangote said in Algeria, investors have zero interest rate, zero taxation and in addition to that, the government of Algeria provides subsidies for investors that import necessary equipment for local production.

Osinbajo however said Nigeria had policies for duty waiver on agriculture and tax holidays for some sectors, but explained that the full implementation of the policies may be an issue for the country, which he said must be addressed without delay.

The Remedy

Suggesting possible ways to address Nigeria’s challenges, Salami said there was need to improve on the country’s economy and make it internally coherent. For the Made in Nigeria initiative to be successful, it is important to recognise global trends, identify the ones that are advantageous and disadvantageous and we must do away with the ones that are not beneficial, Salami added.

He outlined four areas that are critical success factors, which include building confidence in Nigerian policies through proper communication; articulating development plan; addressing issues of fiscal and monetary policies to complement each other; and making public procurement of ‘Made in Nigeria’ goods imperative.

Chairman, Signal Alliance, an Information Technology (IT), expert, who is member of the Lagos Angel Network, Mr, Collins Onuegbu, said the best way to develop local content in ICT is for government to invest in technology start-ups and make funds available for them to boost technology innovation and creativity. “Aside funding the start-ups, government must also consider giving tax rebate to investors who may have invested in start-ups that could not break even,” Onuegbu said.

He explained that one major drawback about investing in start-ups is that nine out of every 10 startups sponsored by Angel Investors or any other investor, may end up not being successful. He therefore said that government must begin to think of how to compensate investors by way of exempting them from taxes, until they recoup their investment on the failed startps. “If such palliatives are offered by government for investors who invest in technology startups, it will encourage them to invest more and create opportunity for growth in the ICT sector,” Onuegbu said.

Having identified and examined critical factors impeding Nigeria’s economic development, the summit concluded that the best time to address the country’s challenges is now, and called on the private sector to come out in their numbers to join government in putting Nigeria on the right economic path.

 

Is the CEO/Founder of Investors King Limited. A proven foreign exchange research analyst and a published author on Yahoo Finance, Businessinsider, Nasdaq, Entrepreneur.com, Investorplace, and many more. He has over two decades of experience in global financial markets.

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Russia and North Korea Revive Military Pact, Heightening Tensions with US

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Russian President Vladimir Putin and North Korean leader Kim Jong Un have revived a Cold War-era military pact.

The agreement, signed on Wednesday during Putin’s first visit to North Korea in 24 years, commits the two nations to provide immediate military assistance to each other if either is attacked.

This development is likely to exacerbate tensions with the United States and its allies.

The Comprehensive Strategic Partnership Treaty, as the pact is officially named, represents the most powerful treaty signed between the two countries, according to Kim.

“This treaty elevates our ties to an alliance,” he declared during the signing ceremony. The deal stipulates that if either nation is invaded by an armed force, the other will provide military and other assistance “with all the means at its disposal,” in line with Article 51 of the United Nations Charter and the laws of both nations.

Putin’s visit to Pyongyang and the signing of the pact come on the heels of Kim’s trip to Russia in September, an event that has already resulted in a notable increase in arms transfers between the two countries, as confirmed by satellite imagery.

Despite the mounting evidence, both Moscow and Pyongyang have denied any such exchanges.

The renewed military alliance marks a significant escalation in the strategic partnership between Russia and North Korea, which had been relatively dormant since the end of the Cold War.

Analysts suggest that this move is a clear message of defiance to Western powers, particularly the United States, which has been involved in ongoing disputes with both nations over various geopolitical issues.

“The Comprehensive Strategic Partnership Treaty is for defensive purposes,” Kim stated, but experts warn that the alliance increases the risks for the US and its partners in responding to provocations from Moscow and Pyongyang. The treaty not only includes mutual defense commitments but also outlines plans to enhance cooperation in trade and investment, further solidifying the bilateral relationship.

Russian officials emphasized that the pact is a natural progression of the countries’ shared interests.

“This treaty is a testament to the deepening strategic and military cooperation between Russia and North Korea,” said Sergey Lavrov, Russia’s Foreign Minister. “It is essential for maintaining regional stability and countering external threats.”

The US and its allies have expressed grave concerns over the implications of this agreement. “This treaty significantly alters the security landscape in East Asia,” stated a senior US State Department official. “It underscores the need for vigilance and reinforces the importance of our alliances in the region.”

Military analysts are closely watching the developments, noting that the alliance could embolden both nations to take more aggressive stances on the international stage.

“With this treaty, North Korea gains a powerful ally, while Russia secures a foothold in East Asia,” said Alexander Gabuev, a senior fellow at the Carnegie Moscow Center. “It is a strategic maneuver that complicates the geopolitical calculus for the US and its partners.”

The reactivation of the military pact also comes at a time when Russia is deeply involved in the conflict in Ukraine, where it faces significant opposition from Western nations.

North Korea’s unreserved support for Putin’s actions in Ukraine, as articulated by Kim, further aligns the two nations against common adversaries.

As the international community grapples with the potential ramifications of this treaty, it is clear that the renewed alliance between Russia and North Korea represents a formidable challenge to the current global order.

The coming months will likely see increased diplomatic activity as nations reassess their strategies in light of this development.

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Cyril Ramaphosa Begins New Term Under Coalition Government

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Cyril Ramaphosa

Cyril Ramaphosa was sworn in for another term as South Africa’s president on Wednesday, the beginning of a new era under a coalition government.

The ceremony held at the Nelson Mandela Amphitheater in the Union Buildings saw Ramaphosa take the oath of office before Chief Justice Raymond Zondo.

The event was attended by prominent dignitaries, including Nigerian President Bola Tinubu, Democratic Republic of Congo leader Felix Tshisekedi, and Zimbabwe’s Emmerson Mnangagwa, and was marked by a 21-gun salute and an air force flyover.

Ramaphosa’s reappointment comes three weeks after elections saw his party, the African National Congress (ANC), lose its parliamentary majority for the first time since the end of apartheid.

The ANC secured just over 40% of the vote on May 29, with millions of former supporters either backing a splinter party led by ex-leader Jacob Zuma or abstaining due to dissatisfaction over high levels of poverty, unemployment, and crime.

In his inauguration address, Ramaphosa emphasized the resilience of South African democracy and the need for unity.

“The resilience of our democracy has once more been tested, and the people have spoken loudly that they choose peace and democracy over conflict,” he said. “The voters of South Africa did not give any single political party the full mandate to govern our country alone. They have directed us to work together to address their plight and realize their aspirations.”

The ANC’s unprecedented electoral outcome necessitated a power-sharing agreement with long-time rivals. The main opposition Democratic Alliance (DA) and four other parties have agreed to join a government of national unity, supporting Ramaphosa’s leadership in exchange for cabinet and parliamentary positions.

This coalition is expected to prioritize economic growth, investment attraction, structural reforms, and sustainable management of state finances.

The rand strengthened to a level stronger than 18 per dollar for the first time in over ten months, and Johannesburg’s benchmark equity index reached a record high on Wednesday.

Market optimism is driven by the inclusion of business-friendly parties in the government, anticipated to bolster Ramaphosa’s reform agenda aimed at addressing power shortages, logistical challenges, and other economic impediments.

Despite criticism in his previous term for his consultative approach, which opponents labeled as indecisive, Ramaphosa reaffirmed his commitment to inclusive governance.

“Those who would like a president that is dictatorial, who is adventurous, who is reckless, will not find that in me,” he stated last month. “In me they will find a president who wants to consult. All these processes have often been seen as, ‘he is weak, he is not decisive.’ I am decisive, but I want to take people along with.”

The new coalition government faces significant challenges, including negotiating policy differences and accommodating politically powerful figures within the ANC and its partners.

The DA has already expressed concerns over the ANC’s uncosted national health insurance plan and its foreign policy stance.

Susan Booysen, director of research at the Mapungubwe Institute for Strategic Reflection, noted the complexities ahead. “South Africa is really moving into this with minimal on-the-ground preparation and justification,” she said. “The devil is going to be in the exact detail. Once cabinet is announced, some basic agreement will have to be reached on policy positions and on what the red-line issues will be.”

As Ramaphosa begins his new term, the nation watches closely, hopeful that this coalition government can navigate the intricate landscape of South African politics and bring about the much-needed reforms and stability.

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Fubara Appoints and Swears in Caretaker Chairmen for All 23 Rivers State LGAs

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Siminalayi Fubara

Governor Siminalayi Fubara of Rivers State has appointed and sworn in new caretaker chairmen for all 23 local government areas.

This significant action followed swiftly after the House of Assembly, led by factional Speaker Victor Jumbo, screened and confirmed the nominees earlier in the day.

The process began on Tuesday when Governor Fubara submitted the list of nominees to the state House of Assembly.

According to a statement by the Clerk of the House, G.M. Gillis-West, the nominees were summoned for an early morning screening at 8 a.m. on Wednesday.

The rapid succession of events underscores the urgency of the appointments amid ongoing political unrest in the state.

The political crisis intensified as former council chairmen, whose terms had expired, refused to vacate their offices.

This defiance prompted the need for a swift and firm resolution to ensure continuity and stability in local governance.

The swearing-in ceremony took place under tight security at the Executive Council Chambers of the Government House in Port Harcourt, the state capital.

Governor Fubara administered the oath of office to the first batch of eleven caretaker chairmen, with subsequent batches following promptly.

The newly appointed caretaker chairmen are:

  • Abua/Odua LGA: Madigai Dickson
  • Ahoada East LGA: Happy Benneth
  • Ahoada West LGA: Mr. Daddy John Green
  • Akuku Toru LGA: Otonye Briggs
  • Andoni LGA: Reginald Ekaan
  • Asari Toru LGA: Orolosoma Amachree
  • Bonny LGA: Alabota Anengi Barasua
  • Degema LGA: Anthony Soberekon
  • Eleme LGA: Brain Gokpa
  • Emouha LGA: David Omereji
  • Etche LGA: John Otamiri
  • Gokana LGA: Kenneth Kpeden
  • Ikwerre LGA: Darlington Orji
  • Khana LGA: Marvin Yobana
  • Obio/Akpor LGA: Emmanuel Dogwo
  • Ogba/Egbema/Ndoni LGA: Vincent Anyanwu
  • Ogu/Bolo LGA: Margaret Ezenwa
  • Okrika LGA: Chizoba Onyebuchi
  • Omuma LGA: Cynthia Amadi
  • Opobo/Nkoro LGA: Solomon Dokubo
  • Oyigbo LGA: Chima Nwafor
  • Port Harcourt LGA: Isaac Udochukwu
  • Tai LGA: Ruth Michael

Governor Fubara expressed confidence in the capabilities of the newly appointed chairmen and emphasized the importance of their roles in maintaining stability and driving development at the grassroots level.

He urged them to prioritize the needs of their communities and work diligently towards improving the quality of life for all residents of Rivers State.

The appointment of the caretaker chairmen is expected to quell the political tensions that have recently plagued the state, ensuring that local governance continues smoothly and efficiently.

As Rivers State navigates this transitional period, the administration remains committed to fostering a stable and prosperous environment for its citizens.

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