The Nation . 25 March 2013.
Dr. Ifediora Ameobi, a policy economist, is the Executive Director of the African Institute for Applied Economics (AIAE). He was Senior Special Assistant to the Vice President on National Development Matters between 2007 and 2011. In this interview with TOBA AGBOOLA, Ameobi seeks the governments’ support for the Organised Private Sector (OPS), which he describes as the engine of growth. He speaks on job creation, domestic debts and diversification of the economy.
The Guardian. Sunday 02 December 2012. Written by: Roseline Okere
UNDAUNTED by their inability to allegedly scuttle the Petroleum Industry Bill (PIB) or distort it in their favour, foreign oil companies have resorted to covert strategies to undercut the Federal Government.
The Guardian learnt at the weekend that the reported rash of divestments in the oil and gas sector recently was a way of foreign oil companies fighting back at the PIB.
Experts said that the decision of some International Oil Companies (IOCs) to divest their equities in the sector may not be unconnected with a bid to escape maturing onshore liabilities coupled with what they consider as an unfavourable profit-sharing agreement in the PIB.
Click here to read more
Nigerian Tribune, 03 December, 2012 written by: Sola Oluwadare
THE ongoing constitutional review process with res pect to state creation should make us put on our thinking caps and examine the functionality of state government in the present political structure before we talk about creating additional ones.
For instance, in the current political dispensation, we have witnessed states coming out with state anthems, state logos, state flags, in fact change in arrangement of name to prove their autonomy.
Of course, some of these actions may not stand the test of time because some of them are politically motivated.
Once another party takes over, such novelty may be abandoned. Yet they use resources garnered from the Federal Government to champion these causes. Click to read more
Also read on Daily Independent
BusinessDay. Tues. 04 December 201. Written by: Sola Oluwadare
Nigeria is complex and diverse in terms of ethno-political and religious formations, but the complexity should not ordinarily result in absurdity. As a matter of fact, sentiments rather than issues have always been the overriding determinants, not only when crucial policy decisions are being made, but even in our day-to-day comments on important national discourse.
Nigerians often use different rods to measure the same issue depending on where, when, why and who is at the centre of discussion and how it affects our interests. Anybody at the helm of affairs in our country must be ready to carry loads of concerns because of the many-sided nature of Nigerians. Click here to read more
BusinessDay. Wed. 05 December 2012. Written by: Sola Oluwadare
Other state governors followed suit to lay emphasis on the need to remove the subsidy, but only the governor of Edo State, Adams Oshiomhole, had the courage to openly identify with the policy when the big stick was wielded and Nigerians protested the move.
As a fallout of the removal, the extra amount removed was allotted in percentage to the federal, state and local governments to cushion the effect of the partial removal of the subsidy. The Federal Government announced the distribution of mass transit buses to states to cushion its immediate effect. Whether this scheme was effectively implemented is an entirely different matter. Click here to read more
Click on one of the following items for more information (older articles)
Lagos — Executive Director of African Institute for Applied Economics, Dr. Ifediora Amobi has expressed concern over the Federal Government's silence on the $5.9 billion external budget in the budget proposal presented to the National Assembly last Wednesday.
He also said the Federal Government didn't tell Nigerians how it intends to reduce the burden of the debt.
Reacting to the 2013 budget proposal at the weekend, Ifediora said Federal Government was silent on specific poverty alleviation programme in 2013.
The Board of Directors, African Institute for Applied Economics, has approved the appointment of Dr. Ifediora Amobi as its new Executive Director. The appointment takes effect from August 2012, according to a statement by the institute.
Amobi holds a doctorate degree in Economics from Howard University, Washington DC, United States. He obtained a masters degree in Economics from Clemson University and graduated from the Nebraska Wesleyan University, USA, with a B.Sc. in Economics.
The statement noted that AIAE was an independent international research institute, which promoted evidence-based decision making through research, sound economic analysis, policy dialogue and private sector development activities.
The institute, according to the statement, spearheaded the Business Environment and Competitiveness across Nigerian States’ summit recently.
It said, “AIAE has contributed significantly through its research programmes and policy dialogue to different issues that affect the Nigerian economy. Today, BECANS is nationally accepted as a research-based mechanism for benchmarking, peer review and advocacy on business environment across the 36 states and Federal Capital Territory.
“AIAE BECANS is recorded as the first ever sub-national (state-level) science-based benchmarking of the business environment in Nigeria.”
The statement said Amobi was a consummate policy economist with managerial experience in the public sector, macroeconomic policy, finance and strategy consulting, noting that the new director would take over from Prof. Eric Eboh, who had served as Executive Director of the institute since 2003.
Eboh, the statement said, took over from the former Governor, Central Bank of Nigeria, Prof. Chukwuma Soludo.
Amobi, it said, had served in different capacities, including as Senior Special Assistant to the President on National Development Matters, office of the Vice President, from 2007 to 2011.
The statement said, “He was the Investment Policy Adviser for the United Kingdom Department for International Development funded programme, Growth and Employment in States and Managing Consultant/Executive Director of Skoup and Company Limited, Enugu.
“Amobi was a Strategy Manager at Accenture and a Relationship Manager at Citibank Nigeria, Lagos. Between 1986 and 1992, he served as a lecturer at Howard University, as well as an Economic Consultant in the office of the Chief Economist, South Asia Region of the World Bank in Washington, DC. In 1999, he lectured in the Department of Economics, Enugu State University of Technology’s Business School, Enugu.”
The Board of Directors of the African Institute for Applied Economics (AIAE) has approved the appointment of Dr. Ifediora Chimezie Amobi as the new Executive Director of the Institute with effect from August, 2012.
Amobi has a Doctorate Degree (Ph.D.) in Economics from Howard University, Washington, DC, United States America (USA), Masters Degree (M.Sc.) in Economics from Clemson University, Clemson, SC, USA and also Bachelor of Science (B.Sc.) degree in Economics from Nebraska Wesleyan University, Lincoln, NE, USA.
The new helmsman of AIAE is a consummate policy economist and quintessential administrator; endowed with leadership qualities and managerial experience in public sector, macroeconomic policy, finance and strategy consulting with proven ability to initiate, organize and direct substantial work and research programmes. He is taking over from Professor Eric Eboh, who has been the Executive Director of the Institute since 2003.
With over 25 years of professional experience, Dr. Amobi has served in different capacities including Senior Special Assistant to the President on National Development Matters, in the Office of the Vice President. Abuja from 2007 to 2011. He was the Investment Policy Adviser for the UK Department for International Development (DfID) funded programme, Growth and Employment in States (GEMS3) and Managing Consultant/Executive Director of Skoup and Company Limited, Enugu.
Amobi was a Strategy Manager at Accenture, and a Relationship Manager at Citibank Nigeriain Lagos. Between 1986 and 1992, he was a Lecturer at Howard University as well as an Economic Consultant in the Office of the Chief Economist, South Asia Region of the World Bank in Washington, DC, and in1999 he became a Lecturer in the Graduate School of the Department of Economics, Enugu State University of Technology Business School.
Until his appointment, Amobi was the Investment Policy Adviser with UK Department for International Development (DFID), Growth and Employment in States (GEMS3) in Abuja, Nigeria.
AIAE is an independent international research institute devoted to promoting evidence-based decision making through research, sound economic analysis, policy dialogue and private sector development activities. The Institute spearheaded the only indigenous business environment survey in Nigeria christened Business Environment and Competitiveness Across Nigerian States (BECANS), which is its flagship.
The Institute has contributed significantly through its research programmes and policy dialogue to different issues that affect the Nigerian economy. Today, BECANS is nationally accepted as a research-based mechanism for benchmarking, peer review, advocacy on business environment across the 36 States and Federal Capital Territory. AIAE BECANS is recorded as the first ever subnational (State-level) science-based benchmarking of the business environment in Nigeria.
There are three kinds of people: those that wait for things to happen to them, those who talk about things and finally that group that make things happen. These last set often than not, are imbued with leadership qualities and, wherever they may be, bring to bear their vast experience and proven ability to initiate, organize and direct substantial work and research programmes which forward-looking companies are always on the look out for.
That is the case of Dr Ifediora Chimezie Amobi, a former Senior Special Assistant to the President on National Development Matters, who has been appointed the Executive Director of the African Institute for Applied Economics (AIAE).
Amobi is taking over from Professor Eric Eboh who has been the Executive Director of the institute since 2003. Professor Eboh, during his meritorious service completely lived out the vision of the institute after taking over from the pioneering Executive Director, the former Governor of the Central Bank of Nigeria (CBN), Professor Chukwuma Soludo who was then appointed as the Chief Economic Adviser to President Olusegun Obasanjo, and later Deputy Chairman and Chief Executive Officer of National Planning Commission (NPC).
AIAE is an independent international research institute devoted to promoting evidence-based decision-making through research, sound economic analysis, policy dialogue and private sector development activities. The institute spearheaded the only indigenous business environment survey in Nigeria christened Business Environment and Competitiveness Across Nigerian States (BECANS), which is its flagship.
A statement issued by Mr Sola Oluwadare, the Communications Manager of the institute stated that the new AIAE boss is a consummate policy economist and quintessential administrator; endowed with leadership qualities and managerial experience in public sector, macroeconomic policy, finance and strategy consulting with proven ability to initiate, organize and direct substantial work and research programmes.
With over 25 years of professional experience, Dr. Amobi has served in different capacities including Senior Special Assistant to the President on National Development Matters, in the Office of the Vice President, Abuja from 2007 to 2011. He was the Investment Policy Adviser for the UK Department for International Development (DFID) funded programme, Growth and Employment in States (GEMS3) and Managing Consultant/Executive Director of Skoup and Company Limited, Enugu.
Dr. Amobi was Strategy Manager at Accenture, and a Relationship Manager at Citibank Nigeria, Lagos. Amobi, a fellow of the institute, has a Doctorate in Economics (Ph.D.) from the Howard University, Washington, DC, United States of America (USA); a Masters Degree (M.Sc.) in Economics from Clemson University, Clemson, SC, USA and also a Bachelor of Science (B.Sc.) degree in Economics from Nebraska Wesleyan University, Lincoln, NE, USA.
MIXED reactions have continued to trail plans by the Central Bank of Nigeria (CBN) to introduce N5,000 notes into circulation next year.
Experts, who bared their minds to the Nigerian Tribune were divided on the motive behind the introduction.
The Executive Director, African Institute for Applied Economics (AIAE), Dr Ifediora Amobi, described the policy as laudable, stating that printing of new higher-denomination notes under the current currency regime would be a never-ending exercise, as the CBN was responding to increases in demand for naira by printing more higher-denomination notes.
Amobi, a former Senior Special Assistant to the President on National Development Matters, posited that a more practical approach to restructuring the naira and succeeding as a “cashless” economy is for the apex bank to re-denominate the naira, noting that the move would not only further strengthen the currency, but make it a benchmark in Africa.
Citing the case of Ghana, Amobi said the re-denomination of the Cedi in 2007 had a positive impact on the credibility and portability of the currency, particularly in local trade, as well as time spent in queues and on service rate by sellers, adding, however, that its impact on general price levels had not been equally heralded.
Also, a renowned financial analyst and Chief Executive, Financial Derivative, Mr Bismarck Rewane, said the introduction of high denomination would not necessarily lead to inflationary trend.
He said the policy would have impact on the cashless policy.
Another financial analyst and don, Dr Osaro Obobaifoh, said by the policy, the apex bank was contradicting itself, stressing that it was an invitation to inflation and would make nonsense of the cashless policy.
He maintained that it would further promote corruption and money laundering in the country, noting that the economy would be at the receiving end.
On his part, an economist and Chief Operating Officer, Twinsronk Consulting, Okechkwu Amadi, said the CBN was not in tune with economic reality.
According to him, the apex bank would have fine-tuned the policy to reflect the situation on the ground, stressing that it would lead to hyper inflation.
Also reacting, a professor of International and Monetary Economics, Ademola Oyejide, on Sunday, condemned the proposed introduction by of N5,000 currency denomination into the economy, describing it as a step in the wrong direction.
Professor Oyejide, a senior lecturer in the Department of Economics, Univesity of Ibadan, in a paper made available to the Nigerian Tribune, postulated that the introduction of the new note may likely generate a number of unintended effects, including hyper-inflation, which, he said, had pushed many countries into redenomination or complete abandonment of their currency system.
“The issuance of the N5,000 currency note runs counter to the recent policy of the CBN to promote a cash-less economy, by encouraging the increased use of non-cash transaction instruments,” he said, stressing that introduction actually contradicted the policy, aimed at reducing use of cash, to cut down on cost of printing and distribution of currency notes.
Citing countries such as Argentina (1975-1991); Bolivia (1984-1987); Nicaragua Peru, Poland, Angola, Zaire, Congo Democratic Republic, Zimbabwe and Angola, the economist postulated that there was close relationship between inflation and the issuance of high-value currency note.
He averred that such scenario was not desirable given the fact that Nigeria had been experiencing “bouts of inflation for a long time and efforts to extinguish this dangerous trend have not been successful.”
The Obafemi Awolowo Institute of Government and Public Policy, Lagos, also described the plan by the CBN to introduce the N5,000 currency note as a step in the wrong direction.
In a statement issued by the institute at the weekend, following the announcement by the CBN, it noted that the objectives which the apex bank said the plan would achieve were likely to have “unintended effects or inflict collateral damage” on the economy.
The institute said the move would likely be perceived as an indication of government’s failure to effectively control inflation, citing countries like Argentina, Boliva, Poland, Nicaragua, Peru and some African countries like Angola, Democratic Republic of Congo and Zimbabwe, where such moves had pushed those countries into hyper-inflation.
The instiute said the N5,000 currency note would facilitate large cash transaction, making it easy for money-laundering and other corrupt activities, including drug-related and terrorist acts.
“The ease with which currency notes with high face value can be transported renders them as ideal instruments for these kind of undesirable activities,” the institute said.
THE Action Congress of Nigeria (ACN) also cautioned the CBN to have a rethink about its intention to introduce the N5,000 note.
In a statement issued in Lagos on Sunday by its national publicity secretary Alhaji Lai Mohammed, the party warned that while the introduction of the high denomination may serve the dual purpose of raising revenue for government on the one hand and reducing the cost of transactions on the other hand, the unintended consequences and collateral damage of introducing the N5,000 may far outweigh the benefits of the new measure .
According to the party, there was a strong historical evidence that the introduction of higher and higher face value currency notes in an economy often signifies a regime of increased and sustained fiscal deficit financing.
Secondly the party said the issuance of such high value currency notes was likely to be perceived as an indication of government’s failure to effectively control inflation, while it added that the introduction countered the recent policy of the CBN to promote a “cashless” economy.
ThisDay Newspaper, 06, Aug. 2012
The Soludo Solution By Chukwuma Charles Soludo
Wolfgang Stolper’s 1966 classic lamented that Nigeria’s First National Development Plan 1962 - 68 was an exercise in planning with limited statistics. Almost 50 years after, the concern is deepening. Several of the most important national data (if they are available and on time) are either of poor quality or downright wrong. Do you believe that Nigeria’s population is 167 million this year? Do you believe that GDP is growing at nearly 8 per cent (led by the non-oil sector) and at the same time poverty has worsened to all time high of 72 per cent in 2011? Do you believe the school enrolment figures? Does the inflation figure make sense to you? Do you believe the data on consumption, investment, etc? I am at pains to admit that I am not sure.
“If you cannot measure it, you cannot improve it.” That was the seminal conclusion of Lord Kelvin in 1883. Without timely and reliable data on social and economic conditions of a society, much of public policy becomes an exercise in shadow-boxing. Policy analysis becomes a case of garbage in, garbage out. Many commentators and policy analysts casually refer to the poor quality of our national data, but I am not sure the public and the government truly appreciate the magnitude of the crisis. When I accepted to write this column, I also decided to ensure that it is evidence-based. But not without the necessary caveat emptor with regards to my articles on Nigeria! That explains the focus of this first article.
Of course, in Nigeria everyone is a moving statistical agency. Everyone reels out his or her own statistics on anything. Some will tell you that poverty incidence is 90 per cent; 70 per cent or that unemployment is 80 per cent and all kinds of numbers are bandied around. Ask them the source of their statistics and they will be surprised that you “can’t see it”. Don’t try to get into the argument that no person, based on his limited observations, can postulate about the conditions of the entire country covering 774 local governments. The reality is that aside from some sectoral data produced by a myriad of agencies, only the former Federal Office of Statistics (FOS) and now the National Bureau of Statistics (NBS) has the national mandate and organisation to produce nationwide statistics on the social and economic conditions of the country.
Sometimes, one is embarrassed to see even officers of government reeling out unsubstantiated statistics from their heads or quoting figures from the World Bank. Quoting World Bank figures by government officials is an admission that the government does not trust its own statistics. Nothing is a more national embarrassment than seeing the National Planning Commission (which supervises the NBS) repeatedly refer to World Bank ‘estimates’ in its Vision 2020 document. The World Bank does not have the operational infrastructure to collect economy-wide primary statistics on Nigeria. It relies on national statistics produced by NBS and other government agencies plus its own ‘staff estimates’. I know that some of the World Bank figures are suspect.
In 2001, I wrote an article entitled ‘The numbers do not add up’. This highlighted the inconsistencies and contradictions in the statistics published by the Central Bank of Nigeria (CBN), the FOS and the Ministry of Finance on the Nigerian economy. In 2003, I became Chief Economic Adviser to the President and CEO of the National Planning Commission (with FOS as one of the parastatals to supervise). I faced the true reality of the pitiable state of our national statistical system. A diagnostic evaluation of the FOS revealed a systemic collapse. Less than 20 per cent of the thousands of staff had any professional qualification or experience to work in such an institution. It had no office building, grossly underfunded, and did not have the technology to function.
I believed we needed to reconstruct a new statistical agency from the scratch. We produced the “Statistical Master Plan for the Nigeria National Statistical System (2004/5-2008/9)”; renamed the FOS to the current name of NBS; set out to secure its current office building, and drew a huge agenda for total transformation including manpower recruitment and training, aiming to have at least 80 per cent of the staff as professionals. I left for the CBN a few months later and I want to believe that the reforms are still work-in-progress. From what I can see, we still have a very long way to go.
In the last few years, I have been advising institutional investors on Africa and have had to tease out information from country statistics of many African countries. My experience is that there are few African countries whose statistics are as poor as Nigeria’s. Investors keep asking me about the conflicting figures on the Nigerian economy. It is serious!
Every data is important. However, it is extremely difficult for policymakers to make or measure progress without reliable data on demography (population and its characteristics); income or GDP and its distribution; unemployment; poverty; inflation; health and educational standards. In advanced democracies, the fate of governments depends critically on the standard of living of the people measured by unemployment and poverty. In Nigeria, I guess these numbers don’t excite the public because they either do not understand or do not believe them.
We know that our population figures and school enrolment rates are tied to revenue allocation from Abuja. Recall the dispute between the National Population Commission and Lagos State as to whether the state’s population was 9 million or 18 million? We know what happened during the census. We also know what goes on with school enrolment figures. States are in competition to maximise these numbers to get more money. Ultimately our population figures are political figures designed to balance and maintain some presumed structures of the country. Truth be told: we don’t know how many Nigerians we are planning for. If we are serious, there is the technology to undertake biometric capture of all citizens, without any duplication.
Recently, the NBS released a bombshell on poverty incidence. According to NBS, poverty has worsened from 54 per cent in 2004 to 69 per cent in 2010 and 72 per cent in 2011. A decomposition of the figures reveals that states in the South contributed 70 per cent of the deterioration while states in the North contributed 30 per cent. Wonderful! This is a subject for another day. In more organised societies, such figures (if they are believable) can pull down a government. But, are they believable?
Empirical evidence for Africa in the late 1990s showed that a GDP growth rate of about 4-5 per cent was required to stop poverty from getting worse; and 7 per cent or more to achieve the MDG goal of halving poverty by 2015. In fact, I do not know any country with a broad-based GDP growth rate of 5 per cent or more for a decade without a significant reduction in poverty. Income (measured by GDP) is the most important determinant of poverty.
For Nigeria, NBS tells us the economy has been growing (at least since 2003) by an average of 7 per cent or more. It also says that the growth is driven mostly by non-oil sector whose growth rate exceeds 8 per cent. Agriculture which employs most of the poor people is said to be growing at an average of 7 per cent per annum. So, the growth is broadly shared. Furthermore, the statistics says Nigeria has become less unequal. Gini coefficient has declined from 49 per cent in 2004 to 44 per cent in 2010 -- bringing the level of inequality in Nigeria to just about the level in China. Hmmm!
The explanations given by the NBS for the recent deterioration in poverty are, to say the least, very flimsy. The NBS 2005 detailed report has more robust and plausible explanation of poverty dynamics in Nigeria.
I am not making any judgment as to which of the statistics is right or wrong, but both cannot be right at the same time. You cannot have ‘high broadly-shared’ growth of 7 per cent or more (as reported) and escalating poverty at the same time. If the poverty numbers are correct, then the GDP numbers are wrong. If the GDP numbers are correct, then the poverty numbers must be wrong. Let me be more emphatic: if the GDP numbers are correct, poverty will be below 50 per cent in 2011; and if the poverty numbers are correct, then GDP must have been contracting dangerously!
All the pedestrian explanations for increased poverty including insecurity, corruption, waste, poor infrastructure including power, etc ought to show up in the GDP growth rate. If, in spite of all these, GDP or income is still growing rapidly as claimed, then poverty cannot be rising. In a layman’s language, the GDP data claim that most people are getting richer. Nigeria cannot publish data showing us that people are getting richer and poorer at the same time. Investors are getting confused.
To further illustrate the absurdities, let us rewind back to 1985. With the collapse of oil prices in 1982, the economy massively imploded, with stringent austerity measures, mass retrenchment of workers and non-payment of salaries, queuing for essential commodities, negative average income growth, and yet poverty incidence was reported at just 45 per cent. Under the SAP era, poverty was reported to have fallen to 42 per cent in 1992, before climbing dramatically to 66 per cent in 1996. Between 1996 and 2003, average GDP growth rate was about 4 per cent, and poverty dropped to 54 per cent. Now came the ‘boom era’—income growth of 7 per cent or more since 2003, and paradoxically, poverty also exploded to all time high of 72 per cent in 2011. Something is definitely not adding up!
I suspect a fundamental flaw in the sampling process and computational technique. Nigeria must get to work. Full implementation of the Statistical Master Plan is an important first step. Reliable statistical system costs money but it is an inevitable soft infrastructure of development. As CEO of National Planning, I refused to sign on to a $50 million World Bank loan for NBS. For me, Nigeria should only borrow for bankable projects, and not for all kinds of waste pipes dressed as ‘capacity building’. If we cannot adequately fund NBS, I wonder what else deserves better attention.
By Roseline Okere
A RECENT survey embarked upon by the African Institute for Applied Economic (AIAE) identified inadequate electricity, transportation challenges and water and sanitation as some of the constraints of doing business in Nigeria.
The immediate past Executive Director of the Institute, Prof. Eric Eboh made this disclosure at the just concluded World Bank, International Development Research Centre (IDRC) and Think Tank Initiative (TTI) held in Cape Town, South Africa.
Christened BECANS, - Business Environment Across Nigerian States is a flagship research, survey, dissemination and advocacy initiative of the institute.
A statement by Communication and Public Affairs Manager, AIAE, Mr. Sola Oluwadare, quoted Eboh, saying that the result of the survey showed that many business environment constraints were imposing additional costs and risks to doing business in Nigeria and infrastructure remains a key constraint, particularly power, transport, water and sanitation.
“Red-tape in business regulatory services such as property registration, business licensing, tax administration and commercial dispute resolution and advocacy by private sector and civil society weakened by lack of organisation, poor resource mobilisation and paucity of research evidence among others have hampered business climate in so small way,” Eboh noted.
According to the statement, the objectives of the initiative include to inform and stimulate policy, institutional and administrative reforms for better business environment throughout Nigeria, to promote evidence-based stakeholder dialogue and feedback for a better business environment in the states and throughout the country and to establish and institutionalise an independent business environment-focused peer review mechanism for thirty six Nigerian states and the Federal Capital Territory.
He explained that the business environment survey embarked on by the African Institute for Applied Economics (AIAE) was to provide objective assessment and advocacy on the domestic business environment in a regular on going manner and to establish monitoring mechanism to gauge the health of the business climate in Nigeria.
The first edition, (BECANS I) was published in 2007. The initiative runs in successive cycles of research, surveys, dissemination and policy dialogue for the promotion of better business environment throughout the country.
Each cycle begins with desk research (the scientific validation of models, methods and indicators) and followed by survey/data collection, data analysis, report writing, publication, dissemination and dialogue between the government and stakeholders in private sector and civil society.
Oluwadare said the specific benefit to policy process of BECANS include identification of business environment lags and their impacts on investments, job creation and poverty reduction.
This has made the report become a barometer for policy makers, private sector and civil society and also aligns with Nigeria’s federal structure, unlike global investment climate assessments, which focus on Nigeria as a single phenomenon.
From Berlin to Brussels: Will Europe Underdevelop Africa Again?
By Chukwuma Charles Soludo
ThisDay Newspapers, March 19, 2012
Africa is in trouble. Its future is once again on the table, and it is Europe that holds the ace. Unlike the Berlin Conference of 1884 to 1885 which balkanized Africa among 13 European powers as guaranteed sources of raw materials and market, the current contraption under the Economic Partnership Agreements (EPAs) spearheaded from Brussels is the modern day equivalent of the Berlin Conference. At issue in both Berlin and Brussels is whether or not Africa can be allowed latitude to conduct trade, industrial and development policies for her own development or for the development of Europe. A major difference is that the ‘agreement’ will now be signed by free people, under supposedly democratic regimes, and in contexts where the African people again have neither voice nor choice. Only about 10 out of 47 Sub-Saharan African countries (SSA) have either signed or initialled the EPAs. Trade ministers of the affected regions—the African, Caribbean and Pacific (ACP) countries as well as African trade ministers and the African Union—have largely rejected the EPAs. Despite all of these, and the reported public protests in twenty countries against the raw deal, it seems all but certain to be rammed through. In private whisperings, not many Africans or policymakers are happy with the deal but there is a certain sense of helplessness.
Since 2002, the EU has been negotiating the EPAs with the ACP countries as a fully reciprocal trade arrangement to replace the previous non-reciprocal, preferential trade access of ACP countries to EU markets under the various Lome Conventions and the Cotonou agreement. The argument, according to the EU, is that such preferential access violated Article XXIV of GATT, and that the WTO waiver that allowed such preferences expired in December 2007. Consequently, the ACP countries are divided into seven regions (with five in Africa) for the purposes of the negotiations. As advertised, EPAs are “set out to help ACP countries integrate into the world economy and share in the opportunities offered by globalization”. The EU points to the ‘failures’ of the previous preferential arrangements to ‘boost local economies and stimulate growth in ACP countries’. Thus, the new reciprocal arrangement is expected to remedy the failures of the past and usher the Eldorado to Africa.
Specifically, EPAs are expected to be "tailor-made" to suit specific regional circumstances; go beyond conventional free-trade agreements, focusing on ACP development, taking account of their socio-economic circumstances and include co-operation and assistance to help ACPs implement the Agreements; open up EU markets fully and immediately (unilaterally by the EU since 1st January 2008), but allowed ACPs 15 (and up to 25) years to open up to EU imports while providing protection for the sensitive 20% of imports; provide scope for wide-ranging trade co-operation on areas such as services and standards; and are also designed to be drivers of change that will kick-start reform and help strengthen rule of law in the economic field, thereby attracting foreign direct investment (FDI), so helping to create a "virtuous circle" of growth. The above sounds quite familiar, and anyone familiar with the Structural Adjustment Programme (SAP) documents will recognise the language. Consequently, countries were rushed to initial interim EPAs before the end of 2007, and some countries went on to sign them later. These have mainly been single countries. Most of the sub-regions, as groups of countries, are still negotiating the regional EPAs (e.g. West Africa, Central Africa, SADC etc).
Put simply, in order to continue to have access to European markets (on the terms that it had enjoyed for more than three decades) Africa is now required to eliminate tariffs on at least 80% of imports from the EU; in some cases, abolish all export duties and taxes, in others, countries can retain existing export taxes but not increase them or introduce new taxes; eliminate all quantitative restrictions; and meet all kinds of other intrusive and destructive conditionalities that literally tie the hands of African governments to deploy the same kinds of instruments that all countries that have industrialised applied to build competitive national economies. Under the WTO, least developed countries (LDCs) are not required to further reduce their tariffs (at least they have the choice to decide whether and when to do so) but EPAs require at least 80% of them eliminated. Indeed, Africa is being asked to comply with more stringent conditions than Brazil, India and China are required to meet under the WTO. Almost all the flexibilities in policy choice that Africa and other developing countries won under the WTO are lost under the EPAs. Hitherto, the EU had also (in addition to the Cotonou agreement) granted a special concession to all African LDCs – the ‘Everything But Arms’ (EBA) - allowing them to export duty-free to the EU. This was the EU’s equivalent of the US Africa Growth Opportunity Act (AGOA) and African LDCs were not expected to reciprocate. With EPA, it means that EBA is effectively dead. LDCs would have to provide reciprocal market access opening. In addition, what the EU has failed to get under the WTO or issues that developing countries have rejected under the WTO are being foisted on Africa under the EPA. For example, the so-called trade-related issues (the Singapore issues) such as investment, competition and transparency in government procurement, which are dead under WTO are being smuggled into EPA.
There are all kinds of studies on the possible effects of the EPAs on African economies. While it is fair to acknowledge that some of the presumed impacts (positive and negative) may be exaggerated, there is abundant evidence that the EPAs would be damaging. Africa’s nascent industrial sector and agriculture (which is the mainstay of the poor) would be damaged by the new import armada and dumping thereby exacerbating unemployment and poverty. In some countries, imports of sugar, dairy, poultry, rice, vegetable oil, etc have already increased four-fold. Tariff revenues will shrink; premature and permanent opening up of service sectors including financial services leaves them open to the full hazards of the perennial global financial bubbles; and it will badly hurt intra African economic integration. Africa would almost be consigned to be specialists in the export of raw materials. African countries cannot use government procurement and contracts to prop up and promote domestic companies as European companies would be required to be given equal treatment in competition for government contracts. The list of the damages is long and cannot be detailed here. Some independent studies by EU admit these damages, and one such study predicts that EPA could accelerate the collapse of manufacturing in West Africa. Perhaps, that is why the EU is promising ‘aid for trade’ – to sooth and compensate for some of the damages.
What is worrying is that it is difficult to point to any significant net benefit of EPAs to Africa. Already 33 out of the 47 countries are LDCs and therefore qualify to export ‘everything but arms’ to the EU with 100% duty-free and quota-free. So, what is the additional benefit to these countries? For the remaining 14 non-LDC countries, it is curious why the EU cannot accede to the request by the African Union to treat Africa as the world’s archetypical LDC region and grant the same EBA to all of the countries. Or, alternatively there are several proposals about benchmarking and sequencing the conditionalities/liberalization to synchronize with economic advancement of these remaining 14 countries. So far, these proposals have not been accepted by the European Commission even for discussion.
In any case, the EU’s peculiar interpretation of Article XXIV of GATT is a convenient one. The EU relies on this Article to argue that the WTO outlaws non-reciprocal, preferential trade to Africa under the Cotonou agreement. But the same Article refers to trade in goods, and so why has EU brought up all kinds of issues – services, investment, procurement into the EPA? Second, it must be noted that this article crafted in 1947 is itself still a subject of the Doha trade negotiations. Third and to be honest about it, the WTO does allow for non-reciprocal preferential trade arrangements if the motivation for EU’s action is to assist Africa. Currently there are more than 7 active waivers in the WTO provided to the US, EU and Canada for preferential trade schemes for developing countries and transition economies. For example, the US has a waiver for its AGOA for sub-Saharan Africa. Recently, the EU has obtained two waivers to grant non-reciprocal trade preferences to poorer European countries namely, Moldova, and another one to the Western Balkan transition economies (Albania, Bosnia and Herzegovina, Croatia, Macedonia, Serbia, Montenegro, and Kosovo). It is remarkable to note the EU’s argument for applying for waiver to the WTO in respect of Moldova. According to the EU, “Moldova is the poorest country on the European continent… and does not have the competitive strength to take reciprocal obligations of a free-trade agreement with the European Communities” (WTO document of 29 February, 2008). But Moldova (the poorest European country with per capita income of about $2,300; life expectancy of 71 years and adult literacy rate of 99%) is far better than most sub-Saharan African countries, and not to talk of much richer ones like Croatia with about $10,000 per capita income. Compare this to much of Africa and even the 14 countries dubbed ‘non-LDC’ (Nigeria has a per capita income of about $1,200; Ghana $1,475; Kenya $1,125; etc and in all of these countries poverty incidence is at least 50%). Something is not adding up here. According to the EU, granting non-reciprocal preferential trade concessions to fellow European countries that are richer than most African countries does not violate WTO rules, but doing so for Africa does. Africa remains the world’s poorest region and perhaps the last development challenge. The EU needs to come up with a credible explanation. I can almost hear some people screaming… Double standards, or isn’t it?
EU needs to come clean. It does not have to apologize about it because after all, it can argue that it is the way the world works. From the time of slavery to the Berlin conference, Africa has either been a source of free labour and profit or source of raw materials and market. Only the dynamics change but the substance has remained. After all, nation states hardly act out of love but in pursuit of self-interests.
We appreciate that the global economy today is rumbling, with new tensions and challenges. As the old economic powers are largely broke, the emerging economies with cash are roaring. The BRIC (Brazil, Russia, India, and China) are seen as the ‘new threats’. The global economic landscape is unravelling and recoupling in such a manner that would likely alter the economic, military, and geopolitical power in the medium term. With this has emerged new pressures and demand for exhaustible natural resources and markets to sustain national security and prosperity. Since the major powers are no longer able to make use of the WTO as they wish to impose new rules on developing countries, they are now resorting to bilateral and regional policies and agreements to try and get their way. There is a subtle war for ‘territories’ and Neo-mercantilism is the name of the game. The US is locking-in its neighbours in Latin America into one form of free trade agreement (FTA) or another. Africa has once again attracted attention as a theatre of the new struggle. China is accused by the West of either ‘invading’ or ‘exploiting’ Africa with its peculiar brand of ‘aid’. In this circumstance, it could only be expected that EU would move quickly to secure its possession—Africa. In the European Commission’s 2008 document entitled “The Raw Materials Initiative—Meeting our Critical Needs for Growth and Jobs in Europe” and presented to the European Parliament and the Council, one can get a clearer glimpse of the real impetus for EPA. Trust the sophistication of the negotiators, it is being branded as an initiative to ‘help’ or ‘develop’ Africa. History repeats itself in a funny way. Recall that the advertised ‘benefit’ to Africa of the Berlin conference that cemented colonization was to ‘help in suppressing slavery’. The rest is history!
In terms of the technique deployed to coerce compliance by Africa, it is the old classic: divide and rule, and carrot and stick. EU negotiates as a bloc, but ACP countries are divided into seven regions, sometimes not exactly matching the regional integration arrangements. Even within the negotiating regions, each country is literally on its own: that way, it is easy to pick them off one by one. If Africa negotiates as a bloc, it may be difficult for EU to get its way easily. The principle of the early bird is applied to create what economists call the prisoner’s dilemma and thus making collective action difficult. Countries that have ‘signed’ are allowed to continue to enjoy their preferential access to European market while those that have not signed are under all kinds of threats. Those already in the privileged club do not want to lose their privileges and see themselves as ‘special’ while those excluded struggle to sign on the dotted lines. Different EPAs signed by different countries contain significant differences in terms of tariff lines, sequencing and speed of liberalization, depending on the negotiating capacity of the country/region. We understand that in some cases, the advisers to some countries’ negotiators are Europeans. Most countries still resist and now export under the EU Generalized System of Preferences (GSP); EBA for the LDCs; and the standard GSP for Nigeria, Republic of Congo, Gabon and some Pacific countries. South Africa continues with its old free trade arrangement with EU. Even the GSP for some countries is now under threat. Power is the issue here. Given the weaknesses of the states and structural vulnerabilities of most African countries, including dependence on aid and trade with Europe for many, it is evident that what is going on is not negotiation but dictation.
The apparent sweetener to the bitter pill is the EU’s ‘promise’ of ‘EU Aid for Trade’ by which EU is to provide financial assistance to EPA countries to enable them to build capacity, including infrastructure, and facilitate their implementation of the new agreement. This new ‘promise’ for aid is indeed funny, and raises important questions. Is this going to be an ‘additional aid’ or a re-branding of existing but unmet commitments? Under the auspices of the United Nations, the rich industrial countries in 1970 committed to devote 0.7% of their Gross National Income to aid. Some 42 years now, it remains a promise not kept. Only five countries- Sweden, Norway, Denmark, Netherlands, and Luxemburg - have met the 0.7% of GNI in aid.
We have lost count of the numerous conferences and summits for mobilizing resources for development and the numerous ‘promises’ of increased aid. None of the previous ‘promises’ of funding for Africa’s development has been met. Neither the Lagos Plan of Action nor the Africa’s Alternative Framework to Structural Adjustment Programme (which was approved by UN-General Assembly) received any support. The UN New Agenda for the Development of Africa in the 1990s did not receive the promised financial assistance. By 2001, the African Union in Zambia launched its New Partnership for African Development (NEPAD), and at the 2002 G-8 Summit in Kananaskis, Canada, NEPAD was adopted by G-8 leaders as “a bold and clear-sighted vision” for Africa and pledged financial assistance to ensure that NEPAD did not go the way of previous efforts. At the UN Conference on ‘Financing for Development (Monterrey, Mexico), more pledges were made. The result of all of these ‘pledges’ is that aid to Africa has fallen since the mid-1990s in nominal and real terms.
A recent one was the EU’s ‘promise’ to increase aid to 0.56% of GNI by 2010 (aid to all countries not just Africa). Our question is whether the ‘aid for trade’ will be additional to the yet to be met 0.7% or is a new benchmark being ‘promised’? Without doubt Africa needs huge resources to develop intra and inter regional transportation networks to integrate the national markets as well as to address the myriad of critical supply bottlenecks that were decisive in preventing Africa from fully taking advantages of previous preferential trade arrangements. However, anyone following the developments in the EU as well as its history of delivering on previous ‘promises’ can make some judgements as to the credibility of a new ‘promise’.
Beside the quantum of aid, the quality of its delivery is critical. The kind of ‘aid for trade’ that Africa needs should be in the quantum and delivery mechanism that should build the infrastructure to integrate the fragmented African markets into a common market. Currently, it is more expensive for many African countries to trade with fellow African countries than with Europe. But aid to Africa is largely country-specific and neither the EU nor the World Bank has a robust framework for regional aid or lending. Country based ‘aid for trade’ even when it is of any significant quantity and quality merely reinforces existing fragmentation, creating a hub and spoke framework whereby Europe is the hub and individual African countries constitute the spokes.
On a related subject, is EPA going to happen in the context of the continued existence of the EU’s Common Agricultural Policy (CAP) with its harmful subsidy regime? In 2006, a leading UK newspaper, The Independent, succinctly captured the travesty. According to the newspaper, the EU Common Agricultural Policy (CAP) “lavishes subsidies on the UK's wealthiest farmers and biggest landowners at the expense of millions of poorest farmers in the developing world. The UK Government must lobby hard within the EU to agree an overhaul of the CAP by 2008 to put an end to the vicious cycle of overproduction and dumping. The £30bn-a-year EU agricultural subsidy regime is one of the biggest iniquities facing farmers in Africa and other developing countries. They cannot export their products because they compete with the lower prices made possible by payments. In addition, European countries dump thousands of tons of subsidised exports in Africa every year so that local producers cannot even compete on a level playing field in their own land. Meanwhile, governments of developing countries come under intense pressure from the World Bank and the International Monetary Fund to scrap their own tariffs and subsidies as part of free trade rules”.
How apt! As at 2011, the subsidy totalled about £48 billion per year (about US$75 billion) and it is expected to stay at this level until at least 2020. Yet African countries are expected to liberalize NOW. Some analysts have opined that the huge subsidy in Europe is an implicit tariff of hundreds of per cent on agricultural imports. Alternatively, some believe such subsidy amounts to banning imports of agricultural goods and promoting dumping in other countries—especially Africa. Agriculture is the sector where Africa has comparative advantage and with the right policies and incentives, can feed Europe cheaply. A regime that keeps the status quo of harmful agricultural subsidy and the pittance of misguided and largely consumption-oriented aid, and hopes to ‘develop’ Africa is, to put it mildly, suspect. The EU refuses to put the reduction or elimination of their agricultural subsidy on the EPA agenda. A clear signal from the EU here is that whenever its own interests are affected it is unwilling to make any concession. To make EPA a development agenda, agriculture must take centre stage.
But humanity has experience in delivering aid that works. We can replicate it for an effective and truly development-oriented EPA. The most effective aid in human history was the US aid to Europe after the Second World War--- the Marshall Plan to rebuild the European infrastructure. The US felt a sense of obligation (given the historical ties with Europe) to provide a ‘big push’ to lift Europe up after devastation by the war. We are not sure if EU feels the same sense of obligation to Africa (given the history we all know too well). But just imagine for a second that EU feels a need to support Africa through a Marshall Plan kind of aid. Imagine that the EU were to stop its subsidy to agriculture and divert just three years’ subsidy fund to create African Fund for Transformation--- call it the ‘Brussels Plan for Africa’---and this will come to about $225billion. Alternatively, instead of stopping the subsidy abruptly, EU could go for a phased process, diverting just 50% of the subsidy fund into the Africa Fund over the first six years before finally phasing the subsidy out. If this Fund (akin to a sovereign wealth fund) is invested and the annual income proceeds invested (estimated at about $20 billion per annum in perpetuity), you could over time build highways and train networks linking all of Africa, and increasing the irrigation of its arable agricultural land from the current less than 5% to more than 50%. Let EU bring its own contractors—since it cares much about procurement, but let’s get this done. That way Africa can feed itself, Europe, and the world cheaply; lift hundreds of millions out of poverty, and you can create an environment for a truly ‘virtuous circle’ of growth and transformation. With a truly integrated African market, a new dynamism for quantum leap will have been created, and no one will be surprised that the combined African economy might become the next China or India. This is when the kind of FDI inflows romanticised about in EPA documents can be expected to kick-in.
The point of the foregoing is that an alternative future between Africa and Europe is possible. Pervasive leadership failures have been at the heart of African underdevelopment in the last 50 years. Finally, there seem to be some flickers of light, and Africa is gradually pulling itself up by its own bootstraps. Africa has never had it better than in the last one decade, and compared to the lost decades it has begun to at least crawl. If EU cannot assist Africa to walk and run, the least it should do is not to hinder the nascent progress. Aggregate African economy is less than 2% of global GDP, and thus as a small open economy, it needs to integrate within and without: Africa needs the global market. But lessons of the last two decades have reconfirmed that there are right and wrong ways to integrate into the global market, especially for poor and fragile economies. While the world is yet to invent anything better than a market economy, it is also true that extreme market fundamentalism—that denies the existence of market failures and missing institutions—has brought more ruin than remedy. A more balanced approach has been the winning strategy for all countries that have developed in the last century. But EPA, as currently designed, is a poison chalice. Fragmenting Africa and ramming through deadly trade arrangements in a manner that undermines internal African integration, ties the hands of policymakers and circumscribes the policy space, and literally enslaves the African economy may be smart for Europe in the short-run but not wise in the long term.
If EPA is meant to develop Africa, it needs to be owned by Africans. Currently, even in countries that have ‘signed’ or ‘initialled’ the document, there is little or no public discussion by the private sector, parliaments, and civil societies. We hope if EPAs are to be domesticated, it will not be the kind of charade of ‘rent a crowd’ consultations that were designed to rubber stamp the poverty reduction strategy papers (PRSPs). We now know better and must therefore do better.
Africa and Europe need a “Development Summit”: we need to talk to each other frankly and directly. If the issue is ‘development’ of Africa, there are certainly superior alternative proposals for a more beneficial relationship between Europe and Africa. The African Union, various sub-regional groupings, and even the ACP ministers of trade have canvassed alternatives to EPA. History should not repeat itself. In the mid 1980s, Africa came up with the Africa’s Alternative Framework to Structural Adjustment Programme (AAF-SAP). All African governments endorsed it; the United Nations General Assembly endorsed it, but the conventional SAPs were rammed through by the donor agencies which had the power of the purse. It took almost two decades of destruction for most development partners to admit that ‘mistakes were made’ and that ‘no one had all the answers’, and before major elements of AAF-SAP became part of the Washington orthodoxy. This kind of costly experiment must be avoided. It is the lives of hundreds of millions of Africans that are at stake again. It is time to sit down and talk. Other partners, such as China, India, and the US can join the Summit. So far, the EPA process and outcomes have more of the characteristics of a second scramble for Africa (that is, a second Berlin conference) than a development (Brussels’) initiative. That may not be what many stakeholders thought it was, but de facto, that is what is being delivered. We believe there is sufficient goodwill and technical capacity on both sides to craft a new rather than a raw deal. We believe also that many scholars, statesmen and women, civil society organizations etc may certainly not be fully aware of what is going on. Frankly, I do not believe that the UK, France, and the Nordic countries in particular, can, with all the recent talks about a new century for Africa, be part of this contraption. Those who care must rise to the occasion NOW, and not wait for years and then write post-mortem analyses of doom and gloom. Some 30 years ago, I read a depressing book by Walter Rodney entitled “How Europe Underdeveloped Africa”. At the turn of the 21st century, we must sing a new song. With sufficient will on both sides, I pray that my grandchildren will in the next few decades read a response to Rodney in a book to be entitled “How Europe developed Africa”.
*Soludo, a Professor of Economics, has served as Chief Economic Adviser to the President of Nigeria as well as the Governor of the Central Bank of Nigeria. He is currently on the Board of the South Centre, Geneva; Chairman of Board of the African Institute for Applied Economics; and a Member of the Chief Economist’s Advisory Council, World Bank.
The Business Eye Magazine. Friday, 2 December 2011
Generally, the private sector is regarded as the major driver of any country’s economy. This is because efficiency, competition and creativity form the oil which lubricates the engine of growth in business. The expectation of the Nigerian government is that the experience, connection and versatility of the players in the private sector, which have kept their business concerns going over the years in spite of the not too favourable business environment, will become the magic wands in running a renascent economy.
The recent involvement of the major private sector players in the Nigerian economy as members of the Economic Management Team to drive President Goodluck Jonathan’s Transformation Agenda means different things to different people. Even though it is impossible to rule out their business interests from the Federal government’s assignment of running the economy with the selected ministers and other public office holders in the team, Nigerians are in a hurry to start reaping the gains of truly democratic government.
Another dimension of the involvement of the private sector emerged recently when the African Institute for Applied Economics (AIAE) took the bull by the horns by bringing the stakeholders to rub minds at the Roundtable on Economic Transformation Process in Abuja. The event was held in collaboration with the Office of the Special Adviser on Performance Monitoring and Evaluation.
AIAE is an independent research institute devoted to economic research towards promoting evidence-based decision making through sound analysis of socio economic issues, facilitating policy dialogue and private sector development activities. The Institute is an economic research think-tank devoted to improving the evidence and analytic bases for sound public policies in Nigeria and Africa.
The discussion at the Roundtable revolved round key pillars for Nigeria's economic transformation, namely fiscal consolidation; business environment and institutional reforms and participants were drawn from the relevant government agencies, members of the Economic Management Team, Diplomatic Community, the Organised Private Sector (OPS), Non Governmental Organisations (NGOs), Civil Society Organisations ( CSOs) and other stakeholders. The Executive Director of the AIAE, Professor Eric Eboh, said the three key economic issues of fiscal consolidation; business environment and service delivery tackled at the Roundtable were equally important and interrelated. The policy analyst noted that these three economic fundamentals could therefore be considered as critical signposts of Nigeria’s transformation.
Eboh averred that, “Fiscal consolidation would entail prudent management of public spending by the three tiers of government. Improving the business environment, particularly power and transportation, is indispensable for economic diversification, accelerated growth, creation of wealth and employment. But, unlocking the business environment for non-oil growth will not happen without significant reforms of infrastructure and regulatory systems. Achieving better service delivery is fundamentally linked to public service and institutional reforms that are designed to deliver improved public service performance, effectiveness and efficiency.”
He charged the policymakers to handle these critical issues with all seriousness because, “how the country deals with the decision, challenges and associated trade offs will shape the success of the economic transformation agenda and the prospects of economic prosperity in the medium to long term. The criticality of the economic policy challenges coupled with the government’s economic transformation agenda has re-ignited the momentum for realignment of macroeconomic, fiscal and sector policies.”
For the Special Adviser to the President on Performance Monitoring and Evaluation, Professor, Sylvester Monye, performance is the bottom-line of the people’s expectation of government. He disclosed that his office was developing simple and straightforward measures to assess whether the outcomes expected of the government agencies were being realised.
Hitting the nail on the head, the Head of Service of the Federation, Alhaji Issa Bello, said that for Nigeria to realize its dream in line with Vision 20:2020 and the Transformation Agenda, “the Civil Service which harbours the human resources needed to propel the nation forward should be prepared to embrace global best practices and the challenges thrown up by globalization.” He then called on the stakeholders to join forces with government in charting the course to logical conclusion.
The number one civil servant revealed that in the interim, government would look forward to continuing with the following interventions while looking for areas to fine tune them as we go along; service delivery initiative, christened SERVICOM, examination for appointment of permanent secretaries, mandatory training and examination for all officers, the performance management system, the e-learning initiative and staff exchange programme between the public service and the private sector.
The other speakers at the conference called for holistic approach to the transformation process. According to them, this is a period of change for the country, re-engineering, restructuring, re-organisation, reworking and transformation. They urged the government to introduce performance contract which clearly specifies the intentions, obligations and responsibilities of the government and the workers. Performance contract is freely negotiated performance agreement between the government, acting as the agency, and the management of the agency.
The toga of responsibility is now on all the stakeholders to see how this dream can be realised. In fact, one big lesson to learn from the AIAE’s initiative is that the role of the private sector in driving economic process cannot be over emphasised. Research institutes, NGOs, CSOs should join forces to chart the course of progress with the Federal Government. Unless this is done, the country’s dream of becoming one the biggest economies by year 2020 may remain a dream for long.
Businessday, Thursday, 18 August 2011 00:00
Foreign investors in the Nigerian economy are moving away from starting new companies or production plants and are buying up shares of quoted companies instead. Figures from the 2010 Central Bank of Nigeria (CBN) annual report show a steep 78.1 percent decline in foreign direct investment while also showing a significant 87.2 percent increase in portfolio investment into the Nigerian economy.
Foreign Direct Investment (FDI) is usually investment targeted at building new factories or investing in actual production activities which create jobs for Nigerians. Portfolio investment on the other hand, is investment targeted at buying shares of companies and Federal Government and Corporate bonds. They are called paper assets, as these assets usually do not directly add to the productive capacity of the economy.
Eric Eboh, a policy economist, says this observed trend shows that the Nigerian business environment is currently challenging. “Investors are risk conscious and they have taken note of this.” Figures taken from the CBN 2010 annual report, show that total foreign capital inflow into the Nigerian economy in 2010 was $5.99 billion. A breakdown of the amount shows that the FDI portion was just 12.2 percent or $668 million. This represents a 78.1 percent drop from $3.31 billion in 2009. This is the third consecutive year of decline in FDI inflow into the country.
The CBN blames the drop in FDI inflow into to the country on the “poor state of infrastructure and the global economic uncertainty.” The global economic uncertainty did not however negatively impact on the appetite of foreign investors for Nigeria’s paper assets, as portfolio investments shot up sharply by 87.1 percent, to $3.9 billion in 2010 representing 65.5 percent of capital inflows into the country.
A breakdown of the portfolio inflows shows that money flowing to buy shares or equity in Nigeria ’s highly beaten stock market made up 75.8 percent of these inflows. Also 22.5 percent of the portfolio inflows went into buying money market instruments, while the balance of 1.7 percent went into buying bonds. Other investments, comprising trade credits, loans, currency deposits and other claims, made up the balance or 22.2 percent of the total capital inflow of $5.9 billion which came into Nigeria in 2010. Loans made up the bulk of other investments which came into the country in 2010, accounting for 99 percent or $1.399 billion of the inflows in this category.
Eric Eboh says the trend shows that investors are looking for lower risk windows for their investments. “It is a reprioritising of risks. FDI is what creates jobs. But you have to interface with the economy and investors may be avoiding this. Increased FDI inflow is usually a vote of confidence in the economy.”
Opeyemi Agbaje, a management strategist and lead consultant with Resource and Trust Limited, also agrees with this view. “The trend shows foreign investors are taking a short term view of the economy. They may have seen short term opportunities in the economy which they are taking advantage of. However, they are not investing in the country. Portfolio investment is not the type of investment we want. They are volatile” Agbaje explained.
Analysis of the sources of foreign capital inflows by country into Nigeria shows that the United Kingdom remained the biggest source of capital inflows into Nigeria in 2010, accounting for 45.6 percent of all inflows. The United States ranked second with 20.7 percent, while South Africa ranked third with 9.0 percent of inflows.
Inflows that passed through Mauritius ranked fourth, with 2.7 percent, while Luxemburg ranked fifth with 2.0 percent. Sweden accounted for 1.5 percent of inflows while the United Arab Emirates (UAE) accounted for 1.3 percent, and an unspecified number of countries accounted for the balance of 14.3 percent of capital inflows into Nigeria.
Interestingly, investment inflows from China dropped significantly in 2010 to $9.0 million from $139 million in 2009. It is not clear why investment inflows from China dropped this much, considering the country is a major source of FDI into emerging markets like Nigeria. Inflows according to economic sectors show that the Nigerian stock market witnessed the biggest inflow of funds, accounting for 52.7 percent of all inflows for the purchase of shares. The CBN says that this is an indication of the “the renewed investor confidence in the capital market, following a series of reforms” Opeyemi Agbaje however believes it may be because investors have found out that Nigerian stocks are currently cheap.
Other economic sectors that attracted significant cash inflows include the banking sector with 15.2 percent of capital inflows into Nigeria . The manufacturing sector attracted 14.2 percent of all capital inflows in 2010 - higher than the 8.0 percent of capital inflows attracted by the telecommunications sector. Other unspecified sectors of the economy attracted the balance of 9.9 percent capital inflows into the Nigerian economy.
Analysis of the inflows into the different sectors of the economy shows that the banking sector recorded inflows of $909 million in 2010, representing a 188 percent decline from $2.62 billion inflows in 2009. This represents a third year of consecutive decline in investments to the banking sector. Other sectors that witnessed declining investment inflows include the oil and gas sector, for which inflows dropped to $89 million in 2010 from $114 in 2009 and from a high of $641 million in 2008. Inflows to the “financing” sector also slipped for a fourth consecutive year, to $171 million from a high of $929 million in 2007.
Economic sectors that witnessed increased capital inflows, interestingly include the production and manufacturing sector, which shot up significantly by 190 percent, to $854 million in 2010 - the highest inflows into the sector in four years. Inflows into buying shares in the Nigerian stock market also touched a new high of $3.16 billion, 113 percent on the inflows of $1.48 billion in 2009 but 7.6 percent lower that the inflow of $3.42 billion in 2008. The service sector, trading and construction sectors also witnessed some increase in inflows.
by Toba Agboola
The Institute for Applied Economics (AIAE) has called on the Federal Government to involve the middle class in drafting and implementing policies that will revive the industrial sector of the economy.
The institute, at a recent workshop in Enugu, said the involvement of the middle class in the drafting, implementation and monitoring of government policies will lead to rapid industrialisation in Nigeria.
The Executive Director of the institute, Professor Eric Eboh, at the workshop organised on ‘The Future of Middle Class in Nigeria’, disclosed that the workshop was organised to galvanise experts’ opinion on the position of middle class in nation building in the next fifteen years.
Eboh noted that the workshop was part of the institute’s efforts of creating forum for experts and stakeholders to analyse topical issues that would form input into public policy.
He added that AIAE is committed to creating opportunities for positive contributions to overall economic development in Nigeria and African countries at large.
He said: “AIAE is interested in knowing how the behaviour of middle class could be used to improve on different policies and programmes of the government.
“The institute will weave the ideas together to form synthesis and opinion about where the middle class belong in the next few years. It is an intellectual framework between social and economic studies.”
In their various contributions, the selected stakeholders drawn from several fields of profession including; economics, public relations, media, academics, medicine, bankers, bureaucrats as well as businessmen and women averred that the emergence of the middle class in the scheme of things in Nigeria had shown that the group was ready to play a noble role in nation building.
Though the participants at the workshop concurred that definition of middle class is ambiguous, the group (middle class) could be seen as a class of people in the ‘middle of societal hierarchy’.
According to the participants, middle class has re-emerged in Nigeria and the major factors that characterised the inclusion of anybody in the class are income, education, social networking and professional inclination, lifestyle, expenditure and consumption patterns and employment.
The experts hinted that the middle class which constitutes the Civil Societies (CSOs), the Non Government Organisations (NGOs) and other voluntary organisations, remain the building block across the world and, therefore, called on the government to take advantage of their contributions in delivering dividends of democracy to the citizenry. The stakeholders gave the middle class a pat on the back, saying its roles in Nigeria’s democratic process has culminated in free, fair and credible elections.
They unanimously challenged the Federal Government to reciprocate this gesture by upholding good governance as regards to maintaining relative peace in the Niger Delta, implement the power blueprint, implement the local content policies in different sectors, enhance establishment of schools to create environment for skill development and improve technology development among others in the country. They called on those taking leadership positions in government to sustain the current tempo in Nigeria, which they believe will take the country to a great height
Written by Ayomide Owonibi
The African Institute for Applied Economics (AIAE) has said that in order to reduce poverty and unemployment in Nigeria, the middle class should be involved in policies that affect industrial development. This, the institute said, was necessary due to the emergence of the middle class in Nigeria’s democratic process in recent times.
The Executive Director of the institute, Professor Eric Eboh, who made this known at a workshop entitled “The Future of Middle Class in Nigeria” recently, noted that the workshop was organised to galvanise experts’ opinion on the position of middle class in nation building in the next 15 years.
Professor Eboh noted that the workshop was part of the institute’s efforts at creating media for experts and stakeholders to analyse topical issues that would form input into public policy. He added that AIAE was committed to creating opportunities for positive contributions to overall economic development in Nigeria and African countries at large.
“AIAE is interested in knowing how the behaviour of the middle class could be used to improve on different policies and programmes of the government. The institute will weave the ideas together to form synthesis and opinion about where the middle class belongs in the next few years. It is an intellectual framework between social and economic studies,” he said.
In their various contributions, the select stakeholders drawn from several fields of profession, including economics, public relations, media, academics, medicine, bankers, bureaucrats as well as business and women said that the emergence of the middle class in the scheme of things in Nigeria had shown that the group was ready to play a noble role in nation building. Though the participants at the workshop concurred that definition of middle class was ambiguous, the group (middle class) could be seen as a class of people in the ‘middle of societal hierarchy’.
According to the participants, the middle class has re-emerged in Nigeria and the major factors that characterise the inclusion of anybody in the class are income, education, social networking and professional inclination, lifestyle, expenditure and consumption patterns and employment. The experts hinted that the middle class which constitutes the civil societies (CSOs), the non-government organisations (NGOs) and other voluntary organisations, remained the building blocks all over the world, and, therefore, called on the government to take advantage of their contributions in delivering dividends of democracy to the citizenry.
The stakeholders said that the role of the middle class in Nigeria’s democratic process had culminated in free, fair and credible elections. They unanimously challenged the Federal Government to reciprocate this gesture by upholding good governance as regards maintaining relative peace in the Niger Delta, implementing the power blueprint, implementing the local content policies in different sectors, enhancing establishment of schools to create environment for skills development and improving technology development, among others, in the country. They called on those taking leadership positions in government to sustain the current tempo in Nigeria, which they believed would take the country to higher level.
Friday, June 3, 2011
Issues relating to the growth of agriculture to achieve food security and boost foreign exchange earnings have been in the front burner in recent times. Professor Eric Eboh, President of the Nigerian Agricultural Policy Research Network (NAPRNet), in this interview at recent the National Symposium on Agriculture, spoke on efforts made to have food sufficiency in Nigeria.
Why are you holding this symposium at this crucial time in Nigeria’s history?
We (NAPRNet, AIAE & IFPRI-Nigeria) are very deliberate to host this symposium at this auspicious time of transition to a new democratic dispensation beginning May 29, 2011. From our viewpoint, this time of transition should be devoted to deep reflections about how to correct our past mistakes and set the country’s agricultural sector on the right path. This is a critical step to pushing forward our ambition to rank as one of the topmost 20 economies by the year 2020 (just nine years from now).This reflection is needed, at least, about the agricultural sector whose economic potentials have for a long time been held down by policy and institutional weaknesses and structural distortions.
Within the context of having reflections for the emergence of a new agricultural sector landscape for Nigeria under the new democratic government, this symposium is designed to rally experts and practitioners on the important question of optimising the interface of agricultural research, agricultural policy and agricultural enterprise for sustainable growth and food security. It creates an opportunity to share research information and to synthesize informed and experiential perspectives on innovative and best practices for linking research, policymaking and private enterprise. The quality and diversity of the participants in this symposium underscore our desire to galvanise critical thinking among the relevant experts in public and private sectors and thereby enhance the constituency for agricultural research for economy and society.
In your speech, you mentioned that NAPRNet was formed about 18 months ago, what is the basis for forming it and what is its vision?
Bridging the gap between agricultural research and policymaking is one of the principal reasons for the formation of the Nigerian Agricultural Policy Research Network (NAPRNet) in November 2009. Within its vision to be an authoritative and independent forum for promoting research for evidence-based agricultural and rural development policies in Nigeria, NAPRNet’s mandate is to facilitate the conduct of research as well as the communication and utilization of research results in the agriculture and rural development policy process in Nigeria. For research to have desired impact, it should produce useable results, which should be communicated in such a manner that promotes its use on a sustainable basis. Research should be relevant, available, accessible and useable.
On the other hand, prospective users of research results should have capacity and orientation to digest, absorb and utilize research results (information, products or innovation), whether for policymaking, programme planning, monitoring or enterprise production. In line with these desirable ends, the objectives of NAPRNet include to promote the exchange of existing research information, mobilize a pool of financial resources for independent policy research, encourage mentoring of upcoming policy researchers, provide peer review for researchers, create channels for linking research with policy process, and facilitate the use of research results in the policy process.
You just mentioned the need for all hands to be on deck for Nigeria to achieve Vision 2020, how could this be realised through agriculture?
First and foremost, we are convinced that this symposium will produce concrete ideas and recommendations for making our agricultural research a real catalyst for agricultural development. Our conviction is vindicated, because in the course of planning for this event, we had interactions with stakeholders and most of them repeatedly pointed to the fact that our chosen theme is very germane in our current and future efforts towards sustainable economic development.
In particular, the responsibility for agriculture-driven economic transformation has been highlighted by the Nigerian Vision 20:2020 and the First Vision 20:2020 Medium-Term Implementation Plan 2010-2013. The responsibility is being currently pursued within the context of the National Agricultural Sector Strategy and the National Agricultural Investment Plan.
At the heart of these interlinked policy and strategy frameworks is the need to harness the power of agricultural research to drive agricultural productivity, competitiveness and sustainability. Today in Nigeria and indeed for a long time into the future, the success of agricultural sector policies and plans will be benchmarked against the extent to which we push down farm-level and agribusiness costs, upgrade farm productivity and at the same time improve the quality of and value addition to agricultural products. None of these can be achieved without getting right our research links with enterprise and without ensuring that public agricultural policies and spending decisions are informed and guided by good science.
As a researcher and policy analyst, you have said several times that there is need to link research outputs with policy making. How can this be achieved in the agricultural sector?
Given the lingering gaps between agricultural research and policy making, and agricultural research and private agro-enterprise, NAPRNet is advocating for some kind of more proactive research results vendor or broker system. The proposed national agricultural research results vendor will connect systematically with the producers and users of research. It will perform the critical complementary marketing, communication and promotional functions that are outside the traditional domains of research institutions. If it is well implemented in terms of ownership, financing and responsibility assignment, such a mechanism could positively transform the landscape for the utilisation of research results in the country.
This is the reason why we consciously included the Federal Ministry of Agriculture and Rural Development, Agricultural Research Council of Nigeria, Directors of National Agricultural Research Institutes, Permanent Secretaries or Directors in State Ministries of Agriculture and Programme Managers/Managing Directors of State Agricultural Development Programmes as well as agricultural practitioners (farmers and agribusiness people).
Given the setting of agricultural research in Nigeria, these actors play crucial respective roles in the production, communication and utilisation of agricultural research. The rare assembling of these key agricultural research stakeholders provides an excellent opportunity for stock-taking, experience sharing and mutual learning. It is therefore important for us to candidly address the questions about what is working and what is not working regarding our present research models of research influence on policy and enterprise. We also need to explore lessons and insights from other countries and identify key elements that can be suitable and useful for our institutional environment. We should not lose this golden platform to intensify the agenda and reinvigorate the processes for enhancing agricultural research and its impact on agricultural development in Nigeria.
What would be the next phase after this symposium?
NAPRNet is considering working with other stakeholders to set in place some kind of mechanism to monitor and report periodically on the status of links between agricultural research and policy making in Nigeria. The mechanism may take the form of an ‘Agricultural Research and Policy Observatory’, whereby there will be an ongoing system to track research developments, highlight success stories, identify challenges and disseminate best practices for making research work for the users.
Governors of the South Eastern states have approved the initiative aimed at formally establishing the South East Nigeria Economic Commission (SENEC). Governors Peter Obi of Anambra, Sullivan Chime of Enugu, Theodore Orji of Abia, and Ikedi Ohakim of Imo State, with their respective secretaries to the state government, appended their signatures to the Memorandum of Understanding (MoU) signalling the commencement of the operations of the commission.
The Chairman of the SENEC Steering Committee, Engineer Chris Okoye, also signed the document.
The overall goal of the commission is to serve the purpose of facilitation of investments in the South East zone, development of large physical infrastructural schemes, implementation of programmes for sustainable institutions, creation of centres for human capacity building development, development of coordinated framework for the formulation of public policies and plans. The SENEC Initiative is a product of the recommendations of the stakeholders forum on industrial clusters held in September 2006 in Enugu under the auspices of the African Institute for Applied Economics (AIAE).
The Institute in January 15, 2007 initiated the process by constituting an interim steering committee to midwife the establishment of SENEC. Based on feedback and revisions, the subcommittee published the draft framework document; worked on the MOU, which has now become operational tool for the Initiative.
A release issued by Mr Sola Oluwadare, the Communications and Relations Manager of AIAE, stated that the MOU is a base document to guide stakeholders in the zone to decide the character, structure and functions of the Commission. Oluwadare added that the document now lays out the strategic framework in terms of context and rationale, international best practices, relevance and impact of the Commission, and has therefore become a working tool.
AIAE spokes person quotes the Executive Director of the Institute; Professor Eric Eboh as saying the endorsement of the MOU has made the Institute to fulfil its niche objective of fostering the utilization of research based evidence for policymaking.
Eboh said, “In taking the opportunity to facilitate the creation of the South East Nigeria Economic Commission, AIAE has demonstrated a high level of corporate social responsibility, geared towards impacting its immediate economic environment. The array of positive feedback and commentaries recorded in the course of preparing the Memorandum is vindication of the timeliness, relevance and prospects of the initiative.”
Oluwadare, in the release noted that the governors unanimously appreciated the noble role AIAE played in facilitating the establishment of SENEC, and commended the Institute for taking the lead in forming the rallying point for, “parties that are desirous of creating and modelling a joint independent agency of the five cooperating south east states, the private sector, the civil society and the entire people of the zone’s.
Quoting copiously from the MOU, the release said, “The Parties appreciate that South East Nigeria Economic Commission Initiative grew out of successive policy dialogues facilitated by the African Institute for Applied Economics (hereinafter called AIAE) under the platform of Enugu Forum, a Development Policy Forum of private sector, civil society groups and individuals devoted to evidence based debates for sound public policies, and particularly the recommendations form the Stakeholders Forum on Industrial Cluster in south east Nigeria organised in 26th September 2006 in Enugu
To boost the industrial development of the south east states of Nigeria, its Governors have endorsed the take off of the South East Nigeria Economic Commission (SENEC) to midwife the initiative.
A Memorandum of Understanding (MOU) to this effect was signed by Governors Peter Obi of Anambra State, Sullivan Chime, Enugu State, Theodore Orji, Abia State, and Ikedi Ohakim, Imo State with the respective secretaries to the state governments. The Chairman Steering Committee of SENEC, Engineer Chris Okoye, also signed the document.
SENEC Initiative is a product of the recommendations of the stakeholders forum on industrial clusters held in September 26, 2006 in Enugu spearheaded by the African Institute for Applied Economics (AIAE). The Institute in January 15 2007 initiated the process by constituting an interim steering committee to midwife the establishment of SENEC. Based on feedback and revisions, the subcommittee published the draft framework document, worked on the MOU which has now become operational tool for the Initiative.
According to a release by Mr. Sola Oluwadare, the Communications and Relations Manager of AIAE, the MOU is a base document to guide stakeholders in the zone to decide the character, structure and functions of the Commission.
He added that the document now lays out the strategic framework in terms of context and rationale, international best practices, relevance and impact of the Commission, and has therefore become a working tool.
The major goal of SENEC, Oluwadare stated further, is to serve the purpose of facilitation of investments in the South East zone, development of large physical infrastructural schemes, implementation of programmes for sustainable institutions, creation of centres for human capacity building development, development of coordinated framework for the formulation of public policies and plans.
The AIAE spokesperson quoted the Executive Director of the Institute; Professor Eric Eboh as saying that the endorsement of the MOU has made the Institute to fulfil its niche objective of fostering the utilization of research based evidence for policymaking. Eboh said, “In taking the opportunity to facilitate the creation of the South East Nigeria Economic Commission, AIAE has demonstrated a high level of corporate social responsibility, geared towards impacting its immediate economic environment. The array of positive feedback and commentaries recorded in the course of preparing the Memorandum is vindication of the timeliness, relevance and prospects of the initiative”.
Oluwadare, in the release noted that the governors unanimously appreciated AIAE’s role in facilitating the establishment of SENEC, and commended the Institute for taking the lead in forming the rallying point for, ‘parties that are desirous of creating and modelling a joint independent agency of the five cooperating south east states, the private sector, the civil society and the entire people of the zone.
Governors of the South east states have approved the initiative aimed at formally establishing the South East Nigeria Economic Commission (SENEC). Governors Peter Obi of Anambra State, Sullivan Chime of Enugu State, Theodore Orji of Abia State, and Ikedi Ohakim of Imo State with their respective secretaries to the state government appended their signatures to the Memorandum of Understanding (MoU) signalling the commencement of the operations of the Commission.
The chairman of the SENEC Steering Committee, Mr Chris Okoye also signed the document. The overall goal of SENEC is to serve the purpose of facilitation of investments in the South East zone, development of large physical infrastructural schemes, implementation of programmes for sustainable institutions, creation of centres for human capacity building development, development of coordinated framework for the formulation of public policies and plans.
SENEC initiative is a product of the recommendations of the stakeholders forum on industrial clusters held in September 2006 in Enugu under the auspices of the African Institute for Applied Economics (AIAE). The Institute in January 15 2007, initiated the process by constituting an interim steering committee to midwife the establishment of SENEC. Based on feedback and revisions, the subcommittee published the draft framework document, worked on the MoU which has now become operational tool for the Initiative.
A release issued by Mr. Sola Oluwadare, the Communications and Relations Manager of AIAE, stated that the MoU is a base document to guide stakeholders in the zone to decide the character, structure and functions of the Commission.
Oluwadare added that the document now lays out the strategic framework in terms of context and rationale, international best practices, relevance and impact of the Commission, and has therefore become a working tool.
AIAE spokes person quotes the Executive Director of the Institute; Professor Eric Eboh as saying the endorsement of the MoU has made the institute to fulfil its niche objective of fostering the utilisation of research based evidence for policymaking.
Eboh said: “In taking the opportunity to facilitate the creation of the South East Nigeria Economic Commission, AIAE has demonstrated a high level of corporate social responsibility, geared towards impacting its immediate economic environment. The array of positive feedback and commentaries recorded in the course of preparing the memorandum is vindication of the timeliness, relevance and prospects of the initiative”.
Oluwadare, in the release noted that the governors unanimously appreciated the noble role AIAE played in facilitating the establishment of SENEC, and commended the institute for taking the lead in forming the rallying point for parties that are desirous of creating and modelling a joint independent agency of the five cooperating south east states, the private sector, the civil society and the entire people of the zones.
The release stated: “The parties appreciate that South East Nigeria Economic Commission Initiative grew out of successive policy dialogues facilitated by the African Institute for Applied Economics (hereinafter called AIAE) under the platform of Enugu Forum. A development policy forum of private sector, civil society groups and individuals devoted to evidence based debates for sound public policies, and particularly the recommendations form the stakeholders forum on industrial cluster in South East Nigeria organised in 26th September 2006 in Enugu.
“The parties hereby agree to facilitate, support, encourage and participate in the establishment of SENEC as a modern private-public community platform to drive development and economic growth in the south east zone of Nigeria under a financing arrangement which may include finance or funds from state government, private sector, civil society and diaspora.
The MoU explicitly states that the document supersedes and replaces any such initiative that may have been carried out before now in the zone.
Eboh urged the stakeholders in the zone to join the institute in its quest to contribute its quota through robust development policy seminars from time to time, so as to sensitise all towards liberating the zone economically for the good of all. He said the zone currently lacks robust institutional framework to drive development of shared infrastructure for even development.“But with political will and cooperation of all the states in the zone, SENEC shall soon be a success story,” he said.
Compass newspaper, March 23. 2011
ENVIRONMENTAL economists have called on scientists to quickly devise ways to minimise the current effects of climate change or be ready for reduction in general quality of life. A research fellow in the African Institute for Applied Economics (AIAE), Mr. Emeka Celestine Nzeh, and an Extension Specialist II of the Centre for Entrepreneurship and Development Research (CEDR) of the University of Nigeria, Nsukka, Mrs. Rita Ogugua Eboh, said that the scientific community must be involved in studying climate change and forecasting weather, and then transmitting this information to all sectors of the society, industry and economy so that these sectors can adapt and be ready to meet a very different future than the present.
The duo who are currently carrying out research work on ‘Technological Challenges of Climate Change Adaptation in Nigeria, Insights from Enugu State’, being coordinated by the African Technological Policy Studies Network (ATPS), said in their interim report that a heavy dependence on agricultural and forest resources in Enugu State, especially in local communities, and a dependence on environmental-unfriendly energy sources call for universal public awareness and public policies, without which adaptation to the change may be affected.
The report revealed the low-lying nature of Nigeria’s 800 kilommetres coastline, which makes it prone to coastal erosion and flooding, all of which are climate change-induced forms of land degradation.
It added that in the Sahelian zone of Nigeria’s North, the most pronounced climate change-related forms of land degradation are wind erosion and related sand dune formation, drought and desertification.
In addition, sheet erosion–which results in the complete removal of arable land–is Nigeria’s biggest threat to agriculture, especially in the sandy soil regions of South-Eastern Nigeria, where Enugu state is located.
The researchers called on government and stakeholders to increase public awareness so that human activity which is one of the causes could be tailored towards reducing the effects. The report stated that, “Human activities are probably what drive both land degradation and climate change. Deforestation, for example, a human activity, is a well-known factor causing land degradation by erosion.
Nigerian Tribune. March 21, 2011
A research fellow in the African Institute for Applied Economics (AIAE), Mr. Emeka Celestine Nzeh and Mrs. Rita Ogugua Eboh, the Extension Specialist II, Centre for Entrepreneurship and Development Research (CEDR), University of Nigeria, Nsukka, made this submission in their current research on technological challenges of climate change adaptation in Nigeria; insights from Enugu State.
The research, spearheaded by the African Technological Policy Studies Network (ATPS) Phase VI Strategic Plan, 2008 to 2012, noted that ‘’extreme weather events such as thunderstorms, heavy winds, and floods, which are all signs of climate change can devastate farmlands and lead to crop failure’’.
They said pests and crop diseases migrated in response to climate variations and potentially posed a threat to livestock.
“Food security is vulnerable to extreme weather events such as drought and floods. When the Sahelian zone of the country suffered drought in the 1970's and 1980's, harvest failure was remarkable throughout the region. Close to one million livestock were lost, affecting meat and dairy supply throughout the country. Flood hazards in both the north and south of the country consistently posed a danger to farmlands and hence, to food security,” the report stated.
On the consequences of the phenomenon in Enugu State where the research was carried out, the report said indicators of land degradation due to climate change were already apparent in Nigeria especially in communities of the state. It stressed that deforestation, characterized by quickly disappearing forest cover, “is one symptom made worse by human intervention.” The report further revealed that ‘’changes in temperature, rainfall and water cycle dynamics can induce other problems.’’
It said: “Changes in climatic conditions in Enugu State also modify tree growth and development, reducing the availability of non-timber forest products such as spicy vegetables and mushrooms. Climate change equally increases the incidence of pests and diseases that attack and decimate forest trees.
“It can lead to species extinction in the various ecozones of Nigeria and Enugu State; for example, the Iroko and oil bean in the South-East; various Mahogany species in South-West; the baobab and the locust bean in the North West; gum arabic in the North-East; and the list goes on”.
On the level of awareness and adaptation to the changes, the researchers noted that individuals and communities in state had adopted some behaviours or policies geared at restoring and conserving the environment
The Nation. October 7, 2010
A report by the African Institute of Applied Economics (AIAE) has revealed that the business environment in Nigeria is challenging due to insecurity, but noted that, different aspects of the business environment have recorded different levels of progress. The report also rated Ekiti State as the most secure business environment while Abia State was rated the most risky.
The Executive Director, AIAE, Mr. Eric Eboh, revealed this in Abuja while presenting to the public, its findings forum the Business Environment and Competitiveness Across Nigerian states (BECAN).
Eboh pointed out that the creation and sustenance of a conducive business environment is critical to the attainment of key economic and development targets under Vision 2020 and Medium-Term Implementation plan (2010-2013) .
These targets among others, include growing the economy by 11 per cent per annum from 2010-2013, up from seven per cent annual growth recorded from 2004-2009, increasing the size of the economy from the present N24 trillion to about N50 trillion in 2013; increasing GDP per capita from the present $1,100 to about $2,000 in 2013, and creating two million new jobs every year from 2010-2013.
His words: "The major challenge in the business environment discovered by the finding has been insecurity; it has dragged down the performance aggregate of business environment in Nigeria.
It means that governments across the country should take concerted steps to improve security in Nigeria because security lapse is a threat to investment as well as business and where businesses and investment are threatened employment would suffer and poverty will increase. There is an organic link between the business environment and what happens to poverty and what happens to employment.
"From our findings in the BECAN research, there have been some improvements in the regulatory services across the states, infrastructure and utility have also improved but the major challenge in the business environment discovered by the finding has been insecurity."
He noted that from the research "the over-all aggregate business environment index is less than 50 which is not healthy for the country. In terms of percentage it is not a very good score, though there is large scope for improvement. The various stakeholders should take opportunity of this evidence which is being aggregated state by state. Ekiti State is rated best in security score board in business environment while Abia is rated the last among the 36 states of the federation".
Eboh, while noting that the challenge in the research is lack of administrative data at various levels, stressed that "ministries and departments in various states are supposed to keep data of their activities, of their procedures, but these data are lacking, where they are available they are not adequate and they are not well organised, that was an important challenge. We had to use our innovation to get the states to produce the data".
However, Eboh, asserted that to achieve these economic targets requires the right business environment to nurture competitive and dynamic private sector.
"There are three pillars of a good business environment: macroeconomic and political stability, efficient and reliable infrastructure, institutions and regulatory services; and skilled, dynamic labour force," he said. "Over the past six years, Nigeria has witnessed improved macroeconomic and growth performance. But, the performance has not translated into desirable levels of employment creation and poverty reduction.
"The reason is poor business environment which has held down the growth and competitiveness of the private sector. The harsh business environment, adversely affects everyone - people, businesses, investors (domestic and foreign), managers, communities and groups.
"A good business environment entails well-functioning, efficient and effective public infrastructure, institutional systems and regulatory services. The direct impact of a bad business environment is three fold: high cost of doing business, great difficulty of doing business and high unpredictability of business prospects," he stated.
He, therefore, called on the state governments to use the opportunity of the research to start addressing the data bank at the state level by improving the statistical capability of the ministries and the planning commission."We just used four benchmarks in the area of security: major crime, minor crime, police coverage and perception and our data are from police records from Nigerian police headquarters", he explained.
Nigerian Tribune. September 27, 2010
Despite macroeconomic and growth improvements in the past six years, poor business environment has remained the principal drag on employment creation, poverty reduction and largely, the reason why the Millennium Development Goals (MDGs) has not been achieved. The harsh business environment in Nigeria adversely affects everyone – people, businesses, investors (domestic and foreign), managers, communities and groups.
On the average, news about Nigeria are typically negative. Despite the country's problems, it has proven to be a magnet for companies and investors. Its natural resources, skilled workforce and robust economy make it ideal for investment. Unfortunately, underdeveloped infrastructure and other attendant factors frustrate business activities. Nevertheless, investors continue to see profits in Nigeria. A good business environment entails efficient and effective supply of public infrastructure, institutional and regulatory services. This is a primary responsibility of the government. Nevertheless, the private sector and civil society have important roles which include advocating for public accountability in the provision of these services.
Based on a research done by the African Institute for Applied Economics, there has been general improvement in Infrastructure and Utilities and Regulatory Services, but the situation of Business Development Support and Investment Promotion and Security has weakened.
The World Bank in the recent report of Global Doing Business noted that the Nigerian economy, despite its need for investment, has one of the most unfriendly business environments in the world.
With the legendary infrastructural failings in the country, entrepreneurs have to contend with rather basic issues which are effectively provided by government and therefore taken for granted in other countries. The absence of facilities such as electricity, water, roads, and good security make the operation of business in Nigeria frustrating. The Nigerian business environment has been described by some stakeholders as repelling investment initiatives. This explains why the much talked-about foreign investment drive has achieved only but a measly result.
What should attract an investor, who, when he comes, becomes a government by providing all the basic amenities otherwise taken for granted in other countries. Apart from lucrative industries like the oil and gas, the government has done little, so to say, to make other sectors of the economy attractive.
The thrust of BECANS
Working with stakeholders to benchmark and monitor the business environment, the motive behind the Business Environment and Competitiveness Across Nigerian States (BECANS) programme initiated by the AIEA, has yielded the a benchmark which can be used to measure the Nigerian business environment. The overall goal of the BECANS is to promote evidence-based reforms of the business environment in Nigeria, with focus on the sub-national jurisdictions.
Like every federation, the responsibility for shaping the business environment in Nigeria is shared between the federal, state and local governments. The logic of BECANS is that state and local governments are crucial in ensuring good business environment and enhancing Nigeria's global economic competitiveness. State and local governments have foremost responsibility in providing and managing basic public services and utilities such as roads and public transportation systems, water and sanitation and social welfare. State governments are also responsible for the bulk of business regulatory services including property registration, tax administration, industrial and enterprise zones, contract enforcement, justice administration, business and construction licensing. So, without commensurate business environment reforms by state and local governments, the macroeconomic and institutional reforms of the federal government cannot produce the desired impact on employment and poverty.
Tools and benchmarks
The BECANS model defines sub-national business environment along four dimensions. They are Infrastructure and Utilities; Regulatory Services; Business Development Support and Investment Promotion; and Security. These dimensions are called BECANS benchmarks. The overall measure of the quality of business environment is the business environment index of Nigerian States (BEIONS). The BEIONS uses a continuous scale from 0-100, where a score of 100 represents the maximum score. The business environment index is a weighted aggregate of scores on the four benchmarks. The weights are as follows: Infrastructure and Utilities (28%); regulatory services (30%); business development support and investment promotion (20%) and security (20%). Every benchmark is divided into measures which are further subdivided into evaluative indicators. Infrastructure and utilities has 5 measures and 22 indicators. Regulatory services benchmark has 5 measures and 27 indicators. Business development support and investment promotion has 5 measures and 14 indicators. Security benchmark, 4 measures and 12 indicators. Altogether, the Business Environment Index of Nigerian States (BEIONS) is based on 19 measures and 75 indicators.
The general Business Environment Index is lower in BECANS-II than for BECANS-I. While this might suggest that the business environment across the states has not generally improved since 2007, the performance across individual benchmarks and across states is rather mixed. The general performances on the two benchmarks - Infrastructure and Utilities and Regulatory Services - are higher than those for Business Development Support and Investment Promotion and Security. In fact, the relatively lower all-states average Business Environment Index is accounted for by the lower performance on the two benchmarks – Security and Business Development Support and Investment Promotion.
Performance according to geo-political zones
The findings shows that since BECANS I in 2007, there has been general improvement in Infrastructure and Utilities and Regulatory Services, but the situation of Business Development Support and Investment Promotion and Security has weakened. South-West zone has the highest general performance on the Business Environment Index while the North-East zone has the lowest. Abuja FCT has the highest overall performance on the Business Environment Index, followed by Lagos State, while Zamfara State has the lowest.
South-West leads in infrastructure and energy
On Infrastructure and Utilities, the South-West zone has the highest performance on Infrastructure and Utilities, while the North-West zone has the lowest. The general performance on Energy is higher in BECANS-II compared to BECANS-I. The South-West zone has the highest performance on Energy, while the North-West zone has the lowest. The general performance on Water Supply is lower in BECANS-II compared to BECANS-I. The South-West zone has the highest performance on Water Supply, while the South-East-Zone has the lowest. The all-states average performance on Access to Information is lower in BECANS-II compared to BECANS-I. The South-West zone has the highest performance on Access to Information, while the North-West zone has the lowest. Abuja FCT and Anambra State tie as highest performers on Access to Information, while Yobe State has the lowest performance. The all-States average performance on Transportation is lower in BECANS-II compared to BECANS-I. The North-East zone has the highest performance on Transportation, while the North-West zone has the lowest. The general performance on Social Infrastructure is higher in BECANS-II compared to BECANS-I. The South-West zone has the highest performance on Social Infrastructure, while the North-West Zone has the lowest. Oyo State has the highest performance on Social Infrastructure, while Zamfara State has the lowest.
Improvements in North-Central and North-East
Compared to BECANS-I (2007), Regulatory Services improved slightly with respect to Business Registration, Administering Taxes and Fees and Commercial Dispute Resolution but went down on Land Registration. The North-Central zone has the highest overall performance on Regulatory Services, while the North-East zone has the lowest. The North-East zone has the highest performance on Administering Taxes and Fees, while the South-West zone has the lowest. Benue and Adamawa States have the first and second highest performance on Administering Taxes and Fees, respectively while Anambra State has the lowest.
The All-States performance on Commercial Dispute Resolution is higher in BECANS-II compared to BECANS-I. The South-West zone has the highest performance on CDR, while the North-East zone has the lowest. Abuja FCT has the highest score on Commercial Dispute Resolution, followed by Lagos States, while Edo State has the lowest. The general performance on Land Registration is lower in BECANS-II compared to BECANS-I. The North-Central zone has the highest performance on Land Registration while the South-South zone has the lowest. Abuja FCT has the highest performance on Land Registration, while Zamfara and Rivers States tie as lowest. The performance on fiscal management and public procurement is 31.08%, indicating that the states are generally weak in fiscal management and public procurement.
Lagos, FCT, outshine others in commercial dispute resolution
The all-States average score on Business Development Support and Investment Promotion is lower in BECANS-II compared to BECANS-I. This shows that institutional support for business and investments has generally weakened since 2007. While the performance on entrepreneurship promotion and access to finance has improved, those for investment promotion and support for industrial parks has weakened. The South-South zone has the highest performance on Business Development Support and Investment Promotion, while the North-East zone has the lowest. Lagos State has the highest performance on Business Development Support and Investment Promotion while Kebbi State has the lowest performance.
The South-West zone has the highest performance on Entrepreneurship Promotion, while the North-West zone has the lowest. The South-West zone has the highest performance on Access to Finance, while the North-East zone has the lowest. Lagos State has the highest performance on Access to Finance, followed by Abuja FCT. Ebonyi and Bayelsa States have the lowest performance.
The South-West zone has the highest performance on Investment Promotion, while the North-East zone has the lowest. Cross River State has the highest performance on Investment Promotion, followed by Abuja FCT. The other relatively high performers on Investment Promotion are Oyo, Ondo, Niger and Lagos States. The all-states performance on Support for Industrial Parks is lower in BECANS-II compared to BECANS-I. This shows the poor condition of industrial parks throughout the states. Lagos State has the highest score on Support for Industrial Parks, followed by Kano and Cross River States. The general performance on Public-Private Partnership is lower in BECANS-II compared to BECANS-I.
This generally poor performance is underpinned by the lack of distinct legal and policy frameworks for public-private partnership across the states.
The all-States average performance on Security is lower in BECANS-II compared to BECANS-I. This shows that there has been a general deterioration in security since 2007. The North-West zone has the highest performance on Security, while the South-South and South-East are the least performing. The North-East zone has the best performance with respect to perception on security, while the South-East Zone has the lowest.
How has Nigeria fared?
The asymmetry in performance of states and Abuja FCT across the three levels of measurement - benchmarks, measures and indicators – implies that states have varying strengths and weaknesses. No state or zone is the best-performing all-round (that is across all benchmarks, measures and indicators); neither is any state or zone the least-performing all-round. Also, the results reveal those business environment spheres where individual states are improving since 2007 and where they are not.
Whichever situation any state is mirrored by this business environment scorecard, there is an important lesson to be gained. Whether the purpose of the state is for own-monitoring and peer review with others, there is a large scope for the scorecard to serve as the basis of mutual learning and self-improvements among the states. Among the common challenges across the states are energy, transportation, land registration, fiscal transparency and public procurement, support for industrial parks and public-private partnership. The wide disparity between states in performance across the benchmarks and measures indicate a large scope mutual learning, particularly in the areas of land registration, commercial dispute resolution and entrepreneurship promotion.
If the good performances observed in some states were to be replicated in other states, the business environment will be significantly brightened. The evidence is clear. Hypothetically, if all states were to perform at the level indicated by the best performing state across all the benchmarks, the all-states average performance on the business environment index would jump from 45.43%to 68.45%. In the same vein, if every state performed at the level of the highest scoring state across the respective measures under Infrastructure and Utilities, the all-States average score would jump from 51.06% to 88.64%. Furthermore, if every state performed at the level of the highest scoring state across the respective measures under Regulatory Services, the all-States average score would jump from 45.48% to 79.17%. Applying the same logic to Business Development Support and Investment Promotion, the all-States average score would jump from 33.48% to 80.67%; and then from 49.43% to 94.17% for Security. This analogy reveals the extent to which the business environment could be transformed if all the 36 states were to implement needed reforms.
This publication should become the basis for business environment reforms in the respective states and Abuja FCT. Private sector and civil society organizations should utilize the evidence to dialogue and advocate for a better business environment. State governments should see the performance assessments in terms of opportunities and challenges to make their jurisdictions more business-friendly.
The African Institute for Applied Economics (AIAE), an independent and international research institution has concluded plans to launch the second circle of the Business Environment and Competitiveness Across Nigerian States (BECANS) on September 23, in Abuja.
BECANS is the comprehensive report of the research conducted on the critical factors that influence business environment in Nigeria. A statement from the Communications and Relations Manager of AIAE, Mr Sola Oluwadare, said the report would give concise national outlook of states’ performance on benchmarks and measures which include infrastructure and utilities, regulatory services, business development support and security.
The National Forum on Business Environment is an integral component of the Business Environment and Competitiveness across Nigerian States (BECANS) programme.“The Forum will feature the public presentation of the Business Environment Report on Nigerian States and Abuja, FCT, a flagship publication under the BECANS programme. Also, the Forum serves as an international platform for evidence-based dialogue and information sharing on the business environment in Nigeria, from the looking glass of state-level evidence”, he said.
AIAE had in August 2007 launched the first circle which was widely received and supported by the government and business community in Nigeria, especially the Organised Private Sector (OPS).
According to him, the forum will draw a wide range of stakeholders and participants from ministries, departments and agencies of the federal and state governments and Abuja, FCT, private sector and civil society including research community and Non Governmental Organisations (NGOs), international development agencies and the diplomatic community will also attend.
THE African Institute for Applied Economics (AIAE) has congratulated Chief Kola Jamodu and Mr John Isemele as the new president of the Manufacturers’ Association of Nigeria (MAN) and the new Director-General of the Nigeria Association of Chambers of Commerce, Mines, Industry and Agriculture (NACCIMA) respectively.
The positions, according to a statement by the AIAE’s Communication and Relations Manager, Mr Sola Oluwadare, are well deserved and will, no doubt, take the two leading private sector organisations to the topmost status in their quest for enabling business environment in Nigeria.
It statement stated that the institute believes that the duo will use their wealth of experience to lift these public advocacy organisations to fulfil the aspiration of their teeming members across the country.
AIAE is an independent, international research institute devoted to economic research towards promoting evidence-based decision making through sound analysis of socio economic issues, facilitation of policy dialogue and private sector development activities.
Oluwadare said the combined efforts of the Organised Private Sector (OPS) and economic research institutes would go a long way to create wealth from which the government could generate revenue; minimise the problem of unemployment, reduce poverty and insecurity in our society.
"We, therefore, pledge to work hand in hand with the new NACCIMA DG and MAN president in strengthening this noble course in Nigeria and indeed the continent of Africa.
"We want to state categorically that our research reports on the second circle of the Business Environment Across Nigerian States, (BECANS II) which will soon be presented to the public would go a long way to help the twin organisations and other members of OPS to attain their quest for a sustainable business environment in Nigeria", he noted
The institute’s spokesperson said there is need for a virile private sector to make our country a respected member of the comity of nations, saying AIAE shall continue to join hands with all the stakeholders in our advocacy to foster a conducive environment for the private sector to play the role expected of it in the realisation of the Nigerian vision and renascent Africa.
Worried by the poor handling and implementation of national budgets, Nigeria’s Fiscal Responsibility Commission (FRC) said in Abuja on Sunday that it has contracted a team from the African Institute of Applied Economics (AIAE) to study and review government’s budget implementation in the country in the last five years.
Dr Aliyu Yelwa, the Chairman of the Commission, said the team managed by the AIAE was to examine the country’s past budget experiences which had been deficient in the last five years with a view to addressing it. APA learns here that the 2010 national budget of about US$290 billion is still in the mill at the National Assembly undergoing changes and amendments caused by the executive, less than five months to the end of the fiscal year. According to him, the country’s budget implementation experience from 2005 is nothing to write home about as results are usually not there while improper budgeting had also been the case. He said the team would look into budget experiences in the last five years in various government offices in the country with a view to ensuring full budget implementation.
“The law establishing the commission mandates us to undertake studies on the economy and financial situation in the country and to disseminate such information to the public,” Yelwa said. He, however, said that there was a need to learn from the country’s negative budgeting experiences and proffer ways of making the budget work for its development. To achieve this, he said that cash flow and financial management in the country should be understudied. He added that the government at all levels should consult the people before drafting any budget as the people were entitled by law to make input into the budget. He said that it was unfortunate that “year in year out, budgeting ritual goes on in the country with nothing commensurate to show for it, as the results are, to say the least deficient”.
Yelwa noted that sometimes the government plans to carry out some development projects, but never got to implementing them and warned : “We should stop taking Nigerians for granted. They should be carried along during budget preparations and outcome of the budget determined by what the people want.
African Institute for Ap-plied Economics (AIAE) has condemned the abduction of the Lagos State Chairman of the Nigerian Union of Journalists (NUJ), Mr Wahab Oba; Zone G Secretary of the union, Adolphus Okonkwo, the Assistant Secretary, Sylva Okereke, Shola Oyeyipo and their driver, Azeez Abdulrauf.
AIAE, in a statement signed by Mr Sola Oluwadare, the Communications and Relations Manager, decried the incident, calling on the Federal Government to wade into the issue and ensure that the men are released with immediate effect.
The release stated further that it was high time the government tackled the menace, especially in the South-East, before it escalated into a major crisis.
He urged the government to particularly pay attention to proffering a workable policy of employment of youths because "an idle mind is the devil’s workshop". Oluwadare said: "The Policy Think Group of our Institute is already preparing to rub minds and present a position paper to the government on how to craft a policy on unemployment in the country so that our youths can be gainfully engaged.
"AIAE joins forces with NUJ and empathizes with the family members of the kidnapped journalists and believes that the Federal government and the governments of Imo,Abia and Akwa Ibom states will see to it that the men are released without further delay."
Also, the Institute stated in its research findings as contained in first cycle of Business Environment Across Nigerian States (BECANS I) that crime and insecurity are threats to social and economic life; adding that an insured business environment deters investors, entrepreneurs and mangers.
The men were reportedly kidnapped on Sunday in Ukbariki, near Aba in Obingwa Local Government Area of Abia State while returning from the NUJ National Executive Council meeting in Uyo, Akwa Ibom state capital.
THE African Institute for Applied Economics has canvassed the strengthening of the Community Directed Intervention (CDI) in the provision of health care facilities and services in different communities in Nigeria and other African countries.
A statement by the Institute’s Communications and Relations Manager, Mr Sola Oluwadare, stated that the position was taken by the stakeholders who converged at the Development Policy Seminar (Enugu Forum) organised by the institute recently.
The theme of the seminar held at Bridge Waters Luxury Suites, Enugu, attracted several practitioners in the health sector, community leaders, academics, government functionaries, technocrats and researchers.
The forum was chaired by Dr. Uzochukwu, a Fellow of the West African College of Physicians and Consultants and Public Health Physician of the University of Nigeria Teaching Hospital.
In his welcome remarks, the Executive Director of AIAE, Prof. Eric Eboh, said the forum is a civic platform for informed and evidence-based debate about public policy options and development issues.
He added that the seminar is composed of an alliance of like-minded Non-Governmental Organisations (NGOs), Private Sector Organisations (PSOs) and professional groups, an interactive forum for public policy dialogue among stakeholders and an opportunity for interaction between researchers, policymakers and development practitioners among others.
Eboh disclosed that the theme was chosen to underscore AIAE’s commitment to influencing the government’s policy through evidence based policy debate, "and the place of health policies as they affect the community is of great importance to us."
If Nigeria wants to take economic diversification seriously, the country must separate its budget and financial system from oil price benchmark syndrome, the Executive Director of African Institute for Applied Economics (AIAE) has said.
Speaking yesterday in Abuja at the public presentation of the book: “The Global Economic Crisis and Nigeria; taking the right lessons, avoiding the wrong lessons,” the director said the oil benchmark syndrome confers a mentality of overdependence on the oil sector.
He said: “The oil benchmark mentality does not give the right national mindset for the much needed economic diversification. Time has come to consider some form of decoupling or debugging of the government budget and public finance from the oil benchmark syndrome.”
He expressed concern over the rising domestic debt profile as well as rising physical deficit as can be seen in the 2010 budget that has been passed by the National Assembly.
“These are areas of concern and we think that steps should be taken to watch these trends particularly the depletion of the excess crude account between 2006 to 2009. These important signs needs to be watch by stakeholders so that we are sure that we are on the part of sustainability,” he said.
He said that whatever measures that the country is taking to curb with the aftermath of the economic crisis should not undermine the basis for long time economic sustainability.
He said the book that was presented is a fall out of his institutes last year’s symposium in collaboration with the National Assembly Policy Analysis and Research Project on the Global Financial Crisis and Nigeria.
He said the book is designed to benefit different segments of the society, adding that it shows evidence to inform and influence economic policies.
Franca Ochigbo, Abuja
The African Institute for Applied Economics (AIAE) has urged the Federal Government to utilize opportunities presented by the global crisis in addressing the country’s poor economic status.
The Director, AIAE, Eric Ego disclosed this during the public presentation of the book, ‘The Global Economic Crisis and Nigeria in Abuja, stating that Nigeria had earlier been warned by renowned economists from the institute and beyond to look beyond nominal fiscal and budgetary consequences of the global crisis and consider the deeper implication for sustainable economic growth.
He said, “Nigeria’s economic vulnerability is further underscored by the global crisis, not enough advantage has been taken of the opportunity, which the crisis presents for addressing the country’s poor economic fundamentals.
“At the core of Nigeria’s weakness is low productivity and competitiveness of the non-oil sector occasioned by poor business environment, low quality of public spending and the generally poor economic governance.
“The signs of economic stress have lingered. And there is no clearly defined trajectory or life cycle of existing policy responses. For example, the depletion of the excess crude account to offset shortfalls in oil benchmarked government revenues of the three tiers of government has continued.
“And the prospects point to further depletion. In recent years, domestic debts have risen asymmetrically to growth performance. Federal Government’s domestic debt has almost doubled between 2006 and 2009. State governments are accumulating domestic debts through bond issuance.
Christopher Adedeji, Abuja
AFRICAN Institute for Applied Economics (AIAE) has said the Federal Government must separate the nation’s budget and financial system from the oil price benchmark if it desires success of its planned economic diversification drive.
Executive Director of the institute, Eric Eboh, said in Abuja that the oil benchmark mentality does not give the right national mindset for the much needed economic diversification, arguing that time has come to consider the “decoupling or debugging of the government budget and public finance from the oil syndrome.”
Speaking at the launch of a book, ‘The Global Economic Crisis and Nigeria: Taking the Right Lessons, Avoiding the Wrong Lessons”, Eboh said the oil benchmark syndrome confers a mentality of overdependence on the oil sector.