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Wednesday, 31 August 2016

... In an Economic recession,  it takes knowledge to survive.
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Monday, 29 August 2016


 That our economy is in recession has been established and the symptoms are crystal clear. I identified some of them last week. The question I believe that the government and the people of Nigeria must be asking is how do we recover from recession and restore growth to our economy?First, I believe that the bullish and reflationary 2016 budget( though some disagree that it is reflationary) was crafted with this in mind. The government clearly saw the direction the economy was going and decided to borrow to spend our way out of recession. With further decline in revenue the borrowing may be more than projected 2.2Trillion Naira if the budgeted goals must be achieved. But there are a couple of challenges. Are we actually able to find lenders within the time frame of Budget 2016?. How soon will the spending be done and how quickly will the impact be felt? . The rumored 'emergency powers' being sought by President Muhammadu Buhari must be directed to this end. If this is only to shorten procurement processes and allow virement of budgeted sums, I will support the move. But nothing more because I think the President already has enormous authority and discretion to fire the economy on all cylinders.
  We have long spoken about Agriculture as a major and present opportunity to grow and diversify our economy . Though we have largely been short in action for a long time, it must be admitted that some action was seen during the stewardship of Dr. Akinwunmi Adesina as Minister of Agriculture. He seemed to have pursued a lot of initiatives captured under the Agricultural Transformation Agenda( ATA). Agriculture was being projected as a Business, serious business, not a vocation,not a hobby. Visible efforts were made to show that Agriculture is not a business for the old, women and the uneducated but for young people as well. A crop of young people called Nagropreneurs were born and showcased. Several funding initiatives were opened by the Ministry and the CBN at single digit interest rate. What I can not vouch for, is the ease with which these facilities were accessed by the applicants. It has never been easy to borrow money in Nigeria from the banks, especially for the target prospects. Those who often benefit more from these schemes:  Operation feed the Nation, Green revolution ,NERFUND to the recent schemes such as Agricultural Credit Guarantee Scheme Fund( ACGSF), Agricultural Credit Support Scheme( ACSS), Commercial Agriculture Credit Scheme( CACS) etc, are usually emergency farmers and fly- by- night businessmen . Nevertheless we saw big investments into Agriculture by Dangote Group, Dansa, Teragro, Olam, Okomu, Presco in addition to the existing big farms such as Obasanjo Farms( Gen.Olusegun Obasanjo), Maizube Farms( Gen. Abdulsalami Abubakar),Sebore Farms( Vice Admiral Murtala Nyako), Anadariya Farms( Usman Dantata),Ojemai farms( Sir Joseph Arumeni-Ikhide), Jorama Farms(Arinze Onebunne ), Folawiyo farms ( Alhaji Wahab Folawiyo) ,Anuoluwa farms( Peter Adeniyi) and a few others.
  Recently, we have heard of the GREEN ALTERNATIVE AGRICULTURE PROMOTION POLICY- the new agriculture program launched by the present Government. The Agric Minister, Chief Audu Ogbeh, who is a reputed farmer has been speaking so passionately about this new programme in and outside the Country including in Kenya last week. We know it is not in the nature of Nigerian politics, for new regimes to continue with the projects or programs of the previous regimes( more so if they are from different parties), but our hope is that this new program is building on the platforms and successes already achieved. We do not have the luxury to reinvent wheels at this time, besides we do not have the money I think. But No matter the coloration of this new programme, five issues continue to doug Nigeria's agriculture .One is land tenure system and the ease of getting land for commercial Agriculture. The second is extension services and appropriate technology and expertise which are in very short supply these days. The third is related , that is the availability of seed stock and fast maturing species and access to affordable fertilizer. The fourth is access to capital that is friendly to agriculture. The fifth and perhaps most critical at this time is how to process the harvest through value addition to ensure preservation and higher returns. Most of our Agric exports are mere commodities with little value addition  that become easily susceptible to global market price volatilities. Many Agric enthusiasts have had their fingers burnt by watching their harvest spoil and lose value before they could get off-takers. Those are critical issues which the minister must focus all his attention to resolve if we must go beyond slogans and symbols.
  To be sure, the major economic challenge we have is not shortage of dollars or foreign exchange but low productivity. We export rubber and import tyres, export cocoa and import chocolate,export hides & Skin and import shoes & hand bags; export Crude oil and import PMS, DPK, DIESEL and JET A1. We still produce a lot of tomatoes but consume so much of imported Tomato concentrate and purée.Much of the packaged cashew nuts we buy from our supermarkets are imported, made from the raw cashew nuts we export. And because, the cost of buying a unit of the processed items is higher than what we earn from the export of the raw materials, we find that we are perennially short of forex. Therefore if I have one advice to give Nigeria as the surest way of working ourselves out of this recession and perhaps never to return to it again ever, it is to advocate a single minded focus on Manufacturing- Production through value addition. If our Country pursues a determined manufacturing policy, most of our current economic challenges - high unemployment, high inflation, high exchange rate etc will abate. 
  And that's why I think that the recent directive of the CBN to banks to allocate 60% of their foreign exchange to manufacturers is revolutionary. In my reckoning it is a better option than banning anything. Since we have proven incapable of enforcing bans and also because bans are becoming anathema in our current global market space, preferential allocation of foreign exchange to manufacturing operations represents one key way of incentivizing Manufacturing in our country at this time. If the Government follows this with other fiscal incentives like the Export Expansion Grant Scheme, then we may not only be promoting local manufacturing but also exports that will help diversify our national revenue sources, lessen our current over-dependance  on Crude oil while reducing foreign exchange scarcities and pressures in the long run.
   Of course, the challenge as always is how to enforce the directive. This is always our default line. Good policies, good intentions, good pronouncements and launching ceremonies but after that, the 'Nigerian Factor' steps in. I believe that the CBN will have to watch the backs of the banks and analyse their monthly returns and publications on forex utilization. The manufacturers themselves have to set up a mechanism to monitor weekly allocations and provide feedback to the CBN and to the People of Nigeria.  Also because emergency manufacturers will arise which will not be entirely bad, if only they will actually manufacture, Industry groups have to authenticate their memberships. To eliminate abuse by the Manufacturers themselves, because anything is possible in Nigeria, the CBN and the banks must ensure that the forex allocated  is used strictly to import manufacturing inputs ONLY and not finished goods or diverted to other uses. There are many smart Alec's around! . Additionally we must have a way of assessing the impact of this initiative to be sure it is achieving the intended objective.
  Let me conclude by saying that my normal preference is for a level playing field for all economic agents. I am usually for the free interplay of the forces of supply and demand to determine allocation of resources in a free market. But  given the perfect imperfection of our market and given our known penchant to follow the least line of resistance which makes us import what ever is importable including toothpicks, rubber toys and apples, it is justifiable to create a regime of preferences and discretionary allocation of scarce resources to force a behavioral change that could prove revolutionary if all the precautions are taken. We must work ourselves out of this crippling recession. And an undivided focus on Agriculture linked to manufacturing looks to me to be a necessary and viable policy option.
Mazi Sam Ohuabunwa OFR.

Tuesday, 23 August 2016


 Last week, I read the news that Nigeria has officially lost its position as the largest Economy in Africa,now humbled to the 3rd position, behind Egypt and South Africa. Our GDP climbed down from $ 568Billion in 2014 to $481 in 2015 and then $296B as at July this year.This is hardly surprising given the official massive devaluation of the Naira and the steady decline of the GDP from 2014, quarter after quarter till date. It has been established that our economy is in recession with evidence starring us all on the face. The macro-economy is in turmoil with inflation exceeding 17%, interest rate galloping ( 14% MPR) and the Naira depreciating everyday both at the interbank(N365/$) and the parallel market( N400/$). Companies are off loading excess staff to keep afloat, fuelling unemployment and underemployment which have reached 45% among the Youth, worsening poverty and social malaise. Nigeria's misery index has climbed to 47.7%, becoming the Country with the 5th highest misery index in the World for the first half of 2016.
After reigning for over 40 years as the biggest oil producer in Africa and the 6th largest in OPEC, we have been displaced by Angola and may go further down, despite the recent oil findings in Badagry-Lagos State, if the current militancy and sabotage across the Niger Delta is not fundamentally and amicably resolved. The frantic efforts to discover oil in the Chad Basin or the Benue Basin gives little hope as these areas may turn into theaters of militancy and sabotage as long as the current unhappiness and discord persist across the Nation.
 In politics, Nigeria's descent is palpable. Last week I was sad to see what was happening in the PDP. A second attempt to hold a National convention failed as the courts gave seemly conflicting judgements and typically the government choose which judgement to uphold in the most partisan manner, using the police to frustrate the convention. I was just hoping that President Buhari would rise above the pattern of using the State apparatus to frustrate the opposition . How mistaken I have been. The Government has been using the EFCC to terrorize and intimidate Governor Fayose, just because he is the only voice of opposition left, after Metuh and Femi Fani-kayode seemed to have been silenced. And we are just watching the escalation of impunity! Even in the ruling Party, the level of political conduct has left me perplexed . The effort to remove Saraki and Ekweremadu from the leadership of the Senate has virtually stiffened legislative productivity. And rather than abate, one Honorable?Jibrin is being used to destabilize the House of Representatives with tales of budget padding. Is there any consideration for the electorate or is it just about selfish partisan interests?
 I watched to see if under this government, our preparation for international sporting competitions would be any better. Painfully it has taken a turn for the worse. My heart ached when I saw our Rio Olympic team March pass in their sports attire instead of the National cultural dress but I got completely heart-broken to read last week, that their sports kits arrived just three days to the end of the games! What a National disgrace and embarrassment. I was told that Mikel Obi had to lend money to the Nigerian contingent to buy kits and other needed accessories to be able to take part in their scheduled sports.
Some times I think that we are past feeling shame. What is the change we are expecting? Simple administrative procedures and processes are mirred in obstinate bureaucracy all in the name of financial control. The date for the Rio Olympics was set several years ago and there was enough time to do all the controls and the treasury single accounting. To send our ill-prepared, poorly-equipped sportsmen to Rio de Janeiro without kits and money while expecting them to do miracles and beat well trained, well-equipped and well-motivated men and women from serious countries is clear manifestation of insanity. It has not been this bad for Nigeria in modern Olympic history. Thank God for the 'concessionary ' Diamond-priced Bronze medal  won by the Dream Team Six, Nigeria, the Giant of Africa's name would have been missing completely on the Rio Olympics medal table. We came 78th on the medal table, behind Tunisia & Egypt( 75th), Niger( 69th), Algeria( 62nd), Côte d'Ivoire (51st), Ethiopia(46th),South Africa( 27th) and Kenya( 16th). This should actually call for a national enquiry and mourning; instead I find our leaders smiling and going about their business as if this was not a national calamity.How I wish that President Muhammadu Buhari can do something to reverse this worrisome and unwholesome descent in every sphere.

Mazi Sam Ohuabunwa OFR 

Wednesday, 17 August 2016


 A couple of weeks ago we raised issues against the ill-advised order and threat issued by the Minister of Labour to the Banks to stop laying off excess staff or their licenses could be withdrawn. Some of us took great exception to what we believe was an unwarranted intervention of the government in purely private company affairs. We drew attention to the wrong signals that kind of action would give to the investing community, especially at a time one thought that Nigeria should be desirous of new investments. But recent happenings indicate that either our concerns fell on deaf ears or that we are mis-reading this government. We may actually be wrong in thinking that this government is interested in pursuing genuine private sector investment in the Nigerian economy at this time! Since according to this government "economic management is purely a government affair", we in the non- governmental sector may actually be wasting our time offering suggestions on how to bring our our economy out of the woods. God Help us!
  It looks to me that like the Nigerian Government wants to make Nigerian Banks parastatals of the Central Bank. Every day, we hear of new orders being issued to the banks by the CBN as if the Banks belonged to them. Unless things have changed, most of the Nigerian banks are private companies, only regulated by the CBN. Last week I read a story where the CBN was said to have issued directives that Bank officers must declare their assets. And I asked to whom? To the code of Conduct Bureau, to the CBN, to the shareholders or to the public?To be sure, I am for honesty and would wish that the banks are run by "angels" if possible. But that is what I wish for all other businesses and companies in the Nigerian economy. I will have no quarrel if the Company and Allied Matters Act (CAMA) stipulates that all CEOs, Directors, Management or entire staff of Registered entities be required to declare their assets even if publicly. But for CBN to be singling out Banks, is in my view an overreach of its regulatory mandate. It is also not a global best practice and could be a disincentive to investment. Our security agencies can always investigate any infringements, accusations or indictments, but to force everyone to declare their assets may be infringing on privacy and human rights.
   But my greatest distress last week came from the accusations by the office of the National Security Adviser (ONSA) and the Minister of Agriculture and Rural Development (MARD ). Both government agencies accused two fertilizer companies of sabotaging the Nigerian economy and undermining the National security. How? That they were exporting fertilizers and making fertilizers available to militants and terrorists to make explosives. Whereas I will not want to comment on the righteousness of the security accusations, I am puzzled that the ONSA will be making open accusations against these companies. In my view, if they thought or had suspicions that any of the fertilizer companies was involved in any criminal activity, they do not have to announce or issue threats. They should use their investigative machinery to establish the veracity and obtain evidence, and then arraign the affected company officials in court. It is then the Court that will determine culpability and dispense punishment according to the laws of the land.That is the way these kind of matters are handled in civilized jurisdictions. To make these kinds of weighty allegations concerning national security and just leave it hanging in the public domain does incalculable damage to both the Nation and the companies!
  But if I am careful in interrogating security accusations, I should not be that careful in asking to understand when exporting a product to attract sorely needed foreign exchange has become a crime against the economy? I am currently involved in a campaign to get every company operating in Nigeria to make effort to earn foreign exchange as a way to diversify our foreign exchange sourcing and helping to offset the major economic challenge of this time- scarcity of Forex, especially the US Dollar. It is this scarcity that has devalued our Naira making it exchange 400 to the USD in the parallel market last week. It is partly this massive devaluation that is driving inflation out of control, looking to exceed 17.5% at end of July. It is this scarcity that is making life miserable for many Nigerian companies. So what do I do with my campaign now that it has been dubbed an act of economic sabotage to export to earn foreign exchange?.You see why I think that we have misunderstood this government.
   As if these accusations are not bad enough to make investors in companies like Indorama Eleme Fertilizer and Chemicals Ltd to rethink their 1.5 Billion dollar( almost equal to the total Capital budget for the FGN in 2016) investment in their new ultramodern fertilizer plant with capacity to service both domestic and foreign markets, but could make them hold back the total projected investment of 4.2 Billion dollars by 2020.  The threat by the Minister of Agriculture to deal with the Fertilizer companies sounds similar to the one made by the Minister of Labour. And I am flabbergasted. Where are we heading to? I hope not back to 1978- the Indigenization era? God forbid! 
  Mazi Sam Ohuabunwa OFR  

Sunday, 7 August 2016


When all is said and done, Atiku Abubarkar , former Vice President, is easily one of the most sophisticated politicians in Nigeria. He is also one of the most experienced, and perhaps since MKO Abiola, one of the most cosmopolitan politicians in Nigeria with tentacles and connections across the length and breadth of Nigeria. Particularly, he seems to be one of the most prepared political leaders of this Nation after the first generation political leaders like Zik, Awolowo and Sir Ahmadu Bello. But since Nigeria's democratic top political leadership seems to often go to the most unprepared, Atiku has been a serial Presidential aspirant, forcing him to criss-cross carpets  so often. But to be sure Atiku remains an important constant in contemporary political equations of our Country.

 If he has not yet made a great success of his political ambition to lead the Nation at the highest level, he has shown great success in his business pursuits and is actually perceived as a very successful business Man with deep pockets. He has also been able to shrug off accusations of Corruption, coming out from several accusations and investigations smelling fresh.For me, I am most impressed with what he has done with the ABTI American University of Nigeria in Yola. The quality of training of the students and the skills of the graduates ,I am told, is globally- competitive. Though I have often been disappointed with his penchant to switch parties, I have been intrigued with his often clear headed understanding of the Nigerian political situation.

   But his recent statements concerning Nigeria have begun to strike the right chords that tickle me. When I read what he said at the launch of the book" We are all Biafrans" in Abuja a few months ago, I was definitely taken aback. Against the background of the stout opposition to the issue of restructuring Nigeria by many of the Northern political elite and also the deafening silence of his party- APC on this vexed subject, it was refreshing to see a man,break ranks and courageously stick out his neck and address the issue of the critical challenge facing Nigeria. At that time, I heard speculations that Atiku was positioning for 2019! Well I went back to review some of his other less publicized statements in the recent past and noticed there was some consistency in his view of how to make Nigeria a truly united, stable and prosperous Nation.  When last week I read his speech this time addressed to the Northern political elite at an event commemorating the death of late General Hassan Usman Katsina, former military Governor of Northern Nigeria at the Murtala Square in Kaduna, I broke out into a brake dance. In this very memorable speech, Atiku made very critical points, much of which are in line with my thinking and writings . First he boldly justified why Nigeria must be restructured to restore peace and stability to the Nation. Second he tried very hard to convince the Northern political elite that they should not fear restructuring Nigeria and that they should stop opposing this critical inevitability, because to continue to do will continue to give credence to the widely held view that it is only the North that is benefitting  from this inverted and unstable federation. He supported this argument by showing how things were better for the whole North during the Regional government of the 60's as against the current situation where most of the states had become almost insolvent and unable to deliver very simple services to the people. Third, he asked the North and by extension the entire Nation to begin to look at Nigeria beyond oil and that for several reasons the days of hydrocarbons or fossil fuels were counted. We should rather focus on Education to produce Skills that will drive Agricultural Value chains, Solid minerals exploitation and industrial out put, citing how Nations like Japan and Singapore have succeeded without much of Natural resource endowment. Fourth he asked us all to forget the "resource control" mentality as that will not help us to compete in the 21st Century global economy. We should focus on attracting investment, creating value and funding government through taxation.

   Fifthly and perhaps most appealing to me is his admonition that National integration and unity can not be wished for only but must be deliberately pursued. His point that that you can not tell a man who says he is feeling pain that he is not , but rather you need to find out what is causing the man's pain and possibly offer him remedies, resonates very strongly with me. Furthermore he argue's that discriminating against citizens of Nigeria on the basis of State of Origin, rather than emphasizing State of residency is a recipe for the continued lack of unity and patriotism. I have repeatedly made this point which has now become obvious to most objective Nigerians, North or South, Christian or Muslim that this government is not consciously building a united Nation. Rather we are arming Nigerians to go and kill Nigerians as a way of forcing unity. I fully agree with Atiku that this will not work. As I am writing this piece, I am reading a story of Nigerian soldiers being killed in Niger State, close to Abuja by armed militants. Who are these Armed marauders? Are they Boko Haram terrorists or Niger Delta Militants? What of the carnage going on in the lagos- Ogun axis?  Is it truly caused by the same Niger Delta Avengers operating in Bayelsa and Delta states? Nigeria has never been this disunited and insecure since the civil war ended!

  Sixthly, Atiku's final admonition to the northern political elite is direct and poignant. The North should be at the table where the restructuring of Nigeria is being discussed and negotiated. They must not allow the restructuring to be foisterd on them. In his estimation, the restructuring will happen sooner than latter and it is better done peacefully around a table than when it is forced by circumstances  beyond anybody's control. Whatever may be Atiku's motivation ( political or altruistic )for providing this wonderful treatise and speaking boldly and directly to our Northern compatriots, I stand with him.

   Mazi Sam Ohuabunwa OFR 

Friday, 5 August 2016


  I have been on vacation in the United States of America( USA) in the last couple of days and have been sucked in by the elaborate process of Presidential primary elections which culminated in the Republican National Convention, a week earlier and the Democratic National Convention last week. The two conventions produced billionaire Donald Trump and Former Secretary of State and former First Lady Hilary Rodham  Clinton as their respective presidential candidates to stand for the November Presidential elections. The Democratic convention was particularly electrifying. I was completely blown by the testimony of former mayor of New York City, billionaire Michael Bloomberg who literally called Donald Trump a Con man. That was the most devastating blow and seemed to persuade me that Hilary Clinton may be on her way to making multiple history. She already made one as the first woman to be nominated as a Presidential candidate by a major political party in the USA. She had bettered her 2008 effort, when she was beaten by Barack Obama and has risen above the efforts of Sarah Palin and Michele Bachmann, two women who had made serious bids for presidential nominations in the recent times. Hilary Clinton has broken the political ceiling !
  All over the World, women are breaking political ceilings and a very interesting trend seems to be emerging. Last year, one of the worlds most conservative countries when it comes to gender discrimination- Saudi Arabia allowed women to vote for the first time in municipal elections. In the 2016 Forbes list of the World's 100 most powerful women, 26 of them are political leaders. Indeed the  the top three are political leaders. The first is Angela Merkel, German chancellor, who controls the $3.3 trillion German GDP and the defacto leader of the European Union, influencing the $16.2T EU GDP, followed by Hilary Clinton who in my view is likely to become the 45th President, and the first Female President of the USA. Third on the list is Janet Yellen, the US Federal  reserve Board Chair.
 On the list are several women who now govern their countries as Presidents or Prime Ministers- Park Geon-hye, President of South Korea;Tsai ling-wen, President of Taiwan; Sheikh Hasina Wajed Prime Minister of Bangladesh; Bidya Bhandari, President of Nepal; Dalia Grybauskaite, President of Lithuania;  Ameenuh Gurib-Fakim, President of the Republic of Mauritius; Ellen Johnson Sirleaf, President of Liberia; Nicola Sturgeon, First Minister, Scotland;Michelle Bachelet- two-time President of Chile and of course the oldest of them all Queen Elizabeth 11,Monarch of the UK. Not discounting Dilma Rouseff, the suspended Brazilian President who is under impeachment trials.
  What is more remarkable is that the top Western Nations of the World-USA, Germany and the UK may now be led by women. Last June, following the Brexit debacle that saw the premature end of David Cameron's tenure as Prime Minister of UK, Theresa May became the Prime Minister of the UK, the second woman to achieve that feat. The first being Margaret Thatcher( 1925-2013) who was the Conservative party leader from 1975-1990 and served as the first female UK Prime minister from 1979-1990. Theresa May who was the Home Secretary from 2010 to 2016 is following in the foot steps of Margaret Thatcher  becoming Conservative party leader as well as Prime Minister.  So if Hilary becomes the next US Presiedent, then the triangle is complete.
  In addition to being heads of States or Prime Ministers, women are occupying other top political positions in the World. Elvira Nabiullina is the Governor of the Central Bank of Russia.Yes Russia!, while Nemat 'Minouche' Shafik is the Deputy Governor of the Bank of England; Sheikha Lubna Al Qasimi is the minister of International cooperation and Development, the United Arab Emirate( UAE). Yes UAE!; Aung San Suu Kyi is the State Counselor, Myanmar and Frederica Mogherini is the High Rep of the EU for foreign affairs and Security policy. Three Justices of the US Supreme Court who are female and Samantha Power, US ambassador to the UN all made the Forbes list of the 100 most powerful women in the World.
  In Nigeria, the lot of Women in political leadership reached a peak during the tenure of President Good luck Jonathan who gave a lot of opportunities for women to be elected or appointed to top political positions, achieving the 30% mark in the Federal cabinet. Even in the judiciary we had women leading the Federal Court of Appeal and the. Supreme Court. President Buhari seems not to be so inclined with only about three female ministers in his cabinet. Nigeria is yet to have a female State Governor, not to talk of Vice President or President. But with the current global  political ascendancy of women, it may not be too long for women to achieve such positions in Nigeria.
  Globally, what does this trend portend for world economy and World Peace? Looking at the performances of Pace setters like Golda Meir(1898-1978), Indira Ghandi( 1917-1984), Corazin Aquino( 1933-2005),Benzair Bhutto( 1953-2007) and Margaret Thatcher( 1925-2013), two trends  emerge. First is the pursuit of Freedoms and World Peace. From Golda Meir to Indira Ghandi to Corazin Aquino, these Female Political leaders left a legacy of fighting for equality, freedom and peace. Then the legacy of Margaret Thatcher is economic reform, renewal and growth. Thatcher brought economic liberalization to the UK. So for a world threatened by global terrorism and economic turmoil, may be it is about time the women took over the heights of  World's political leadership. Therefore Hilary Rodham Hilton will have my vote onNovember 8. That is if I am eligible to vote . Whatever, please join me in raising a toast to our Women for the giant strides they have made in wrestling  significant political positions from men. May be our World will be the better for it!
Mazi Sam Ohuabunwa OFR