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African immigrants sent home over $40 billion (N6 trillion) in
remittances last year, according to a new joint report by the World Bank and
African Development Bank. This figure is down from $41 billion in 2008 and just
over US$38 million in 2009, according to a similar report last year.

The report which cover remittances from OECD ( Organisation for
Economic Co-operation and Development comprising Eastern and Western Europe,
advanced Asian and South American economies) countries and transfers from other
African countries such as South Africa, also shows the pattern of disbursement
of these transfer of funds. “Data from household surveys reveal that households
receiving international remittances from OECD countries have been making
productive investments in land, housing, businesses, farm improvements,
agricultural equipment, and so on.” It added that many migrants transfer funds
to households in origin countries for the purpose of investment. Thirty six
percent in Burkina Faso, 55 percent in Kenya, 57 percent in Nigeria, 15 percent
in Senegal, and 20 percent in Uganda.

Investing significantly

According to the report, “households receiving transfers from
other African countries are also investing a significant share in business
activities, housing, and other investments in Kenya (47 percent), Nigeria (40
percent), Uganda (19.3 percent), and Burkina Faso (19.0 percent).” Education
was the second-highest use of remittances from outside Africa into Nigeria and
Uganda, the third highest into Burkina Faso, and the fourth highest into Kenya.

The report titled, ‘Leveraging Migration for Africa:
Remittances, Skills, and Investments’ added that the annual estimated saving,
usually held in foreign countries, by Africans exceeds $50 billion. “African
governments need to strengthen ties between Diaspora and home countries,
protect migrants, and expand competition in remittance markets,” said Dilip
Ratha, main author of the report and lead economist at the World Bank.
“Otherwise, the potential of migration for Africa remains largely untapped.”
The World Bank said African countries should begin to consider issuing Diaspora
bonds, which are sold by governments or private companies to nationals living
abroad, a concept that has been utilised in tapping into assets of Israeli and
Indian citizens living abroad.

The report estimates that Nigerian emigrants save about $3.5
billion annually, as at 2009, a figure which represents about 2 per cent of the
country’s gross domestic product. “Most of these savings are invested in the
host countries of the Diaspora. It is plausible that a fraction of these
savings could be attracted as investment in Africa if African countries
designed proper instruments and incentives,” the report added.

Diaspora bonds

According to Ratha¸ Sub-Saharan African countries can
potentially raise $5-$10 billion a year in Diaspora bonds. Countries with large
diasporas in high-income countries that can potentially issue its bonds include
Ethiopia, Ghana, Kenya, Liberia, Nigeria, Senegal, Uganda, and Zambia in
Sub-Saharan Africa and Egypt, Morocco, and Tunisia in North Africa.

“Diaspora bonds can be sold globally through national and
international banks and money transfer companies. They can be marketed through
churches, community groups, ethnic newspapers, stores, and hometown
associations in countries and cities where large numbers of migrants reside.”
Ronan McCaughey of the Laferty Group, a United Kingdom-based financial research
and advisory services firm, said remittances are important determinants of
growth in West African countries. ‘‘Especially in construction and real estate,
and are a major source of household income and financing,” he said in an email
response.

In this interview, the director general of the National Office
for Technology Acquisition and Promotion (NOTAP), says billions of naira are
spent annually not only on imports but also on technology transfer agreements,
adding that indigenous technologies can be veritable job creation tools.
Excerpts:

Educational institutions
should give Nigeria better technologies

No country that is modern, productive and has got visibility
that is not strong in science and technology. Nigeria cannot be different. All
the classification you have like first world, second, third world countries or
least developing countries is actually geared on the energy of science and
technology. Poor countries are those that cannot utilise their mental capacity
to take advantage of the opportunities available to them.

In our hospitals most medicines are imported, the equipment are
imported; in the banking sector most of our software is foreign software from
Oracle, Microsoft, Finacle and based on the work of others. Also if you look at
our industries, nearly one hundred per cent of the facilities, the machinery,
the know-how, the processes are all based on foreign technology. Therefore, it
is important for us to ensure that internally too, we domesticate these things.

We have the knowledge
infrastructure

Nigeria has a lot of universities, about 104 universities, 125
polytechnics and 500 research, development and implementation institutions at
federal government level, alone with over 100 colleges of education, yet we do
not have the technological capacity to drive our industries. We are not able to
feed our country with our own rice. We have land; we have water but do not have
the technology to produce our own rice. Even if we have, we are not using the
skill and know-how we need to look at our own herbs medicinal roots and process
it to drugs is what we do not have. So this office (NOTAP) is the one that
looks at all these.

If you open your gate as a country for people to bring in their
technology, money and know-how to come and make more money in your country and
depart, you are not doing well. What you should do is to use a magnate to
capture their technology and managerial know how and be made better. The
graduates from our institutions are those magnates, but if the magnates are bad
what can we do? So the education system has to push it. By now it should be Nigerians
exploring our oil, designing our refineries. By now we should not allow one
drop of crude to leave; let us refine them in this country. That is where the
jobs are but we are not taking this opportunity. NOTAP tries to reduce the gap
between our industries and our knowledge system. As we speak now, the gap is
too wide. Industry is looking at a different direction; hardly will you go to
our industries and see they are employing PhD holders. Here we are on the
consuming mode, consuming the research and output of other people. We have to
reverse.

NOTAP-Industry Research
Fund

NOTAP has this year made it absolutely clear to industries that
every industry operating in Nigeria, local, multinational, enterprises having a
fair amount of shareholding by foreigners must also have the interest of
Nigeria technologically. And therefore, I am happy to report to you that after
the conference we had in Lagos with manufacturing industries, we have decided
to establish NOTAP-Industry research fund. This is fund whereby industries will
now contribute money into so that we can use it to train PhDs. We believe that
is the innovative population that we need: practical, highly skilled manpower
for Nigeria, so that we too can start looking at technology we require to move
our country forward.

I have gotten commitment of about N200 million. With this we can
train more than 400 PhD holders. We are targeting first class honours that will
research in areas that are important to industries. Contributions have started coming
gradually. Secondly, for every manufacturing company that we are working with,
we have also an attempt to narrow the gap between the industry and the academia
and launched what we called Industry Educational Technology Programme. One of
the things we would do on this is to go to an industry, understudy what they do
and then produce a process graphics.

For example, we all eat Maggi from Nestle but do not know what
it is made of. The major ingredient for Maggi is soya beans. Our children know
soya beans, on the other side they see Maggi but do not know the link so we
told Nestle (Maggi producers) to give us the process pictorially from cleaning
the soya beans using machines, to formation, drying, grinding, mixing and
wrapping. These pictures are taken to primary schools and we will use them to
educate our children. The same we did with Nido. Children cannot connect cow
with Nido. We are doing the same with cement companies, the plastics,
Friesland, all the branded companies in Nigeria, we have requested the
companies to produce them for us. We will produce one million copies of each
and distribute to our primary and secondary schools free of charge. We make
sure that we train the teachers, so that we can now breed them from the bottom
that science is the way to go. We want to see kids in primary school say I want
to be a rich man because I can produce Maggi. I know how it is being done.

Technology transfer
agreement costs

Based on our registration process for these technology transfer
agreement, we have saved this country N25bn in ten years. There are some
companies that will come and would want to operate in Nigeria and take hard
currency for technology in a very shoddy manner. Sometimes the technologies are
not that costly but they are charging Nigeria high, so in this office we cut
it. There are some technologies that are old that we are not even supposed to
pay for and when we see it in the agreement, we cancel those agreement. Through
this process of reduction and cancellation, in the last ten years alone we have
saved this country billions, monies that would have left Nigeria to pay for
technologies we don’t even need. We are continuing on refining this process,
that we can only pay for technology that we require and we can gradually ensure
that as Nigerian engineers become better, this agreement will be less because I
can tell you that by law, any job that can be done by Nigerian is not supposed
to be done by anybody coming from outside.

From our record Nigeria has also spent over N300bn on technology
transfer agreement fees in the past 10 years also. This is primarily on
consultancy and software transferred to Nigeria. We are trying to digitise the
whole process so that at the punch of a button I can tell you not just what has
been remitted and how much but only sector by sector.

The economic plans of the presidential candidate of the All
Nigeria Peoples Party (ANPP), Ibrahim Shekarau, for Nigeria, as stated in the
party’s manifesto, are clear and developmental initiatives, but while some
finance analysts believe that those plans are achievable, others say they are
unrealistic and are mere campaign proposals.

According to ANPP’s manifesto, Mr. Shekarau, who is the current
governor of Kano State, will provide for Nigerians social and infrastructural
development through “good and well-managed economic policy” which will lead to
a developed society.

The ANPP said it will manage with enhanced transparency the
foreign exchange earning potentials such as petroleum, solid minerals and other
capital yielding products in other sectors, adding that commercialisation and
privatisation of mining operations will be encouraged while joint venture
arrangements between local and foreign investors will be vigorously pursued.
“Proper economic management includes giving priority attention to economic
resources development, diversification and protection,” it said.

Akinbade Ibisiola, a finance analyst at Resource Cap Company, a
fund management firm, said although he really did not know much about Mr.
Shekarau before the recent debate in which the candidate participated, “but he
won my heart that day. He spoke confidently and eloquently on his plans and
appeared like a man of his words who is prepared to rule this country with some
level of knowledge of the system. I think, if given a chance, he can give the
kind of leadership Nigeria needs and improve on the sorry-state of the
economy.”

Meanwhile, David Amaechi, a market analyst and an executive
member of the Shareholders Association of Nigeria, said Mr. Shekarau’s plans
for the economy is not “convincing.” He added that “With the current state of
development in Kano, the state he (Mr. Shekarau) led since 2003, it is obvious
that he has little to offer Nigeria as a whole. You cannot compare what is
happening in states like Lagos and Cross River with Kano in terms of
development,” he said.

However, Magret Asinobi, a jewellery dealer, who travels to Kano
occasionally for businesses, said Mr. Shekarau has done a lot for the people of
the state as against what some people believe. “He has really tried to reduce
poverty there and made going to school attractive for his people; may be
because he was once a teacher,” Ms. Asinobi said, adding that Mr. Shekarau has
also improved the level of social reorientation and security in Kano.

Energy sector

In the mean time, the ANPP said the chaotic state of the energy
sector has forced the national economic growth into a state of inertia thereby
stalling productivity and creating an unprecedented state of unemployment. The
party believes that the development of the industrial sector is the only answer
to the high cost of essential goods even in areas of food, medicine and
textile. “Conscious that a functional energy sector is the foundation of
sustainable development of our economy, ANPP in government would prioritise and
pursue a very aggressive result-oriented energy policy with a view to improving
upon the current state of electricity supply within six months of inception,
and achieving at least seventy-five percent steady power supply within two
years of inception,” the party said.

The ANPP also said it will wage a total war on corruption and
indiscipline through internal scrutiny of elected and appointed political
officers in order to lead by example. It added that it will also launch a war
against hunger and close monitoring of the application of Agricultural credits
and subsidies. The party, however, failed to give strategies on how it intend
to achieve housing issues as it only said it “will strive to provide a housing
policy that is common man friendly.” Beyond these promises, analysts say Mr.
Shekarau and his party have not adequately provided enough facts and figures as
to how to achieve the goals stated in the manifesto.

TOMORROW: Jonathan’s
economic agenda

The Central Bank of Nigeria, yesterday, said it is closer to
achieving its target ratio of less than 5 percent of nonperforming loans in the
country’s financial sector, with the successful acquisition of all bad debts of
the 21 banks by the Asset Management Company of Nigeria.

The bank’s deputy governor, Banking Supervision, Sam Oni, told
journalists at the end of the 302nd meeting of the Bankers’ Committee in Abuja
that “the purchase of all nonperforming loans of all the banks has effectively
restructured the balance sheets of all the banks, making them healthy and
competitive.” “The quality of the banks’ balance sheets is very high,” he said.

“Our target is to ensure that by the time the second round of
the exercise is completed, the nonperforming loans ratio in the country’s
financial sector should not exceed five percent. The CBN is encouraging banks
to fully charge off all those nonperforming loans that have been fully
provisioned to make their balance sheets very healthy and competitive. This is
a good development to further de-risk the financial system, make it stable and
ensure that the confidence that has been restored is sustained, to propel the
industry to greater heights.”

During the first round of the purchase, the asset company
restricted its attention to margin lending by the intervening banks from where
acquired over N1.036 trillion bad debts. However, in the second phase of the
exercise, the company issued additional N500 billion (about $3.3 billion) in
zero-coupon bonds to clear up the remaining bad debts by March 31.

The committee, which also reviewed progress by the various
interventions programmes by the Central Bank to strengthen the economy,
indicated that the percentage contribution, in terms of loans to the
agricultural sector to total industry loans, has doubled from 1 percent to more
than 2 percent in recent times. This was attributed to the commitment
demonstrated by all the banks to be more supportive to the growth of the real
sector, through the establishment of an agriculture desk to handle agricultural
loans in line with an action plan established two years ago for economic
development.

The criticisms

Two years ago, the banks came under serious criticisms that they
were not doing enough to support the real sector, particularly those critical
to the growth of the economy, particularly agriculture, transport, aviation,
railway, power as well as small and medium enterprises. Managing Director,
First City Monument Bank, Ladi Balogun, said that the industry would witness
rapid growth in banks’ participation in lending to the agricultural sector once
the central bank commences the Nigerian Incentive-based Risks Sharing System
for agricultural lending in the country.

Mr Balogun said several key projects have taken off in the power, and
transport sector as well as the SMEs through the various intervention funds
channelled through the Bank of Industry, in line with the objective of the
banking sector to support the real sector and ensure that those critical to the
growth of the economy received adequate funding. On the industry shared service
projects, indications were that significant progress in the various areas,
including industry-wide cash handling and electronic banking services as well
as IT standardization system by encouraging more of electronic banking, to
facilitate greater efficiency and help manage costs as well as reduce the use
of cash in transactions.