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Experts Want Government to Engage Economists

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  • Experts Want Government to Engage Economists

From economists came a warning to the Federal Government to involve experts in the management of the economy, if it is serious about pulling the nation out of economic doldrums.

Essentially, the economists believe the government’s economic team lacked the necessary skill, to do what is required to build investors confidence in the country.

They decried the inability of the government to fashion out an economic blueprint to guide its actions and policies to stabilize the economy, warning that the country may be heading for the worse, if it continues with the present unclear and uncoordinated policies.

President of the Nigeria Economic Society (NES), Prof. Ben Aigbokan told The Guardian in an exclusive interview that “Until the Federal Government gives economists their pride of place in the supervision or management of the economy, most of government policies will not be able to deliver durable outcomes. It is about core competence not political appointments. Many of the actions of government, no matter how well intended, will be disjointed, unconnected together without an economic blueprint. And that is exactly what we have seen so far.”
He stated that having an economic team dominated by non-economists does not augur well for proper economic planning, saying since many members of the team headed by the Vice President, Prof Yemi Osinbajo are politicians, they tend to operated within limited horizon.

Head of Department of Economics, Ekiti State University, Dr. Taiwo Owoeye who lamented the lack of economic blueprint to rescue the economy from recessiuon, stressed that the Buhari government only prepared very well to win election, but there was no preparation for governance.

“It is also obvious that they did not have a full grasp of the economic challenges facing the country and how to confront it. And this is funny; funny in the sense that as at middle of 2014, everybody knew of the southward trend of the prices of oil, declining by the day from 140 or 120 dollar per barrel to about 40 or 60 dollars, that’s a signal for the in-coming government to brace up for the challenges,” he said

He asked the government to borrow a leaf from the Olusegun Obasanjo and Goodluck Jonathan governments, which had their own economic blueprints saying government must bring on board people who have understanding of the dynamics of modern economics.

Owoeye lamented that all the government has been talking about is the intervention promises of releasing money to stimulate the economy stressing that without any policy framework, the economy as being experienced now, will continue to lack direction.

“We don’t know where we are going now because there is no compass directing our movement. The whole thing boils down to the idea of Mr. President that the economy should not run itself because of the generation he belongs to. He believes in what economists call ‘Interventionist Tendency’, that is, the government should play a major role in the economy, as against the market forces playing the major role in the economy. That is why when we had the biggest crisis of exchange rate,” he maintained

He said it is unthinkable that that the economic team of a country will be dominated by lawyers. According to him, “Vice President Yemi Osinbajo was Attorney General of Lagos State, he was not the one giving economic direction of Lagos State when he was there. Udo Udoma, who is the Minister of Budget and Planning is also a lawyer, he has sat on the board of so many corporate bodies but that does not actually substitute for a core economic knowledge. The whole idea is that for you to act effectively well at that level, you need the core knowledge, training and exposure with international organisations, and those experiences do not come cheaply.

“And with due respect to the Minister of Finance, Mrs Kemi Adeosun, though she was trained as an economist but I don’t think she has enough experience to drive that office effectively well, being a Commissioner of Finance in Ogun State is not enough and her performance in office has not proved me wrong”

Another expert, Prof Ben Naanen of the University of PortHarcout said, without a blueprint, both foreign and local investors cannot know the direction of the economy adding that this accounted for the macroeconomic mistakes made by the Buhari government since it came to power.

Chieftain of Arewa Consultative Forum (ACF) and economist, Alhaji Idris Mikati said government should as a matter of urgency decide policy framework to pursue, stressing that “ Confused economic policy would not help us. Investors would like to have clear direction and not foggy weather.

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.

Economy

Electricity Consumers Get 611,231 Meters Under MAP Scheme

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Electricity Consumers Get 611,231 Meters Under MAP Scheme

A total of 611,231 meters have been deployed as at January 31, 2021 under the Meter Asset Provider initiative since its full operation despite the COVID-19 pandemic and other extraneous factors, the Nigerian Electricity Regulatory Commission has said.

NERC disclosed this in a consultation paper on the review of the MAP Regulations.

The proposed review of the MAP scheme is coming nearly four months after the Federal Government launched a new initiative called National Mass Metering Programme aimed at distributing six million meters to consumers free of charge.

“The existence of a huge metering gap and the need to ensure successful implementation of the MYTO 2020 Service-Based Tariff resulted in the approval of the NMMP, a policy of the Federal Government anchored on the provision of long-term low interest financing to the Discos,” NERC said.

The commission had in March 2018 approved the MAP Regulations with the aim of fast-tracking the closure of the metering gap in the sector through the engagement of third-party investors (called meter asset providers) for the financing, procurement, supply, installation and maintenance of meters.

It set a target of providing meters to all customers within three years, and directed the Discos and the approved MAPs to commence the rollout of meters not later than May 1, 2019.

But in February 2020, NERC said several constraints, including changes in fiscal policy and the limited availability of long-term funding, had led to limited success in meter rollout.

NERC, in the consultation paper, highlighted three proposed options for metering implementation going forward.

The first option is to allow the implementation of both the NMMP and MAP metering frameworks to run concurrently; the second is to continue with the current MAP framework with meters procured under the NMMP supplied only through MAPs (by being off-takers from the local manufacturers/assemblers).

The third option is to wind down the MAP framework and allow the Discos to procure meters directly from local manufacturers/assemblers (or as procured by the World Bank), and enter into new contracts for the installation and maintenance of such meters.

“Customers who choose not to wait to receive meters based on the deployment schedule of the NMMP shall continue to have the option of making upfront payments for meters which will be installed within a maximum period of 10 working days,” NERC said.

The regulator said such customers would be refunded by the Discos through energy credits, adding that there would be no option for meter acquisition through the payment of a monthly meter service charge.

“Where meters have already been deployed under the meter service charge option, Discos shall make one-off repayment to affected customers and associated MAPs. Such meters shall be recognised in the rate base of the Discos,” it added.

NERC urged stakeholders to provide comments, objections, and representations on the proposed amendments within 21 days of the publication of the consultation paper.

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Economy

Nigeria’s Economy Moving in Right Direction but Slow – Amina Mohammed

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Nigeria’s Economy Moving in Right Direction but Slow – Amina Mohammed

Nigeria is moving in the right direction economically but its movement is not fast, the United Nations stated on Thursday.

Deputy Secretary-General of the United Nations, Amina Mohammed, said this during a meeting at the headquarters of the Federal Ministry of Industry, Trade and Investment in Abuja.

She said the challenges in Nigeria were huge, its population large but described the country’s economy as great with lots of opportunities.

The UN scribe stated that after traveling by train and through various roads in the Northern parts of Nigeria, she discovered that the roads were motorable, although there were ongoing repairs on some of them.

Mohammed said, “This is a country that is diverse in nature, ethnicity, religious backgrounds and opportunities. But these are its strengths, not weaknesses.

“And I think the narrative for Nigeria has to change to one that is very much the reality.”

Speaking on her trips across parts of Nigeria, she said, “What I saw along the way is really a country that is growing, that is moving in the right direction economically. Is it fast enough? No. Is it in the right direction? Yes it is.

“And the challenges still remain with security, our social cohesion and social contract between government and the people. But I know that people are working on these issues.”

She said the UN recognised the reforms in Nigeria and other nations, adding that the common global agenda was the Sustainable Development Goals.

Mohammad commended Nigeria’s quick response to the COVID-19 pandemic, as she expressed hope that the arrival of vaccines would be the beginning of the end of COVID-19.

On his part, the Minister of Industry, Trade and Investment, Adeniyi Adebayo, told his guest that the Federal Government was working hard to make Nigeria the entrepreneurial hub of Africa.

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Economy

N10.7tn Spent on Fuel Subsidy in 10 Years – MOMAN

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N10.7tn Spent on Fuel Subsidy in 10 Years – MOMAN

Nigeria spent a total of N10.7tn on fuel subsidy in the last 10 years, the Chairman, Major Oil Marketers Association of Nigeria, Mr Adetunji Oyebanji, has said.

Oyebanji, who was the guest speaker at the 18th Aret Adams Lecture on Thursday, said N750bn was spent on subsidy in 2019.

He highlighted the need for a transition to a market-driven environment through policy-backed legislative and commercial frameworks, enabling the sustainability of the downstream petroleum sector.

“Total deregulation is more than just the removal of price subsidies; it is aimed at improving business operations, increasing the investments in the oil and gas sector value chain, resulting in the growth in the nation’s downstream petroleum sector as a whole,” he said.

The managing director of 11 Plc (formerly Mobil Oil Nigeria Plc) said steps had been taken, “but larger and faster leaps are now required.”

According to him, deregulation requires the creation of a competitive market environment, and will guarantee the supply of products at commercial and market prices.

“It requires unrestricted and profitable investments in infrastructure, earning reasonable returns to investors. It requires a strong regulator to enable transparency and fair competition among players, and not to regulate prices,” Oyebanji said.

He noted that MOMAN had recently called for a national debate by stakeholders to share pragmatic and realistic initiatives to ease the impact of the subsidy removal on society – especially on the most vulnerable.

He said, “A shift from crude oil production to crude oil full value realisation through deliberate investment in domestic refining and refined products distribution, creates the opportunity to transform the dynamics of the downstream sector from one of ‘net importer’ to one of ‘net exporter’, spurring the growth of the Nigerian economy.

“Effective reforms and regulations are key drivers for the growth within the refining sector. Non-functional refineries cost Nigeria over $13bn in 2019. If the NNPC refineries were operating at optimal capacity, Nigeria would have imported only 40 per cent of what it consumed in 2019.”

Full deregulation of the downstream sector remains the most glaring boost to potential investors in this space, according to Oyebanji.

He said, “As crude oil prices will fluctuate depending on the prevailing exchange rates, it will be astute to trade in naira to avoid inevitable price swings.

“There needs to be a balance between ensuring the sustainable growth of the crude oil value chain (upstream through downstream) and providing value for the Nigerian consumer and the Nigerian economy.”

He said the philosophy should be for the government to put the legislative and commercial framework in place and let the market develop by itself.

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