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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.

 

CEO/Founder Investors King Ltd, a foreign exchange research analyst, contributing author on New York-based Talk Markets and Investing.com, with over a decade experience in the global financial markets.

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Government

FG Approves $11.17B To Link Coaster Cities With Standard Gauge Rail Line

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On Wednesday, the federal government of Nigeria approved $11.17 billion for the construction of rail line to link all of Nigeria’s coastal cities in six years.

According to the minister of Information and Culture, Lai Mohammed, the funds was approved by the cabinet at their meeting presided over by Vice President Yemi Osinbajo.

Mohammed said that the Minister of Transportation, Rotimi Amaechi, presented two memos which had to do with Federal Government’s commitment to expanding and consolidating on the rail project.

“The first one has to do with the Kano-Jibia rail and the other one has to do with the Port Harcourt-Maiduguri rail.

“Actually, what was approved today was funding to ensure that work starts immediately on those two rails.

“And then, also another memo that was approved today was the ratification of the president’s approval for the award of contract for the Lagos-Calabar Coastal Standard Gauge.”

He said the project was an old project which was inherited by current administration.

Mohammed said that under the former administration, approval was given but nothing was done.

“Today, the council has given approval to commence the Lagos-Calabar Coastal rail.

“This particular route is very important because after the Lagos-Kano route, this Lagos-Calabar Coastal route actually will link all the coastal cities in the country.

“Actually, the proposed route alignment is as follows; it will go from Lagos to Sagamu, Sagamu to Ijebu-Ode, Ijebu-Ode to Ore, Ore to Benin City, Benin-City to Sapele, Sapele to Warri, Warri to Yenogoa, Yenegoa to Port Harcourt, Port Harcourt to Aba, Aba to Uyo, Uyo to Calabar, Calabar to Akamkpa to Ikom, Obudu Ranch with branch lines from Benin-City to Agbo, Ogwashi-ukwu, Asaba, Onitsha and Onitsha Bridge and then Port Harcourt to Onne Deep Sea Port.

“This particular route is very important especially for our coastal economy; the cost of the project is $11.17 billion,” he said.

According to him, the project is expected to be completed in six years.

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The African Union Commission and TRAFFIC Sign a MoU to Combat Illegal Wildlife Trade and Support Development

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Protecting Africa’s wildlife from unstainable and illegal harvest and trade and the contribution legal trade and use can provide towards livelihoods and development of Africa’s people is at the heart of a newly signed Memorandum of Understanding between TRAFFIC and the African Union Commission (AUC).

Under this agreement, the parties will collaborate to support the African Union Member States’ policies for environment, wildlife management and trade, and conservation and recognise that wild flora and fauna loss affect African people’s livelihoods, especially during post-pandemic recovery. It acts as a framework to combat the illegal exploitation and trade in Africa’s rich wildlife with a joint goal of protecting flora, and fauna on land, wetlands, and marine ecosystems.

The Memorandum of Understanding is a significant step towards implementing the African Union’s Wildlife Strategy and was signed by Her Excellency Ambassador Josefa Sacko, AUC Commissioner for Agriculture, Rural Development, Blue Economy and Sustainable Environment (ARBE) and Steven Broad, TRAFFIC Executive Director.

On the occasion of the signing, the MoU, H.E. Amb. Josefa Sacko, AUC Commissioner for Agriculture, Rural Development, Blue Economy and Sustainable Environment (ARBE) states: “For the African Union, this is an important MoU for the safeguarding of Africa’s wild biodiversity. We are looking forward to deepening our already great collaboration with TRAFFIC and are welcoming TRAFFIC’s technical support and policy which stems from its evidence-based experience, on how to keep the use and trade of wild-harvested flora and fauna at legal and sustainable and levels, and on how to best combat any illegal trade and overexploitation threatening our biodiversity.”

“We are committed to improving the sustainability of Africa’s wildlife, environment and legal trade to support national economies and local development across the continent alongside the African Union Commission. It is a promising and welcome step towards sustainable wildlife trade in Africa” said Richard Scobey, Executive Director for TRAFFIC.

With 45 years of experience, a global network of expertise and ongoing projects in the field, TRAFFIC will provide the AUC and its Member States with the latest evidence-based technical guidance to implement sustainable natural resource strategies that support national economies and local community development. Existing TRAFFIC projects like Reducing Illegal Timber Exports already work with communities living adjacent to forests with the legal knowledge and tools to reap the rewards of legal, sustainable forest management.

Additionally, TRAFFIC’s growing portfolio of work with private sector companies along the supply chain including e-commerce, transportation and financial sector companies directly support common interests and sustainable development agendas. TRAFFIC will also collaborate with and support the African Union Commission in the effective implementation of the Green Recovery Action Plan, providing support especially to the ‘Biodiversity and Nature-based Solutions’ component.

On the international front, TRAFFIC will also assist the AU and its Member States to prepare for and build relationships at multilateral summits such as The Convention on Biological Diversity (CBD), the Convention on International Trade in Endangered Species of Wild Fauna and Flora (CITES). These crucial meetings can be informed by holistic and pioneering methods like the Trade in Wildlife eXchange (TWIX) platforms in Central, Southern and Eastern Africa to support the elimination of the illegal trade of Africa’s fauna and flora. At the same time, other international TRAFFIC behaviour change projects work across the globe to reduce demand for illegally and unsustainably harvested wild fauna and flora at the end of the supply chain, whilst supporting choices for wildlife stemming from sustainable and legal sources.

H.E. Amb. Josefa Sacko continues to express: “The AU is further looking forward to co-operating with TRAFFIC in preparations for key multilateral and bilateral fora, such as for example for CBD and CITES, as well as for the environmental components of the Commission’s frameworks and partnerships. We hope that African negotiators participating at such fora can be better capacitated.”

We also welcome TRAFFIC’s commitment to collaborate with and support the Commission in the effective implementation of the Green Recovery Action Plan, providing support especially to the ‘Biodiversity and Nature-based Solutions’ component to which we can bring considerable technical expertise and international experience.”

Existing intergovernmental relationships between the AU and the Member States allow coordination with the relevant ministry departments and other government sectors. In a post-pandemic world, not only will this be vital for conservation and development but will enable sound and evidence-based responses to zoonoses-induced threats stemming from wildlife trade.

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Oyo Begins Training of 3,300 Youths in Agribusiness

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Governor Seyi Makinde of Oyo State

The Oyo State Government has signed a memorandum of understanding with the CSS Global Integrated Farms in Nasarawa State to train 3,300 youths from the state on agriculture and agribusiness.

The state governor, Seyi Makinde, made this disclosure at the Stakeholders Consultative Meeting on the 2022 Budget, noting that the move is part of measures being taken by his administration to address the challenges of youth unrest and youth unemployment.

He equally explained that the state government’s decision to reconstruct the Oyo-Iseyin federal road was borne out of the need to prevent the state’s investments in the Fashola Agribusiness Hub from becoming a waste as a result of lack of road access.

A statement by the Chief Press Secretary to the governor, Mr Taiwo Adisa, quoted him as explaining that the training will have 150 participants per batch and that the first batch is to begin training this week.

“I am happy to tell you that we just signed an MoU with CSS Farms in Nasarawa State to assist us in training 3,300 youths in agriculture and agribusiness.

“The training will last two weeks. The first set will start on August 1, and there will be 150 participants for every batch. By the end of August, we would have trained 600 of them.”

Governor Makinde, who stated that his administration will do everything to ensure that youths in the state are meaningfully engaged, said he has also instructed the local governments to set up Direct Labour Agencies, which would absorb the youths to engage in minor construction and other works.

He said: “Our youths have to be meaningfully engaged and we will continue to strive. What I asked them to do in each local government is to set up a Direct Labour Agency, in which a certain amount of money will be earmarked for them every month.

“They will be the ones to be doing culverts, fixing street lights, channelisation of drainages and we have an arrangement with the local government chairmen. As soon as we put the new cabinet in place, I assure you that whoever becomes the new Commissioner for local government matters will drive the process.”

The governor equally said that his administration has been investing heavily in sports development in order to take youths off the streets, saying the investments in the Lekan Salami Stadium and other sporting facilities will soon pay off.

“Some of us have talked about our troublesome youths who are disturbing the peace of our environments because they have nothing doing. This is why the Oyo State Government has committed resources of about N6bn to remodel the Lekan Salami Stadium, not only for football but for other sporting activities.

“We have to be patient with the government so that we don’t lose focus. What you are doing at the community level and what we are doing at the state level, what we need to do is to consolidate, which is the only way we can develop the talents in our communities. We should not relent.

“So, I also want to urge our local government chairmen and chairpersons to develop their programmes to ensure they utilise the sports facilities we have put in place.”

While stating that the state is set to flag off the Oyo-Iseyin Road once it obtains the written approval, Governor Makinde said: “I went to Abuja to meet with the Minister of Works and Housing, Babatunde Raji Fashola. We are hell-bent on the reconstruction and rehabilitation of Oyo-Iseyin road even though it is a federal road.

“This is because we are investing a lot of money in the Fashola farm estate there. If we don’t fix that road, all of that money will go to waste.

“I am happy to report that the Minister was gracious and has given his verbal go-ahead. He asked us to come with the document and it will be signed.”

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