Nigeria Content Online

Some Nigerian
businesses that took part in the just concluded World Economic Forum
(WEF) in Cape Town, South Africa, have proffered suggestions they hope
would help facilitate inclusive economic growth, not only in Nigeria,
but throughout Africa.

Group chief
executive, Oando Group, Wale Tinubu, who featured as one of the
co-chairs at the three-day forum, called for the removal of all
artificial trade barriers in the way of businesses in Africa, while the
group deputy managing director, BGL Plc, Chibundu Edozie, sees the
expansion of the scope of businesses beyond the Nigerian market as the
way to build inclusive economic growth in the continent.

Strong African strategy

Mr Edozie said
Nigerians should abandon the fixation with the size of the Nigerian
market and focus attention on the entire continent, in view of the
increasing global interest in Africa’s potentials.

“As against the
Nigerian market of about 150 million people, the African market is a
billion people, with an already existing catchment of trades and
products. Though Nigeria should remain the core focus of their business
operations, Nigerians should start looking at very strong African
strategy, considering that the market is largely African, with the
world beginning to wake up to the reality of the need for Africa’s
economic integration,” he said.

Mr Tinubu, who was
invited to by the organizers to showcase the potentials of homegrown
companies that do business to world class standards and are identified
as emerging regional champions, said removal of all artificial
bottlenecks by governments to trade facilitation in the continent is
the fastest way to achieve economic integration in the continent.

He listed those
bottlenecks to include imposition of visa restrictions to citizens of
Africa; closure of national borders between countries in Africa, and
dearth of infrastructure, like roads and rail lines for easy movement
of persons and goods as well as protectionist policies by governments
barring African companies from doing businesses in other African states.

Inclusive economic growth

“The issue of
inclusive economic growth is all about regional integration. But, there
is the urgent need to open up the borders between countries in Africa
to facilitate movement of goods and services. If Africa is to create
one big market for goods and services, people have got to be able to
move around,” he said.

“There is also the
need for the rehabilitation of the infrastructure, like roads and
railway systems, to link the countries of Africa, to ensure easy
movement of persons and goods for business. One cannot create a global
market by erecting artificial barriers.”

While commending
the common passport by the Economic Community of West African States as
a big step in the right direction to achieve regional economic
integration, Mr Tinubu said governments in the region should move
quickly to consolidate on the gains of that policy by establishing a
common currency regime.

On the home front,
the Oando boss urged government to create a path for the growth of the
downstream sector of the country’s petroleum industry, by allowing full
deregulation policy, pointing out the plan to spend about $6 billion
this year on petroleum products subsidies will continue to hurt the
economy, as it will amount to merely managing the symptoms of the decay
in the economy, rather proffer concrete solutions.

Subsidy removal

“If $6 billion to
be used in petroleum subsidy is saved for one year, the country can
build a mass transit railway system that would help solve the
transportation problem of the country, which will serve the people for
a lifetime,” he noted.

Though he
acknowledged that the decision to quickly remove the subsidy would
create shock among consumers, Mr Tinubu suggested a two to three-year
plan by government, that can outline the achievement of demonstrable
capital-intensive infrastructure that Nigerians can identify with,
using the savings from the withdrawal of petroleum subsidy.

He identified Oando as a growth business that is continually
exploring new ways to satisfy the need of the economy, adding that the
company’s growth is driven by the demand for its services and products
in the different sectors of the economy, which is not going to be
satisfied by multinationals.

The
ambitious target to be among the top 20 economies by the year 2020 may
be farfetched after all, as Nigeria’s current growth trajectory does
not support such climb. World Bank country director for Nigeria, Onno
Ruhl, said Nigeria’s current gross domestic product growth of around
seven percent is not enough to achieve that feat.

“Vision
2020 is not about if it can be achieved by 2020, because any economist
will tell you at this point that would take you about 15 percent growth
every year and that has not happened in the history of mankind anyway.”

Do things differently

He
said instead of striving to be among the top 20 economies within the
time frame, the country should begin to do things differently in order
to grow the economy. “The point is, Nigeria should be among the 20
largest economies. Whether it is 2023 or 2024, it doesn’t matter. What
matters is that Nigeria should be ambitious and not accept second best.
Nigeria should aspire to be the best in everything it does on the
continent. That is the destiny of the largest country on the continent
as far as I can see.”

The
federal government in 2008, launched the Vision 2020 with a mandate
that “by 2020, Nigeria will be one of the 20 largest economies in the
world, able to consolidate its leadership role in Africa and establish
itself as a significant player in the global economic and political
arena.”

Implementing plans and visions

Mr
Ruhl said rather than discussing why Nigeria has not succeeded, the
emphasis should be on what the country needs to do in order to be where
it belongs.

“The
best example is China which achieved ten percent growth consistently
for 30 years. There is no reason Nigeria cannot achieve that and if it
does, it would be a different country very quickly and a much better
country by the year 2020.”

He
said the major challenge facing the country was implementing the plans
and visions that have been drawn over the years. “There is nobody that
does not know how to solve the power problems in Nigeria. It is not
rocket science. The issue is how we are going to do what needs to be
done.”

The
major focus of implementation of the vision include agriculture and
food security, business environment and competitiveness, corporate
governance, culture, tourism and national re-orientation, education,
employment, energy, health, housing, human development, information and
communications technology, judiciary and the rule of law and
manufacturing, among other.

Mr Ruhl said within the next few years, Nigeria will grow to be the
largest economy in Africa and must begin to position for that role.

A total of N133.11
billion has been disbursed under the N200 billion Commercial
Agriculture Credit Scheme as at April, 2010 to 139 beneficiaries across
the country. The beneficiaries include 115 individuals/private
promoters and 24 state governments. The federal government in 2009
launched the scheme to intervene in the agriculture sector which
currently contributes over 40 per cent to the country’s gross domestic
product (GDP).

Under the scheme,
which is funded from the proceeds of the N200 billion bond raised by
the Debt Management Office, participating banks can access for onward
lending to their customers while state governments and Abuja could also
borrow for on-lending to farmers in their domain.

The participating
states have accessed N1 billion each for lending to farmers. According
to data posted on the website of the Central Bank of Nigeria, the
states are Adamawa, Anambra, Bauchi, Enugu, Gombe, Kebbi, Kogi, Imo,
Kwara, Nasarawa, Niger, Ondo, Sokoto, Taraba Zamfara, Akwa Ibom,
Rivers, Plateau, Edo, Kano, Benue, Bayelsa, Ogun and the Federal
Capital Territory – Abuja.

The funds are
disbursed through participating banks. The 13 banks participating in
the scheme are Access Bank, Fidelity Bank, First Bank, Guaranty Trust
Bank, Oceanic Bank, Skye, Stanbic IBTC, Union Bank, UBA, Unity Bank and
Zenith Bank. UBA has made the highest disbursement of N37.46 billion to
36 projects followed by Union Bank with N16.15 billion to 18 projects.
Zenith bank disbursed N13.84 billion to 10 projects while First Bank
disbursed N11.92 to 29 projects.

The Central Bank
stated that for failure to abide by guidelines, the regulator withdrew
fund from five banks with respect to 22 projects. The banks are UBA
N12.053 billion, Guarantee Trust Bank N581 million, Skye Bank N2
billion, First Bank N1.6 billion and Union Bank N2.166 billion.

Fast track development

The scheme was
meant to provide cheap funds to fast track development of the
agricultural sector, enhance national food security by increasing food
supply, reduce the cost of credit in agricultural production and
generate employment in the sector.

According to the
Central Bank, the key agricultural commodities to be covered under the
scheme are cultivation of target crops (rice, cassava, cotton, oil
palm, wheat, rubber, sugar cane, fruits and vegetable), Livestock
(dairy, poultry, and piggery), and fisheries.

Agriculture potential

The Managing
director of the World Bank, Ngozi Okonjo-Iweala stated recently that
African countries need to improve on agriculture potentials in order to
boost its growth trajectory and reduce poverty. “I think African
countries really have to sustain their efforts to use agriculture funds
to ensure food security,” she said.

According to her,
Nigeria needs “to think of agriculture in a modern way,” since,
according to her, it is a sector that can provide so much employment.

I readily confess
to a fascination with the “theory of unintended consequences”. But, a
small clarification before anything further is written. My interest is
not in the certainty that everything that may go wrong about a policy
choice/decision is bound to. Confronted by almost six decades of inept
and often cynical management of this economy, it is to be expected that
we have come to associate “unintended consequences” with “negative
outcomes”.

In truth, put this
way, my central narrative is but a variant of Murphy’s Law. Instead, my
enthralment is with the benefits, losses, or wrong signals arising from
a particular action, but which were not conceived of in or intended as
part of the original action plan.

Newspaper headlines
on workers’ day, May 1, were all of one flavour. In their addresses to
the different labour rallies, state governors all pledged to implement
the new minimum wage. Not too long ago, the same persons had argued
that their state government budgets could not bear the extra financial
burden from paying the new minimum wage. What had changed since then? I
could think of only one proximate explanation: the events of late
April, this year.

On balance, the
last polls in the country appear to have moved the social engagement
envelope several notches up. The “voice” of the people was heard loud
and clear, amidst the din of many a strong man’s battered ego. That was
the intended consequence of the clamour over the years for a democracy
in which every vote is counted, and every vote counts.

To the extent that
it acts as counter-weight to the dominant culture of impunity that has
come to define our polity, a representative democracy ought to improve
both the collective capacity to choose, and the different cabinet’s
will to execute.

Perverse results

However, to the
extent that politicians interpret “re-election” as the main challenge
of a democracy, then even the best voting process could have perverse
results. One such result is the rise of populist politics. Because the
masses may now have the power of the vote, what is to stop unscrupulous
politicians from pandering to its basest instincts? To take but a few
examples, a thin line separates the need for higher taxes on the
affluent in aid of society’s redistribution responsibilities from a
restraint on commerce as part of an ill-advised process of
democratising poverty; a no less blurred space sits between the need to
protect employment for locals and xenophobia.

A less than honest
treatment of the policy choices at the heart of these two examples
could lead politicians in a race to the bottom of the dump yard; more
so in a democracy where people have only just begun to savour the power
that rightfully belongs to them. Our best bet is a lot more conviction
at the top. For leadership is not solely about bending resources and
capacity to the discharge of the popular will. It is more about shaping
the choice space. Agreeing a desired destination, and selling this to
the electorate. It is, in this very narrow sense, a question ultimately
of shaping the popular will. Of leading it down paths where only
visionaries have travelled previously.

Again as between a
visionary leader and a demagogue, the thinnest of lines demarcate. So
we arrive at the point where we must agree that even under the best of
representative democracies, the threat of continued misrule in this
country does not evaporate overnight. This danger is heightened by the
prevalent low levels of education in the country, both of the classroom
variety, and of the civic one, which can only come from a long thriving
civil society.

In the absence of such a society, then, our hopes for a better
tomorrow, in the short-term, at least still depend on the quality of
leadership we get. In the absence of a functioning democracy, a
benevolent caudillo almost became a popular fancy. One, who,
understanding the need for progress along modern lines, a la Singapore
and Malaysia, rammed that vision through society. Once we change the
rules of the game through trying to run elections properly, we deny
this possibility. Instead, the new need is for conviction politicians,
prepared to argue their corner as strenuously as the most modern
constitution permits, while eschewing popular lines.

The oil-producing
central African state of Congo Republic inaugurated a 120 Megawatt
Chinese-funded hydroelectric power station late on Saturday aimed at
bridging the gap in its energy needs. The $377 million Imboulou plant
150 km (90 miles) north of the capital Brazzaville is 85 per
cent-funded with soft loans by China and was built by China National
Machinery & Equipment Import & Export Corporation (CMEC). Terms
of the financing have not been released.

Energy Minister Bruno Jean Richard Itoua said the plant, which is
due to produce 876 million kilowatt-hours a year, would allow Congo
Republic to wean itself off energy imports from its larger neighbour,
the Democratic Republic of Congo.

Royal Dutch Shell,
France’s Total and Eni sold a 45 per cent stake in a Nigerian oil block
to a Polish-Nigerian consortium, Kulczyk Oil, a partner in the
consortium, said late on on Friday. The price paid by the consortium
consisting of Kulczyk Oil and Nigeria’s Nest Oil, Aries and VP Global,
was not disclosed, but a source on Thursday told Reuters the deal was
worth $600 million. Kulczyk Oil said in a statement it has acquired 9
per cent of the OML 42 block, a stake which could produce 11.5 million
to 46.4 million barrels of oil equivalent. “Kulczyk Oil believes these
estimates are cautious because they do not take into account
significant volumes of gas,” the statement said.

The transaction is
subject to a number of approvals, including permission from Nigerian
National Petroleum Corporation, which owns the remaining 55 per cent of
the block.

The All Farmers Association of Nigeria, Delta Chapter, has urged the
state government to consider farmers in the disbursement of the N50
billion bond recently approved for it. Jerry Ossai, the chapter
Chairman, made the call in an interview with the News Agency of Nigeria
in Asaba. He said that with adequate support to farmers, the “Delta
without oil initiative” would be realised. Mr Ossai, who said funding
had remained the bane of agricultural development in the state, pointed
out that farmers had found it difficult to access any of the sector’s
intervention funds. “I will advise the government to put some good
money from the N50 billion bonds just approved for the state into
agriculture,” he said. Mr Ossai, a former Commissioner for Agriculture
in the state, said only one farmer in the state had been able to access
funds from the federal government’s agriculture intervention scheme.

Barclays Plc plans to move its Africa headquarters in Dubai back to
Johannesburg, a spokesman for the bank said on Sunday, leaving more
than 120 employees with the option of relocating or quitting the bank.
The British lender mainly runs back office functions for its Africa
operations out of its Dubai base. A source said employees had been
informed of the plan and their options. Sami Lahoud, head of corporate
affairs at Barclay’s Africa, said 123 employees affected by the move
will have until the end of the year to decide. “These are individual
decisions based on peoples circumstances and preferences,” Lahoud
added. “The majority of senior positions will move to Johannesburg. “By
the 1st of January 2012, we will be operating out of Johannesburg.”

Rwandan President
Paul Kagame appointed the country’s central bank governor as minister
for trade and industry in his first reshuffle since being re-elected
with 93 per cent of the vote last year. Francois Kanimba, a former
World Bank senior economist who had been governor of the National Bank
of Rwanda since 2002, was replaced by his deputy Claver Gatete. Mr
Kagame, who has a firm grip on power in the central African country,
gave no reason for the reshuffle announced late on Friday. It had been
expected, however, because two ministerial posts recently became vacant.

Mr Kagame, who has been credited with rebuilding the country since
his rebel army swept to power and ended a 1994 genocide, last rejigged
his cabinet in December 2009.

The

World Bank has said it is prepared to provide support to any foreign

investor interested in Nigeria’s power sector. Onno Ruhl, World Bank

country director for Nigeria said the Bretton Woods institution

realises that the power sector is critical to the future of the

economy.

“We will do what we can to give comfort to investors who have the courage to come to invest in the sector in Nigeria,” he said.

According to him, private participation in the power sector was critical in order to see improvement.

“We

will focus on power generation effort and will also focus on getting

private participation in distribution companies especially key

distribution companies that have short term viability in their

horizon.”

He

said key distribution centres include Ikeja and Abuja distribution

centres. According to him, the major issue with Nigeria is the

implementation of the plans that have been drawn up over the years.

Speaking yesterday in Lagos at the bi-monthly breakfast meeting of the

Nigeria British Chamber of Commerce, the World Bank official said it

would be erroneous to think that solving the power problem would

translate to solving other issues in the country.

“It

is government’s business to make it easy for people to do business.

Should the government be more concerned about the power sector or

should it be concerned about social inclusion which is indeed very

important, the power sector is the simplest story as far as I am

concerned.”

Frightening statistics

Reeling

out statistics, he said the Nigeria has over 100 million people under

30 years of age which is more than the entire population of Libya,

Egypt and Tunisia combined. “Nigeria has 75 million people under 20.

Nigeria has 46 percent unemployment between 16 to 24 years of age.

Every year, 800,000 Nigerians pass their JAMB exams and do not get

admission into the university because there is no space for them.” He

said government has to find ways of including these people in the

economic space or they could be sources of social disorder in the years

ahead. He cited the Brazilian example where the government dedicated

about one percent of the country’s gross domestic product to cater for

the bottom 20 percent of the population. He said procedures at the

country’s ports need to be overhauled in order to make it easier for

goods to be cleared at the point of entry. According to him, the

country would achieve more progress by improving the business climate

than it would in the power sector which would take several years to

accomplish.

Improving business climate

“You

can achieve more in the short term by making the business climate

better than in power because power will still take time. Improving the

business climate would have more impact on job creation. We need

government with political guts to do this,” he said.

On the future prospects of Nigeria, he said the country can get it

right if the implementation strategy is well thought out. “Nigeria is a

country with enormous potentials not because it has oil but because of

it has a good balance sheet, because it has a large market which cannot

be ignored and because it has more money in its pocket more than

before,” he said.