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Nigeria: A Chance for Re-Awakening

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By Austin Okere

By March 2020, it had become very clear that COVID-19 was a global pandemic. The news media was awash with a shock announcement by the Central Bank of Nigeria on her exchange rate policy; “In what can be regarded as an unexpected yet positive move, the Central Bank of Nigeria (CBN) on Friday moved the official exchange rate from N307/US$1 to N360/US$1.

At the Investors and Exporters Window (I & E), the CBN also adjusted the NGN peg upwards by 5.7%, as it raised its intervention rate to N380 from N366.” this caption was Dateline Mar 24, 2020 on Nairametrics.com.

I wrote this article three years ago on January 20, 2017, after a sharp drop in Oil prices – and surprised how relevant it is even today. What was our experience as a country, what did we learn from it and how is it that we have once again been caught desperately unawares?

Why can’t we fix our educational system and send our children to schools here? And fix our hospitals and treat our sick here, instead of our notoriety as big spenders on medical tourism?

Nigerians are gradually coming to terms that the cheese has indeed moved this time. The days of lucre and easy money, fuelled by petrodollars are far behind us; no thanks to shale oil and other sources of energy.

The aimless swagger has been replaced by a renewed sense of purpose and the need to produce in order to survive. No wonder Agriculture seems to be the only game in town these days. To borrow from the words of Pravin Gordhan, Finance Minister of South Africa, it is now Agri-Cool. All manner of yesterday’s nose thumpers now proudly call themselves farmers; it is beginning to have a nice ring and tone to it.

Unlike other oil boom and busts, it seems that this particular bust is here to stay. We seem to be in a stalemate. If we cut production to shore up prices, the shale producers will seize the opportunity to increase their own production and drive the prices right down. Not to talk of the conscious global effort towards cleaner renewable energy, and the significant improvement in its technology and adoption. COP 21 in Paris cemented the commitment to clean environment and green energy.

Time there was not too long ago in Nigeria, when first class and business class seats on commercial airlines were filled way before economy seats, and private jets littered all our airports.

But how did we get here and how did we subsequently fall from such deluded Olympian heights? The recurrent mistake we keep making as a nation is failing to anticipate and plan for our oil windfalls. There have been many boom opportunities since Nigeria joined the Organisation of Petroleum Exporting Countries (OPEC) in 1971; Oil prices increased by 400% in six short months after the Yom Kippur War following the Arab Oil Embargo. Crude prices doubled from $14 in 1978 to $35 per barrel in 1981 following the Iran/Iraq war.

The price of crude oil spiked in 1990 with the uncertainties associated the Iraqi invasion of Kuwait and the ensuing Gulf War – the so called ‘Gulf War windfall’ under then Head of State Ibrahim Babangida. The report of the panel of enquiry headed by the eminent Dr. Pius Okigbo in 1994 was critical of the government’s role in mismanaging the $12.4b windfall. Perhaps most of it had gone with the wind.

Data from the U.S. Energy Information Administration shows that the latest windfall happened between February 2011 and August 2014, under the Goodluck Jonathan presidency, when oil prices were much in excess of $100 per barrel. Another golden opportunity was squandered, characterised by organised kleptocracy of epic proportions as has now come to light.

There is a saying in my native Igbo culture that an abomination that endures for long enough becomes part of the culture. Corruption came close to achieving this status in Nigeria.

Our inflated egos were matched with the adventure into GDP rebasing in 2014 which put Nigeria as the largest economy in Africa, overtaking poster boy South Africa. Alas this new status, propped up by an artificial exchange rate sustained by huge foreign reserves did not last. As the reserves dwindled, partial reality in the foreign exchange rate has wiped away close to half of the estimated $510b GDP, and along with it our bragging rights.

I say ‘partial reality in the foreign exchange rate’, because I still feel that a differential of over 60% between the official rate and the parallel rate to the dollar seems to suggest that one of the rates is way off the mark. The acute shortage of the ‘Official Dollar’ seems to suggest that the parallel rate is closer to the mark.

The thing about the market is that you can distort it for a while, but you cannot hold it back for long. The market is like water; it will always find its level.

The earlier we let this happen the better for our economy. Within the period of a decade, I have witnessed the British pound at close to £1 to $1.9 and now as low as £1 to $1.22; and yet the British government is not scrambling to shore up the pound by all means (including expensive subsidy of the currency).

It should be understood that such distortions open huge arbitrage opportunities for those with access, which distract from productive pursuit. Rent seeking from allocation of dollars creates a new crop of overnight billionaires akin to those created during the era of petroleum subsidy. In the long run, it blows no good wind.

I have always argued that more important than the exchange rate, is the stability of the rate, which removes uncertainty, and attracts investment.

As it is, we are inadvertently inviting more pressure on the naira because even locals are saving their money in dollars, albeit at zero interest rates. And why not? They have figured out that even at the relatively high interest rates on treasury bills and fixed deposits, savings are halved in real terms due to the fast deteriorating exchange rate of the naira.

We have to understand that the exchange rate is an indicator of the perception of performance, and opportunity in the economy. To shore it up you have to do the hard work of better economic management.

Removing the alert on the dashboard of your car that tells you that the oil level is low puts out the irritating light, but does not guarantee that the engine will not knock further down the road.

There is now a fervent glamour for buying Nigerian and growing what we eat. About time too. According to the Minister of State for Agriculture, Heineken Lokpobiri, Nigeria spends about $22bn annually on food imports. How can a country with a huge population of over 170 million people (a viable consumer market by any standard), squander such a whopping amount on imported food, and in the process export much needed jobs in the agriculture value chain? This is despite the huge fertile landmass and favourable climate?

It is no different in the Education and Health sectors. It was estimated that Nigerians studying in British and American Universities spent over N137billion on tuition and living expenses in 2014.

There were also about 71,000 Nigerian students who paid tuition fees in excess of N160billion in Ghana during the same period (these may have easily doubled in the past year due to the deteriorating foreign exchange rate). And yet the Nigerian Government’s total budget for education in 2017 is N540b (a paltry $1.1b against South Africa’s $22b)

Why can’t we fix our educational system and send our children to schools here? And fix our hospitals and treat our sick here, instead of our notoriety as big spenders on medical tourism?

I understand that luxury shop owners in Dubai and London are asking loudly ‘where are the Nigerians?’ Well, the Nigerians are at home, confronting the new realities of basic survival. You only have to look into the eyes of the average Nigerian to glean the pain of adjustment. This difficult period is too painful to waste. We must seize the opportunity of this painful reality check, for a reawakening and realignment towards doing the right thing. As Maria Robinson said “Nobody can go back and start a new beginning, but anyone can start today to make a new ending”. Let us begin today to write the ending we want for our country.

Austin Okere is the Founder of CWG Plc, the largest ICT Company on the Nigerian Stock Exchange & Entrepreneur in Residence at CBS, New York. Austin also serves on the Advisory Board of the Global Business School Network, and on the World Economic Forum Global Agenda Council on Innovation and Intrapreneurship. Austin now runs the Ausso Leadership Academy focused on Business and Entrepreneurial Mentorship


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NDDC Spent N15Bn on COVID-19 Palliative for Staff— MD

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Niger Delta Development Commission (NDDC), has reportedly spent some N1.5 billion on staff as ‘COVID-19 relief funds’.

NDDC Spent N15Bn on COVID-19 Palliative for Staff— MD

Kemebradikumo Pondei, acting managing director, made the investigative hearing on the N40 billion corruption allegation against the commission.

The Senate had on May 5 set up a seven-man ad-hoc committee to investigate the “financial recklessness” of the Interim Management Committee (IMC) of the commission.

The lawmakers said, within the last three months, the commission has spent over N40 billion of the commission’s fund ”without recourse to established processes of funds disbursement which has opened up further suspicion among stakeholders of the Niger Delta Region.”

They also faulted the IMC’s ”arbitrary use of executive power in an alleged wrongful sacking of management staff without recourse to established civil service rules and practice with the aim of allegedly concealing the fraudulent financial recklessness they have committed.”

Mr Pondei and other delegates from the commission appeared before the committee on Thursday for the hearing.

Part of the audit report read out by Olubunmi Adetunmbi, chairman of the committee, said N3.1 billion was spent as COVID-19 funds between October 2019 and May 2020.

In the report, the lawmaker said ”N10 million was paid to one person, N7 million to two people, N5 million to three people, 148 people took N3 million each, 157 people got N1.5 million each, 497 people got N1 million each and 464 people were paid N600,000 each.”

Another N475 million was given to the police to purchase face masks and hand sanitisers, he added.

Responding to questions regarding the COVID-19 Relief Fund paid to NDDC staff, the MD said ”only N1.5 billion was used to take care of staff” despite being paid their salaries.

He explained that part of the fund was for the youth of Niger Delta.

”The youth were given palliatives to help cushion the effect of the pandemic on the people. The youth were idle and to avoid violence, they were paid,” he said.

“Five million for youths and five million for women and five million for people living with disabilities in each senatorial district,” he said.

He said ”the remaining fund was spent on staff of the commission.”

“We used it to take care of ourselves. We are NDDC, we need to take care of ourselves too,” he said.

He further explained that the IMC inherited debts upon assumption of office ”that needed to be cleared on time.”

He said the previous management owed hotels and had unpaid electricity bills of about N26 million.

When asked why the police was given N475 million, Mr Pondei said a request was made from ”the high command of police and the management took a look at it and approved it.”

He explained that the money ”was an intervention and the NDDC is expecting a report as to how the money was spent.”

Meanwhile, Cairo Ojougboh, acting deputy director, projects, added that the money given to police is for nine states of the Niger Delta region.

The investigative hearing will continue on Friday, the chairman said.


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NIPOST Workers Threaten Strike Action over Stamp Duty

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Workers of the Nigerian Postal Service (NIPOST) have given 21 days for the federal government to intervene on the alleged “usurpation of her function and duties” by the Federal Inland Revenue Service (FIRS).

NIPOST Workers Threaten Strike Action over Stamp Duty

The workers under the auspices of Senior Staff of Statutory Corporations and Government Owned Companies (SSASCGOC) in Abuja Thursday, said printing of stamp duties by FIRS, a statutory duty carried out by NIPOST, is unacceptable.

Comrade Ayo Olorunfemi, general secretary of SSASCGOC, , told journalists in Abuja that the federal government must bring together all the stakeholders to resolve the issue to avert the industrial action at the expiration of the ultimatum.

Olorunfemi frowned at the situation whereby FIRS has decided to take over the production of stamps which led to many Nigerians to stop purchasing adhesive stamps from NIPOST.

According to him, the union may seek legal redress on the situation which he said could cause about 15, 000 workers to lose their jobs.

“To this end, we are calling on the federal government to facilitate an urgent meeting between NIPOST, FIRS, SSASCGOC, and other stakeholders in order to arrive at an amicable resolution. Failure to do this within 21 days from Thursday, July 9, 2020, we shall have no other option than to direct all our members in NIPOST to withdraw their services.

“It is very painful that while other nations are protecting and developing their postal services and making maximum use of the services for advancement, Nigeria is busy doing things that will kill its own.”


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Nigeria Develops Diagnostic Kit for COVID-19

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Nigeria’s efforts at developing solution to the challenge of non-availability and high cost of coronavirus diagnostic kits have finally paid off with the development of RNASwift Extraction kit.

Nigeria Develops Diagnostic Kit for COVID-19

This was disclosed by Prof. Alex Akpa, director-general of National Biotechnology Development Agency (NABDA), on Thursday during a news briefing held at the conference room of Federal Ministry of Science and Technology, Abuja.

He said the RNASwift test kit would not only revolutionalise Africa’s PCR-Based COVID-19 testing, but will also expand the capacity by 50 times at least.

Akpa also said it would equally reduce cost by over 500 per cent as compared to the conventional kit in use.

“This meets the demands of the Test Africa Initiative. The kits will be produced in Nigeria, which is great news considering that it will enable preference to be given to the testing needs of Africa.

“The need for the invention was conceived by the request from the Federal Ministry of Agriculture and Rural Development (FMARD), to test five million farmers and farm hands.

“This was to ensure that our food security chain was not compromised by COVID-19,’’ the D-G said.

According to him, the RNASwift test kit is an indigenous diagnostic test kit designed, developed and validated in Nigeria for the identification of the causal agent, SARS-Cov-2, which causes COVID-19.

He noted that the diagnostic kit is “very accurate and sensitive’’ and competes favourably with conventional and commercially available kits for the diagnosis of COVID-19.

“This is in addition to a careful choice of reagents that are human and environmentally friendly in the development of the protocol for the diagnostic kit.

“In fact, the attributes of the RNASwift kits make it a game changer in the design and production of diagnostic kits for infectious diseases in the face of an epidemic or a pandemic,’’ Akpa said.

He further said that the project was made possible due to the scientific collaboration between the NABDA, Nigerian Centre for Disease Control (NCDC), and Nigerian Institute for Medical Research (NIMR).

Prof. Akpa added that the technical support team of University of Sheffield, led by Dr Alison Nwokeoji, also made the project successful.

In his speech at the briefing, Dr Ogbonnaya Onu, minister of Science and Technology, recalled that the first index case of COVID-19 was recorded in Nigeria on Feb. 27.

Onu said he had tasked Nigerian scientists to come up with a solution with the sum of N36 million pledge.

The Minister said Nigerians were creative and talented enough to develop home grown solutions to major challenges confronting the country, Africa and the world, with the RNASwift test kit as an example.

“Today, the RNASwift extraction kit developed by Nigerian scientists has capacity in an accurate, sensitive and affordable cost to detect SARS-Cov2, the causative agent of COVID-19.

“With the RNASwift test kit, we are going to test five million farmers, and the new test kit will reduced cost drastically,’’ Onu said.

He hinted that the African Development Bank was interested in it, not only as Test Africa Initiative, but that Nigeria should be the rallying point.

Similarly, he said the other African countries stood to benefit from the test kits due to the low cost.

The minister commended NABDA and said the agency had not only made the Ministry proud but Nigeria as a whole.

Alhaji Sabo Nanono, minister of Agriculture and Rural Development, said the test kit invented and developed was very critical to the present situation of insufficient test kits.

He said the FMARD was in the forefront when it came to food security, adding that with the invention and successful validation of the test kit, it was time for Nigerians to look inwards.

“We have talents and we need to develop and build on these talents, we will realise our target of testing five million farmers and Nigerians would be proud of this test kits,’’ Nanono said.

He applauded NABDA for the project, saying the success of the test kit was a milestone recorded in the FMST.

Speaking to newsmen on the sideline of the briefing, Dr Rose Gidado, Scientist and Deputy Director at NABDA, said the day was remarkable and historic for the agency, the ministry as well as Nigerians.

She said the new test kits could test more than 20,000 people a day but if more testing centres were set up, it could go up to 50,000 with automation.

The Scientist added that the need to test more Nigerians was necessary in order to isolate and treat.

 

 


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