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  • Don’t de-industrialize Nigeria- CPPE warns FG on the 2023 Fiscal Policy Measures

    Don’t de-industrialize Nigeria- CPPE warns FG on the 2023 Fiscal Policy Measures

    The Centre for The Promotion of Private Enterprise (CPPE) has called on the Federal Government to reconsider some of its stance in the 2023 Fiscal Policy Measures.

    According to the statement signed by the Director, Dr. Muda Yusuf, “Some tax and import duty provisions in the 2023 Fiscal Policy Measures of the federal government would significantly hurt the economy and worsen the de-industrialization worries in the Nigerian economy. The construction and transportation sectors are also vulnerable to fiscal policy induced downside risks.

    Some of the measures could exacerbate inflationary pressures which are detrimental to economic growth and manufacturing, construction and transportation sectors.  It is double whammy for economic players to contend with a regime of high import duty, prohibitive tax rates amid a depreciating currency. Fiscal policy measures must seek to ensure a good balance between objectives of revenue generation, boosting domestic production, enhancing the welfare of citizens, promoting economic growth, deepening economic inclusion, facilitating job creation and recognizing societal ethos, beliefs and values.”

    Specific reviews of the new fiscal policies are as follows:

    EXCISE DUTY ON BEVERAGE, DRINKS, WINES .

    The fiscal policy measures imposed the following rates:

    • Non-Alcoholic Beverages, Fruit Juice, Energy Drink Excise: Duty of N10 per liter
    • Beer And Stout: 20% Ad valorem Tax; N75/Litre
    • Wine Production: 30% Ad Valorem; N75/Litre
    • Spirit and other Alcoholic Beverages: 30% Ad Valorem; N150/litre

    It should be noted that Ad valorem tax is based on the value of the product, which makes the impact even more injurious to industrialists.

    Sustaining current investments in these sectors would be a herculean task. These policy measures failed to reckon with the multifarious challenges which industry operators are currently grappling with, some of which include the following.

    • Weak and declining consumer purchasing power.
    • Naira exchange rate depreciation which is taking a huge toll on cost of production.
    • High energy cost
    • Multiple taxes and levies already being imposed on the industry players.
    • Risk to jobs in the sector and its extended value chain including millions of MSMEs in its distribution and marketing chain.
    • Downside risk to manufacturing sector outlook in the Nigerian economy.

    IMPLICATIONS FOR THE SECTOR AND THE ECONOMY

    • Drop in sales for investors in the sector
    • Negative effect on tax revenue from the sector.
    • Loss of direct and indirect jobs which could be in a couple of millions.
    • Millions of farmers supply local inputs such as grains to the sector may lose their livelihoods.
    • Risk of decline in profitability and shareholder value.
    • Elevated risk of smuggling of the products.

    40% IMPORT DUTY ON VEHICLES 

    It is difficult to justify this high import duty on vehicles for the following reasons:

    • The Nigeria is about 90% dependent on road transportation which underscore the importance of motor vehicles in the economy.
    • There is an increasing affordability problem for citizens with regard to vehicle acquisition, especially by the middle class of the Nigerian society.
    • Cost of locally assembled vehicles are beyond the reach of most Nigerians, contrary to the assurance given by government at the inception of the auto policy.  
    • There is limited access to credit for vehicle purchase by Nigerians. Over 90% of purchases are done out of pocket, which is extremely challenging. And where the credit facilities exist, the interest rates are outrageous, between 25-30%.
    • The economy has experienced huge exchange rate depreciation which had already exacerbated vehicle acquisition cost in the first place.

    It is therefore insensitive of policy makers to impose a whooping 40% import duty on vehicles in an economy where there is no mass transit system and where vehicle ownership has become a necessity, especially for the middle class.

    There is an additional 2% and 4% green tax, depending on the engine capacity of the vehicle. This translates to import duty of 42% or 44% depending on the engine capacity of the vehicle.

    IMPLICATIONS ON THE ECONOMY AND THE CITIZENS

    • High transportation cost as vehicles costs increases.
    • Risk of increased vehicle smuggling, especially in the light of porous borders.
    • The number of rickety vehicles, especially commercial buses will remain high as replacement cost becomes prohibitive.
    • The middleclass will continue to contend with affordability problems.

    IMPORT DUTY OF 45% ON IRON AND STEEL PRODUCTS

    The country is currently contending with high cost of construction of both public and private properties.  Infrastructure costs have also become very exorbitant. Housing deficit is still very high.  It is therefore difficult to justify this high import duty on a major input of construction industry.  Some of the implications of the high tariff on iron and steel include the following:

    • Increase in cost of housing construction.
    • Increase in the cost of infrastructure projects.
    • High and increasing risk of building collapse because of the prohibitive cost of construction materials.
    • High risk of smuggling of iron and steel products.
    • High risk of false declarations and collusion with governed operatives at the ports.
    • The high tariff is detrimental to the construction industry.

    TAX ON DOMESTIC WINE PRODUCERS

    The local wine industry is already under tremendous from imported wines, which are largely smuggled. With a 30% Ad Valorem tax and a specific tax of N75/litre, most wine industries operating in the country may have to shut down.  It is ironic that rather than support local wine producers to be more competitive and create more jobs, the government has opted to impose even higher taxes on them.

    The immediate risk is that the domestic wine market would be taken over by imported, and mostly smuggled wine.  Ultimately, the Nigerian economy, domestic investors in the sector and the employees of these firms would be the victims of this policy.  The government would also suffer revenue loses because smugglers do not pay tax as they operate in the underground economy.

    The story of producers of spirits and alcoholic beverages is not different from that of the domestic wine producers.

    TOBACCO INDUSTRY

    Tax on tobacco industry was reviewed. New tax is 30% Ad Valorem; N8.20k per stick. There are two main issues with the tobacco sub sector which pose a policy dilemma. There is the morality of tobacco production, and there is the economics of it.  There is consensus that smoking is dangerous to health.  In recognition of this, companies producing it are already mandated to inscribe this on their product packages. Advertisement of tobacco products is already outlawed in Nigeria.  And smoking in public places is prohibited by law. There are many other stringent restrictions, including a subtle stigmatization of smokers.  But strangely, all of these have failed to deter smokers, not just in Nigeria, but across the world. It is an addiction issue.  It is therefore in order to continue to take steps to discourage smoking.

    However, we should avoid extreme measures which may put the industry at the risk of extermination for the following reasons:

    • There is the risk that the cigarette market would be completely taken over by smuggled tobacco products which are completely outside the radar of regulatory and revenue authorities.  A large underground cigarette economy would be inadvertently created which would be more damaging to the health of citizens and the economy. We need to reckon with the reality of our porous borders.
    • Loss of thousands of direct and indirect jobs being currently generated by the domestic tobacco industry. 
    • Heightened risk of abuse of alternative drugs which may be more damaging than tobacco.

    Meanwhile, we need to reiterate that this position is not anyway an endorsement of cigarette smoking; it is a risk management proposition while the campaign against smoking is sustained.

    • The truth is that tobacco products produced in the country is a lesser evil than the ones smuggled into the country which are completely outside any regulatory oversight.
  • Feature: Tourism Programme for the President-Elect

    Feature: Tourism Programme for the President-Elect

    By Ayo Akinfe

    I am yet to hear Tinubu say one word about tourism so would like to see him cobble together a $20bn programme that looks something like this

    [1] Eyo Festival in Lagos. Why should it not compete with London’s Notting Hill Carnival?

    [2] Usman Dan Fodio’s tomb. Let us try and make it a pilgrimage site for African Muslims that competes with the Kaaba

    [3] Samuel Ajayi Crowther’s tomb. It should be a Christian pilgrimage site that competes with Bethlehem’s Church of the Nativity

    [4] Badagry’s slave castle. That city desperately needs its own railway station, hotels, restaurants, cafes, bars, etc

    [5] Lokoja’s confluence status should be made as attractive a tourist destination as Canada’s Niagara Falls

    [6] Sambisa Forest should be turned into a folklore destination similar to General Custer’s Battle of the Little Big Horn

    [7] One of our northern Durbars should emerge as the primary one. Maybe the Kano one given the economic importance of the museum. It should compare with say the Rio carnival

    [8] I would build an unprecedented one mile long aquarium across the River Niger between Illah in Delta State and Nzam in Anambra State. Make it the world’s first river crossing aquarium with accompanying shopping centres, hotels, cafes and bars

    [9] Obudu Cattle Ranch is already doing its bit but we need to build on this. Why not build a world class casino there and try and make it Africa’s Las Vegas

    [10] For me, Taraba is Nigeria’s most beautiful state. Its Gashaka Wildlife Park is the closest thing we have to the Serengeti. We should cordon off about half of the state and turn it into a haven for lions, elephants, giraffes, hyenas, leopards, impala, zebra, buffalo, warthogs, etc. If properly run, Taraba State alone should generate more revenue for Nigeria than crude oil

  • MAN reacts to the newly released 2023 Fiscal Policy Measures and Tariff Amendments

    MAN reacts to the newly released 2023 Fiscal Policy Measures and Tariff Amendments

    The Manufacturers Association of Nigeria (MAN) has carefully studied the newly released Fiscal Policy Measures for 2023 by the Federal Ministry of Finance, Budget and National Planning, following the approval by President Muhammadu Buhari. 

    The increases in Excise tax for 2023 and 2024 as provisioned in the said 2023 Fiscal policy, came as a surprise to us because, as a major stakeholder, MAN had actively participated in the deliberations on the proposal and presented various positions from its members across all sectors, especially those directly impacted by the proposed measures.

    What are the Issues?

    From the meeting held with the Honourable Minister of Finance, Budget and National Planning on the 29th March, 2023, MAN representatives were informed that the 2023 proposals on additional Excise tax increases were being stepped down until further consultations on the 2023 Finance Bill. Additionally, Nigeria Customs Service was notified by the Federal Ministry of Finance vide Memo Ref. No. F. 17417/351 of 15th February 2023 that the existing Fiscal Policy Measures for 2022 as they relate to Alcoholic Beverages and Tobacco Products will take effect from 1st June 2023 and 1st June 2024 as approved in the 2022 Fiscal Policy Measures roadmap for 2022 to 2024.

    Based on the above, MAN members had finalized their annual strategies and projections while exporting members had concluded pricing negotiations for orders to the end of fiscal period, on the strength of the agreed excise roadmap and recent assurance from the fiscal authority. 

    The release of the 2023 Fiscal Policy Measures, just over one month to its expected implementation date and the end of the current administration, sends negative signals to the business community locally and internationally with implications for existing and potential investors.

    It is worrisome that the current situation is indicative of inconsistency in Government policy, given that industries that are affected by excise tax administration, already made 3-year strategic plans based on the agreed calendar as scheduled in the roadmap including domestic and export sales prices, revenue and volume projections, tax burden calculations, etc.  This in our opinion, may create credibility issues for the country with existing and potential investors, impacting Foreign Direct Investments (FDI) and the country’s Ease of Doing Business index among other implications.

    It is therefore alarming and concerning that the implementation of the 2022 to 2024 approved excise roadmap, as contained in the 2022 Fiscal Policy (which commenced on 1st June 2022) has unfortunately not even been implemented for up to one year, before Government decides to ‘shift the goal post’. This was done without any consultation on or assessment of the impact of the huge increases, which in some cases are up to 50% on ad valorem and 75% on specific duty rates, over and above the already approved high increases of up to 50% and 45% respectively. Ironically, based on data from our members, Government is unlikely to earn more revenue from further excise increases due to significant decline in sales by companies in the sector, yet the new policy is likely to fuel illicit trade, industry recession, capacity underutilization, layoffs, etc. The unilateral action by the Government despite the complaint and persuasion by stakeholders for the fiscal authority to consider the consequence on the industries, businesses and the economy as a whole is quite unfortunate.

    The Implications of the Increase in Excise Duty for 2023:

    We would like to put on record that the real impact on our members in the industries under excise regime from the 2022 fiscal policy has been negative and this has created;

    •    reduced production volumes with its attendant result on downward trend in capacity utilization;

    •    increased illicit trade in some of the affected products;

    •    erosion of members’ market share and revenue, especially following continued devaluation of the Naira against major currencies,

    •    inflation and increased security challenges faced around the country;

    •    freeze on employment and redundancies in the manufacturing industry;

    •    squeezed margins as our members are unable to pass additional costs to consumers by way of higher prices given their eroded income and dwindling purchasing power.

    Apart from the above challenges faced in the business environment, manufacturers also have to contend with currency devaluation and increasing inflation resulting in higher cost of production as our members have little to no access to foreign exchange at the official window and have to resort to the parallel market at an extra cost of around N300 to US$1.00

    All these are without regard to the industry’s contribution to the Nigerian economy in the way of significant taxes being paid (Excise, Corporate Income Tax, Value Added Tax – VAT, etc.); export revenue in foreign currency; employment of thousands of Nigerians by the industry directly and indirectly including supply chain partners in the SME sector as well as Corporate Social Responsibility (CSR) to the local communities and other stakeholders nationwide.

    Other Issues:

    We commend the Federal Government on some of the approvals as provided for under the Supplementary Protection Measures (SPM) on Annex I, II and III of the 2023 Fiscal Policy guidelines, which is in support of MAN agenda of Resource-based Industrialization. We however request that in addition to the issue of Excise tax increase, the following items should be reconsidered:

    1.    Green Surcharge – Import Adjustment Tax (IAT) on Motor Vehicle (Chapter 87)

    While we support and respect government’s opinion and measures aimed at addressing climate change and Nigeria’s commitment to net zero emission, it would have been better if we exercise some level of strategic caution and allow for a period of realistic transition to clean energy. This is considering the fact that most of our members engage logistics companies, majority of whom are in the Small and Medium-scale Enterprise (SMEs) cadre, who would need some time to migrate to green fuel and who lack the financial capacity to purchase electric vehicles. Anything short of this will increase the input cost of products culminating in un-competitiveness as well as eliminating many SMEs in the logistics downstream of the manufacturing sector.

    2.     Single Use Plastic Surcharge of 10%    

    The surcharge of 10% on Single Use Plastic under HS Code 3919.10.00.00 and 3919.90.00.00 as well as Headings – 39.20; 39.21 and 39.23 (Plastic Containers, Films and Bags), appears ill-timed and hasty in view of the fact that Government, through the Federal Ministry of Environment, is currently working towards instituting a Plastic Cycle Waste Management Policy with technical assistance from the United Nations Industrial Organisation (UNIDO) along with support from the Japanese government.

    The project is to institute a long-term solution to manage the menace of plastic wastes and assist the affected industries to retrofit, thereby reaching the threshold of the United Nations goal of green environment as being espoused by the series of the UN organized Conference of Parties (COP).

    It is therefore necessary that this process should be allowed to reach its conclusive end before other measures such as provisioned in the 2023 Fiscal policy guidelines are pronounced by Government.       

    Our Appeal

    We have earlier noted and forwarded our position on the Excise duty tax to the Government while it was being proposed in the 2023 Fiscal Policy Guidelines. We are again emphasising the fact that the proposed increase in the recently released 2023 guidelines i.e., on Beer, Wines and Spirits, Tobacco, has the potential to trigger unprecedented distortions in the affected industries as well as the entire manufacturing sector.

    The policy is capable of producing negative effect on investments with a huge consequence on job retention in these industries. We therefore strongly recommend that Government should maintain the status quo regarding the already government-approved excise duty increases on these items in the 3-year Roadmap as contained in the 2022 Fiscal Policy Measures. This was approved by Mr. President and implementation commenced on 1st June 2022. The industry CANNOT afford any further increases at these extremely challenging times.   

  • Special Report: MAN releases Bi-Annual Economic Review

    Special Report: MAN releases Bi-Annual Economic Review

    Manufacturers Association of Nigeria (MAN) has released the findings of the manufacturing sector for the second half of 2022. The report monitored changes in manufacturing sector performance indicators viz-a-viz the behaviours of macroeconomic and policy environments during the period. The report focuses on manufacturing indicators, include capacity utilization, production value, inventory, level of utilization of local raw materials, investment, and expenditure on alternative energy sources, amongst others

    •  GLOBAL AND NIGERIAN MACROECONOMIC HIGHLIGHTS

    In the October 2022 World Economic Outlook, the International Monetary Fund (IMF) observed that global economic activity is experiencing a broad-based and sharper-than-expected slowdown, with inflation higher than seen in several decades. The cost-of-living crisis, tightening financial conditions in most regions, Russia’s invasion of Ukraine, and the lingering COVID-19 pandemic all weigh heavily on global output. World output growth is forecast to decline from 6.0 percent in 2021 to 3.2 percent in 2022 and 2.7 percent in 2023, the weakest growth profile since 2001 except for the global financial crisis and the height of the COVID-19 pandemic.

    According to IMF forecast, global inflation is to rise from 4.7 percent in 2021 to 8.8 percent in 2022, but to decline to 6.5 percent in 2023 and 4.1 percent by 2024. However, IMF noted that monetary policy should be directed at restoring price stability, while fiscal policy should aim to alleviate the cost-of-living pressures while maintaining a sufficiently tight stance aligned with monetary policy.

    Output growth of Sub-Sahara Africa was projected by the IMF to slow to 3.6 per cent in 2022  from 4.7 per cent of 2021 and further decline to 3.0 per cent in 2023.  Nigeria’s output growth was projected to slow to 3.2 per cent in 2022 and 3.0 per cent in 2023 respectively.

    3.0     MANUFACTURING SECTOR PERFORMANCE

    Global Manufacturing 

    According to the United National Industrial Development Organization (UNIDO), since the last quarter of 2021, global manufacturing output had maintained a stable year-over-year growth rate between 3 and 4 per cent. However, this changed in the fourth quarter of 2022, when growth decelerated considerably to 1.5 per cent. On a quarter-on-quarter comparison, global manufacturing suffered a loss of 0.3 per cent due to ongoing challenges such as high energy prices, rising global interest rates and persistent disruptions in the supply chain of raw materials and intermediate goods. Africa’s manufacturing grew by 2.2. per cent in the fourth quarter of 2022 amid the various challenges.

    Nigeria’s Manufacturing sector

    Manufacturing Capacity Utilization: In the second half of 2022, year-on-year, Capacity utilization in the manufacturing sector declined to 54.9 per cent from 59 percent recorded in the corresponding half of 2021; thus, indicated 4.1 percentage points decline over the period. Quarter-on-quarter, it declined by 3 percentage points when compared with 57.9 per cent recorded in the first half of the year. Manufacturing capacity utilization averaged 56.4 per cent in 2022 as against 55.9 per cent average of 2021.  The decline in manufacturing capacity utilization in the period is due to the adverse effect of high cost of energy and the Russian Ukrainian war, the grave effects of the Naira Redesigning policy and other perennial challenges such as acute shortage of Forex for importation of raw materials and machines, high cost of borrowing and many more.

    Manufacturing Production Value: Manufacturing sector factory output value declined to N2.68 trillion in the second half of 2022 from N3.73 trillion recorded in the corresponding half of 2021; thus, indicating N1.05 trillion or 28 per cent declined over the period.  It also declined N1.31 trillion or 32 per cent when compared with N3.99 trillion recorded in the preceding half. The value of manufacturing production totaled N6.67 trillion in 2022 as against N7.39 trillion recorded in 2021. Manufacturing production was severely affected in the second half of 2022  by absence of implementation of new capital project by the government as they focused on the election. Production in the sector was also negatively affected by limited purchases by households due to the Naira redesign policy, the high inflationary pressure in the country, high cost of energy, particularly diesel and gas, acute shortage of forex for importation of raw materials and machinery needs of the sector that are not locally manufactured in the time being and many more. Unfortunately, the issues of the basic metal group whereby duty of Annealed Cold roll was reduced to 5 per cent from the previous 45 per cent; the suspension of motorcycles in some areas across States, the increase in the duty of paper from 5 per cent to 20 per cent and so on are still effective.  These challenges, in addition to the perennial issues, contribute enormously to the dip in the production of the sector in the period under review.

    Local Raw-Materials Sourcing: Manufacturing sector local raw materials sourcing increased to 53.5 per cent in the second half of 2022 from 50 per cent recorded in the corresponding half of 2022; thus, indicating 3.5 percentage points increase over the period. It also increased by 1.5 percentage points when compared with  52 per cent recorded in the  preceding half. Local raw materials utilization in the sector averaged 52.8 per cent in 2022 as against 51.5 percent recorded in 2021. The increase in the local raw materials utilization in the sector during the period is due to increased difficulty in sourcing forex which compelled manufacturers to look more inward for raw materials notwithstanding the associated huge cost.  It is, therefore, important for the Government to re-evaluate tis role in local development and production of raw materials  in terms of funding.  For instance, the development and production of Active Pharmaceutical Ingredients (APIs) has continuously eluded due to limited funding of the Raw Materials Research and Development Council (RMRDC) by the Government. The absence of local production of APIs has been having dire consequences on the pharmaceutical production, particularly in the  current situation of acute shortage of forex.

    Unsold Inventory of Finished Products: Inventory of unsold finished products in the manufacturing sector increased to N282.56 billion in the second half of 2022 up from N169.75 billion recorded in the corresponding half of 2021; thus, indicating N112.81 billion or 66 percent increase over the period. It also increased by N85.46 billion or 51 per cent compared to N187.1 billion recorded in the first half of the year.  Inventory of unsold goods in the sector totaled N469.66 billion in 2022  as against N384.58 billion recorded in 2021. The high inventory recorded in the period is attributed to low purchasing power in the economy due to declining real income of household following the continuous increase in inflationary pressures in the country. This is worsened by the Naira Redesign policy which began in the last quarter of 2022.  The withdrawal of large amount of the ‘old Naira’ without commensurate replacement with the ‘new notes’ resulted to cash crunch in the economy with very limited means of purchasing items by households across the country.

    Manufacturing Investments: Manufacturing sector investment dipped to N145.59 billion in the second half of 2022 down from N160.88 billion recorded in the corresponding half of 2021; thus, indicating N15.29 billion or 10 per cent decline over the period.  It further declined by N32.8 billion or 18 per cent when compared with N178.39 billion recorded in the first half of the year.  Manufacturing investment totaled N323.98 billion in 2022 as against N305.02 billion recorded in 2021. Investment in the period was affected by the high debt profile of the Government which particularly deters foreign investment, high cost of borrowing, high cost of energy, low consumption during the period and many more.

    Manufacturing Employment:   Based on MAN survey since 2013, cumulative manufacturing employment  was estimated at 1,686,725 at the end of 2022.   However, in the second half of 2022, manufacturing employment dipped to 6741 down from 8508 and 9559 recorded in the corresponding half of 2021 and the first half of 2022 respectively. The decline in the number of jobs created in the sector during the period corroborates the poor operating business environment that was perverse with high energy cost, exorbitant cost of borrowing, high inflation, low sales due to limited cash and many more.

    Electricity Supply to Industries:  Electricity supply to the industries from the  national grid  declined marginally to 11 hours per day from 12 hours recorded in the preceding half. However, average number of outages per day stabilized at 4 times in the second half of 2022 as it was recorded for the first half of the year. Irrefutably, the trends shows that power supply to the industry is still a huge challenge which accounts  for huge investment of manufacturers  in self-energy generation.  Consequently, expenditure of alternative energy source  increased to N76.7 billion in the second half of 2022 from N45.04 billion recorded in the corresponding half of 2021; thus, indicating N31.66 billion or 70 per cent increase over the period.   It also increased by N8.9 billion or 13 percent when compared with N67.8 billion recorded in the preceding half.  The expenditure was incurred on procurement of diesel, gas, generators and spare parts, inverters and UPS, etc.

    Cost of Funds to Manufacturers

    In the second half of 2022, average lending rate to  the sector from the commercial banks slowed to 22 per cent from 24 per cent  recorded in the corresponding half of 2021 and the first half of 2022  respectively.  The trend shows a 2 percentage points declined  over the periods. Commercial bank lending rate to  the industries is grossly influenced by the incessant increase in Monetary Policy rate in quest to maintain an appreciable real interest in order to attract foreign investment inflow.  In the last quarter  of 2022, Monetary Policy Rate was retained at 16.5 per cent;  CRR was 32.5 per cent; and Liquidity  Ratio, 30 percent.

    4.0     SUMMARY AND RECOMMENDATIONS

    The beginning of 2022  was marked with the invasion of Ukraine which later graduated to a full-scale war between the two countries.  Russia are Ukraine are central to effective functioning of the global supply chains as they are significant suppliers of agriculture produces and inputs, energy and many more across the world. As the war increasingly debilitates production in Ukraine and Russia, it furthers incapacitated the performance of the various nations of the Western World, this led to an increase in the prices of global commodities (food, agricultural inputs, energy, etc.) and resulted to global inflation.

    The effect on Nigerian economy was quick in the second half of 2022 as the cost of wheat and other food inputs increased; prices of fuels, particularly diesel rose by over 50 percent; cost of transportation logistics including shipping escalated even as the effect of cOVID-19 pandemic is yet to fully die down. In addition to these challenges  was the  CBN policy on Redesigning the Naira, which  aimed at bring a  N3 trillion in the economy to the control of the banking system.  from the economy.  The policy created a cash crunch that  debilitated economic activities in the last quarter of 2022. This particularly affected the manufacturing sector adversely as it was extremely difficult to sell most of the Fast-Moving consumer Goods and other commodities by the sector in the period.

    The performance of the manufacturing sector based on the outcome of the survey is corroborated by the GDP reports of the National Bureau of Statistics which shows that output growth of the sector declined to-1.91 per cent in the third quarter of 2022 from 3.0 per cent recorded in the second quarter before moving up to 2.83 per cent in the fourth quarter of the year.  Consequently, it is critically important  that the challenges identified by manufacturers  in the course of the survey  are adequately addressed as follows:

    • Improving  Forex  availability
    • Prioritize forex intervention  through the  official market, particularly to support the raw materials and machine needs of the industries;
    • improve forex allocation to industrial sector and  enhance  the capacity of designated banks to  efficiently process the application of forex by manufacturers;
    • grant concessional forex allocation at the official forex market to industries  for the importation of productive inputs that are not locally available;
    • unify the various forex windows in the country;
    • Energy/Power Supply
    • Develop and implement a roadmap for improved power supply focusing on off-grid solutions and independent power projects by the private sector to ensure adequate supply of energy for production and also attract and expand investment
    • Carry out further investment in the electricity value chain and commit to adding 10000MW to the current electricity distributed in the country.
    •  Embrace and support significant  development of energy mix and renewable: the country has huge potential for Solar and  Wind
    • Commission the resuscitation of the existing national refineries to produce fuels locally;
    • Review the gas price for domestic consumption to be in tandem with the export price which is about $3.25 per cubic meter
    • Promote energy efficiency  and renewable energy deployment in industries and homes;
    • Quickly incentivize more investment in gas aggregation to end gas flaring;
    • Optimize crude oil production based on OPEC quota and gas production to ramp up revenue now that hydrocarbon is still saleable;
    • Resuscitation of Domestic Refining
    • Review the current status of the four national refineries to determine their current state;
    • Commission the CHIYODA Group, the Japanese company that built the national refineries to rehabilitate them to resume domestic refining;
    • Review the Nigerian energy policy and ensure that available energy sources, particularly natural gas is optimally explored and exploited.
    • Create a functional incentive to attract private sector investment in gas aggregation to end the current  gas flaring;
    • Create incentive to resuscitate private sector investment in the petrochemical industry;
    • Improve the capital expenditure on the energy sector for greater public investment in energy development
    • Carry out  and utilize  the outcome, the Egypt’s energy development strategy
    • Raw Materials Production, Supply and Utilization
    • Incentivize investment in local development of raw materials; Give attention to domestic production of Active Pharmaceutical Ingredients (API) and Basic chemicals
    • Refocus on Backward Integration and Resource-Based Industrialization;
    • Reverse the duty for Annealed Coldroll back to 45 percent from the new 5 percent.
    • Re-invigorate the backward integration  policy  through the use of local resources to provide raw materials to the industries;
    • Taxes and  Government Regulation
    • Publish the list of approved harmonized taxes and levies for the manufacturing sector by the Joint Tax Board (JTB) to address the issues of multiples taxes and levies;
    • Commence implementation of the harmonized taxes and levies project which should be monitored and enforced strictly by the Joint Tax Board (JTB);
    • Jettison the proposed increase in Excise Duties.
    • Develop a comprehensive and integrated framework that will facilitate the intentional movement of operators in the informal sector to the formal sector.
    • Widen the tax net rather than increasing the tax base or the tax burden of existing tax payers.
    • Fully implement the Steve Oronsanye Report on the reduction and re-alignment of Government Agencies and Parastatals in order to streamline the number of taxes, levies, fees and administrative charges;
    • Infrastructure
    • Investment in the transportation sector (road, rail, waterways etc.) to mitigate the high cost of transportation logistics in the country;
    • Invest significantly in ports infrastructure  including scanners, etc.;
    • Resuscitate the moribund rail tracks leading from the ports to industrials areas;
    • Government Agencies operating at the ports should work harmoniously, particularly in the  implementation of the  recent migration of National list to ECOWAS CET Chapter 99;  
    • Implement the single window platform to eliminate  significant human inference in the ports clearing system;
    • Improve the time taken to clear machines and raw-materials at the national ports while making the link road accessible.
    • Funding
    • Set up a monitoring and evaluation platform with private sector  representatives  to oversee  the disbursement  of the various development  funds meant for the  industries;
    • Provide Credit guarantee for industrial loans from commercial banks;
    • Create development funding windows for  SMEs with liberal conditionality
    • Strengthen the Bank of Industry (BOI) and Bank of Agriculture (BOA) to provide liberal finance for the manufacturing sector adequately; Avail to the productive sector the CBN non-oil export stimulation facility with liberal term and condition
    • Economic/Industrial  Policies
    • Allow industrial policies in the country to gestate with proper monitoring and evaluation rather than jettisoning or altering them unduly frequently.
    • Strengthen  the implementation of the Executive Order 003 and 005;
    • Monitor the implementation of Executive Order 003 and 005 to ensure compliance by MDAs so as to boost activities in the manufacturing sector.
    • Through fiscal and monetary policy authorities’ joint effort, formulate and implement  a national policy that would address the current high inflation in the country
  • Feature: Nigeria’s Elite have no Shame

    Feature: Nigeria’s Elite have no Shame

    By Ayo Akinfe

    One of Nigeria’s biggest tragedies is that our ruling elite have not one iota of shame about the fact that they lag so far behind their counterparts elsewhere. Bola Tinubu has to change that mindset by addressing the following issues

    [1] Every serious nation must have the capacity to manufacture its own military hardware. There is simply no way you can provide security within your borders if you have to buy equipment on the international market. It is totally impossible to get the equipment you want at the price you want, in the specifications you want, at the time you want and in the quantities you want if you do not have a domestic manufacturing capability

    [2] Every serious nation has at least one globally acclaimed landmark that serves as an international tourist attraction. Be it Big Ben, the Statue of Liberty, the Taj Mahal, the Sydney Opera House, the Eiffel Tower, the Kremlin, the Brandenburg Gate, the Pyramids of Giza, the Kaaba, the Great Wall of China, Robben Island or Niagara Falls

    [3] Any country that takes pride in securing and defending itself has one main battle tank. Once a year, in most cases on Independence Day, these tanks are rolled out in a show of national pride. They include US – Abrams, UK – Challenger, Russia – T90, Germany – Leopard 2, Israel – Mervaka, China – ZTZ99, India – Arjun, etc. Nigeria is shamelessly still buying outdated T72 battle tanks from Russia and we wonder why Boko Haram/Iswap is laughing at us

    [4] Every nation that takes pride in itself has one industrial conglomerate that serves as the bellweather of its manufacturing industry. Be it Siemens in Germany, Phillips in the Netherlands, Rolls Royce in the UK, Tata in India, Mitsubishi in Japan, Boeing in the US, the China Railway Construction Corporation or Renault in France. Historically, they have always manufactured the engines that power their economies and defence equipment

    [5] Every self-respecting nation must be able to produce a mass-used local automobile, no matter how basic. When I look at Skoda in Czechoslovakia, Lada in Russia, Daewoo in South Korea, Proton in Malaysia and Hyundai, I ask why Africa remains asleep. Watch China and India steal a march on the global automobile market with the introduction of electronic cars over the next 10 years

    [6] Now that the era of the battleship is over and nobody is building destroyers anymore, in 2023, the navy of every serious nation secures its maritime borders with an aircraft carrier. Very few people will sell you aircraft carriers, so you need to manufacture them yourself. Just imagine the security we would have in the Niger Delta if it was patrolled by an aircraft carrier with say two dozen F-16s on board. Nigeria must manufacture an aircraft carrier as a matter of national pride

    [7] I find it hard to stomach the fact that no Nigerian city has a tube metro. Forget New York, London, Paris, Berlin, Tokyo, etc for a minute and look at other developing nations. New Delhi, Jakarta, Kuala Lumpur, Istanbul, Bogotá, Rio de Janeiro, etc are all now getting in on the act. How past Lagos State governors have been able to sleep in their beds at night knowing they have failed to deliver in this area is totally beyond me

    [8] Any country that is serious about its future must be able to provide basic healthcare. People only travel abroad for specialist care that is unique. Ask yourself how many of Nigeria’s general hospitals have functioning accident and emergency wards. South Africa’s Chris Hani Baragwanath Hospital used to be the largest in the world. Do you know it has 6,760 staff, 3,400 beds and occupies 170 acres. We struggle to maintain 300 bed hospitals!

    [9] Today, green and clean energy is now a status symbol. Nations are competing with each other to build the biggest solar farms, largest offshore wind farms and biggest recycling plants that convert waste to energy. Are we not ashamed of the fact that we are not participating in this human race?

    [10] Covid-19 has brought home the importance of self-reliance when it comes to drug manufacturing. Any nation that does not want to be wiped out by an epidemic, needs to be able to manufacture all the medicines it requires locally. What right have we to demand that other countries manufacture pharmaceuticals to keep us alive?

  • Feature: Peter Obi should be a member of the National Economic Council

    Feature: Peter Obi should be a member of the National Economic Council

    By Ayo Akinfe

    Were I in Bola Tinubu’s shoes I would appoint Peter Obi as the chair of my National Economic Council who I would give free reign to replicate South Korea’s policy of anything we don’t produce we don’t need

    Ayo Akinfe

    This is what my National Economic Council would look like were I the one being sworn-in on May 29:

    [1] Peter Obi
    [2] Pat Utomi
    [3] Kingsley Moghalu
    [4] Charles Soludo
    [5] Arunma Oteh
    [6] Kemi Adeosun
    [7] Wale Edun
    [8] Shamshudeen Usman
    [9] Uzoma Dozie
    [10] Lamido Sanusi

    Their mandate would be to replicate this Korean manufacturing model:

    [1] In South Korea, they have a national slogan – “Anything we do not make, we do not need.” Basically, what this means is they agreed as a people to cut their coats according to the size of their national cloth

    [2] Contrary to the view of the pessimists that this would make South Korea a rural and peasant economy, the policy actually spurred them on to become a major manufacturer and producer. In 1945, South Korea’s economy was no more developed than that of Nigeria but today, South Korea is known for its spectacular rise from one of the poorest countries in the world to a developed, high-income economy in just a few generations. This economic growth is called by some a miracle, and described locally as the Miracle on the Han River

    [3] Having almost no natural resources and always suffering from human overpopulation in its small territory, South Korea adapted an export-oriented economic strategy. By 2014, South Korea had become the seventh largest exporter in the world. They still need to buy a lot, so are the seventh largest importer in the world but they always make sure they sell more than they buy, so they always have a balance of trade surplus

    [4] In 2017 for instance, South Korea exported goods that totalled $577.4bn. They have a total GDP of $1.65trn, so basically, about a third of all they produce goes to export

    [5] At the epicentre of their economy is the national company Hyundai. Founded in 1967, Hyundai, along with its 32.8% owned subsidiary, Kia Motors and its 100% owned luxury subsidiary Genesis Motors, is the third largest vehicle manufacturer in the world. Do you know that Hyundai operates the world’s largest integrated automobile manufacturing facility in Ulsan, which has an annual production capacity of 1.6m units. Worldwide, the company employs about 75,000 people

    [6] Before their other national company Daewoo went bankrupt, South Koreans basically had a slogan that anything Hyundai and Daewoo could not make was surplus to requirements. These two companies were into everything, basically manufacturing every industrial good out there

    [7] I have long argued that Nigeria needs about four or five industrial conglomerates to manufacture all our consumer goods. I would convert the NNPC into an industrial giant and then back it up with Dangote Industries, Innoson Motors, Transcorp International and Man of God PLC. This Man or God PLC would be the combined assets of all our evangelical churches. I believe that if they pooled all their resources together, they would be as formidable as the Catholic Church was in 19th century Europe. These five conglomerates would manufacture every single item under the sun if I had my way

    [8] One of our biggest tragedies of Nigeria is that we consume a lot and produce too little. We love luxury cars, private jets and Gucci handbags but produce none of them. How many Nigerian ladies ever say to themselves: “Rather than keep buying Lui Vitton handbags, I want to actually establish a rival brand to compete in the Nigerian market?

    [9] We live in a society where the modest are ridiculed and derided and we then complain when corruption thrives. We cannot have it both ways. If we define ourselves by how much we consume, we cannot then complain when people go about amassing wealth by any means necessary. Be the change you want to see!

    [10] Today, we could easily manufacture cars, motorcycles, oil rigs and shipping vessels in Nigeria if we were serious about it. We should do that on one hand, while on the other, luxury goods like private jets, Gucci bags, Luis Vitton handbags, lavish Dubai parties, etc need to go. We have no moral right to complain about the poor state of Nigerian tourism if rather than patronise it we dash off to Dubai to hold lavish bashes rather than hold them in Lagos, Abuja, Uyo or Calabar. Vanity breeds corruption!

  • Feature: Empowering Local Governments to Improve Access to Clean Water, Sanitation, Hygiene

    Feature: Empowering Local Governments to Improve Access to Clean Water, Sanitation, Hygiene

    By Elvis Eromosele 

    Access to clean water, sanitation, and hygiene is essential for human health and well-being. The Sustainable Development Goal (SDG) 6 is about “clean water and sanitation for all”. However, in many developing countries, these necessities remain out of reach for a significant portion of the population, particularly those living in suburban and rural areas. The popular thinking is that local governments can play a critical role in scaling up interventions to improve access to water, sanitation, and hygiene. 

    Take Nigeria, it is easily the most populous country in Africa with a rapidly growing population expected to reach 400 million by 2050. Despite its vast natural resources, including water, Nigeria faces significant challenges in providing access to clean water, sanitation, and hygiene. According to the World Health Organisation (WHO), only 29 per cent of Nigerians have access to basic sanitation facilities, and only 63 per cent have access to basic water services.

    The local government is Nigeria’s third tier of government. It consists of 774 units located across the thirty-six states of the federation. Local governments are typically responsible for a range of vital services for people and businesses in defined areas.

    Empowering the local government is key to addressing these and other basic everyday challenges. Across the world, local governments are responsible for providing basic services, including water and sanitation, to their communities. They are, however, often hampered by a lack of resources, capacity, and technical expertise to effectively implement interventions to improve access to these services. To overcome these challenges, several strategies can be implemented to empower the local government:

    Capacity building: One of the most critical strategies for empowering the local government is to build its capacity to implement water, sanitation, and hygiene interventions effectively. This can be achieved through training programs, workshops, and other capacity-building initiatives that provide local government officials with the knowledge and skills they need to plan, implement, and monitor these interventions.

    Partnerships: Partnerships with NGOs, private sector organisations, and other stakeholders can provide local governments with the resources and technical expertise they need to implement water, sanitation, and hygiene interventions. These partnerships can also help to mobilize resources and raise awareness about the importance of improving access to these services.

    Decentralization: Decentralization of water and sanitation services to the local government can enhance the accountability and responsiveness of local governments to their communities. Decentralization can also provide local governments with greater control over the allocation of resources, enabling them to prioritize interventions that are most needed in their communities.

    Use of technology: The use of technology can help to improve the efficiency and effectiveness of water, sanitation, and hygiene interventions. For example, mobile technology can be used to collect data on water sources and sanitation facilities, monitor water quality, and track the implementation of interventions.

    Community participation: Community participation is critical to the success of water, sanitation, and hygiene interventions. Local governments can empower communities by involving them in the planning and implementation of interventions, as well as in monitoring and evaluation.

    This is the core of the matter, transforming the operations of local governments in Nigeria will require a significant investment of resources. The exact amount required will depend on several factors, including the size and population of each local government, the specific interventions needed, and the level of capacity and resources currently available to local governments.

    Experts foresee that it would require consistent investment over the next 10 years, at the minimum, to make any dent 

    To start, we must have full autonomy for local governments in the country. Local government autonomy refers to the degree to which local governments have the power to make decisions and manage their affairs independently of the state or federal government. In Nigeria, local governments have limited autonomy, which has led to a range of issues and challenges. The biggest problem here is that of access to funds. 

    Empowering the local government is key to truly transforming the nation. As local governments are able to scale up water access, sanitation, and hygiene interventions, they will contribute directly to improving the quality of life of citizens. By building the capacity of local governments, fostering partnerships, decentralizing services, utilizing technology, and promoting community participation, we can improve access to these necessities and promote health and well-being for all. Local government autonomy is the ideal starting point. 

    Elvis Eromosele, a Corporate Communication professional and public affairs analyst lives in Lagos.

  • Feature: Nigeria needs to be a Global Manufacturing Centre

    Feature: Nigeria needs to be a Global Manufacturing Centre

    By Ayo Akinfe

    If we are serious about banishing poverty from our land, we should insist that Tinubu makes Nigeria the global manufacturing centre of one product like say railway carriages for instance

    [1] Nations do not just become wealthy overnight. They do so because their citizenry do audacious things to create unprecedented wealth to move their society forward

    [2] When I look at the UK and its Industrial Revolution for instance, I can see where Nigeria’s fault lines lie. You cannot be a nation of eternal consumers and expect to have the same living standards as countries that are serial manufacturers

    [3] One just needs to look at what the UK has achieved in the railway sector alone too see how national wealth is created. In February this year, the UK’s first ever steam locomotive celebrated its 100th anniversary. In 1928, the Flying Scotsman made history with the first non-stop London to Edinburgh service and in 1934, it became the UK’s first locomotive to reach 100mph

    [4] During the steam era, the UK railways boomed in an unprecedented manner. This continued when diesel took over, with a massive manufacturing industry growing to churn out engines, carriages, railway tracks, signalling equipment, etc

    [5] Nigeria is simply too parasitic a nation to live at ease with itself. There is a saying: “Grow or die.” Nigeria needs to start manufacturing or she will just self-implode

    [6] We missed a trick with China’s Belt and Road developing nations infrastructural development plan. We should have reached a deal with the Chinese to manufacture all the railway engines and carriages for the programme worldwide

    [7] Today, India prides itself on being the pharmacy of the world. Would you not just love it if Nigeria could assume the title of the World’s Railway Workshop

    [8] With high speed electric trains now the new vogue, the world needs a manufacturing centre. Can someone please explain to me why one Nigerian governor has not offered land for such an industrial complex in his state

    [9] We need to now throw the gauntlet down to Bola Tinubu and insist he attracts the foreign direct investment required to industrialise Nigeria. Without it, we are going nowhere anytime soon

    [10] If Nigeria wants to get off her knees, it cannot be business as usual. Among the most important positions that need to be in Tinubu’s cabinet are the ministers for manufacturing, security, railways, retail trade, clean energy and power

  • Feature: Tinubu should declare September 20 as Nigerian National Futuristic Day

    Feature: Tinubu should declare September 20 as Nigerian National Futuristic Day

    By ayo Akinfe

    Were I in Bola Tinubu’s shoes I would declare September 20 Nigerian National Futuristic Day and offer tax-free concessions to investors on this date every year

    [1] On September 20, a lot has happened over the centuries. Men and women of unbelievable courage did the unthinkable on this day, changing our world forever. For the world’s largest black nation to join the ranks of humanity’s greats, we simply need to start thinking similarly.

    [2] Nigeria needs to comes up with a formula to travel at the speed of light, cure cancer and discover species on other planets. How about we invite the world’s inventors to launch audacious programmes in Nigeria every September 30 with automatic guarantees of government funding

    [3] Do you know that on September 20 1519, a Spanish expedition led by Portuguese navigator Ferdinand Magellan set off on the first successful circumnavigation of the globe. Before then, everyone thought the world was flat but these guys decided to disprove that theory. Magellan died on route but they made it back and after then, it was accepted that the earth was round

    [4] It was on September 20 1854 that the Battle of the Alma, the first major battle of Crimean War took place as the British and French alliance defeated the Russians. As a result of the casualties of that war, a lady called Florence Nightingale decided to help the doctors. She then went on to found the profession of nursing which has established itself in every nook and cranny of the world today. Can you imagine a world without nurses today?

    [5] On September 20, 1870 Rome was captured by the Italian army, leading to Pope Pius IX surrendering to King Victor Emmanuel which unified Italy and ended the 1,116 year reign of Papal States. That basically brought about the end of theocracy in Europe

    [6] On September 20 1893, the first gasoline-powered car debuted in Springfield, Massachusetts. Today, we take petrol-powered cars for granted but it took someone with guts to launch the initiative

    [7] It was on September 20 1909 that the British Parliament passed the South Africa Act. It called for a union of Cape Colony, Natal, Orange River Colony and Transvaal and the adoption of both English and Dutch as official languages. That was the genesis of Apartheid as the was no provision of Africans in this act. So, when we condemn our brethren for their mindless xenophobic attacks, we need to understand that it is borne of ignorance. They do not know who their real enemies are

    [8] On September 20 1932, Mahatma Gandhi began a hunger strike against the treatment of untouchables. Maybe if he had adopted a similar stance against the treatment of blacks in South Africa when he was there, apartheid and racism would have been dealt a major blow. Gandhi opposed any form of discrimination against Indians but this did not extend to the African Kaffir

    [9] It will shock you to know that on September 20 1951, Swiss males voted against female suffrage. Also, on September 20 1963, President John F Kennedy proposed a joint US-Soviet voyage to the moon. Today, we take moon travel for granted

    [10] I look forward to the day when I will travel from Aba to Lagos on a high speed train, arriving within two hours. I look forward to the day when I will live in Ijebu Ode and work in Ibadan and be able to travel to work in an hour, or the day when we build an artificial moon in Abakaliki that acts as street lights in Afikpo. Who here would not like to be able to travel by a high speed river boat from Lokoja to Kaduna in under two hours?

  • Feature: What role will Wike get in Tinubu’s administration?

    Feature: What role will Wike get in Tinubu’s administration?

    By Ayo Akinfe

    With all this constant talk about Nyesom Wike I actually hope Bola Tinubu can find a role for him that involves developing the Niger Delta

    [1] Rivers is not just any state in Nigeria. It is our fountain of wealth and ideally should be the bellwether of the Nigerian economy. There is no reason for it not to be competing with Lagos State when it comes to attracting foreign direct investment (FDI)

    [2] What makes Rivers State unique is that it has always been at the forefront of economic change in Nigeria. Rivers State was the centre of the slave trade, the palm oil trade and now the crude oil trade. It has always been the cash cow of Nigeria. The reality is “No Rivers State: No Nigeria.” Since amalgamation in 1914, it has probably generated more wealth for Nigeria than any other state (Lagos may have something to say about they though)

    [3] As a historian, I am equally fascinated with the way Rivers State was more or less a creation of the colonial era. Frederick Lugard for instance built Port Harcourt out of nothing. A derelict and largely uninhabited marsh, all it had then was the Ijaw village Okrika and the migrant Sabon Gari Igwe Otcha, made up of Igbo traders who came down the River Nigeria from Onitsha to participate in the palm oil trade

    [4] No part of Nigeria prospered from the abolition of the slave trade as much as Rivers State. To fill the void left by the end of slavery, the British turned to palm oil and Rivers became the most economically vibrant part of Nigeria. Around 1900, Nigeria was the world’s largest palm oil producer and Port Harcourt was the port through which most of it was exported

    [5] This development brought thousands of Igbo traders into modern day Rivers State palm oil traders. The likes of Jaja of Opobo were Igbo traders, towns like Bonny sprang up out of nowhere as these migrants founded settlements and even today, the Igbos known as the Ikwerre, are the majority in Rivers State. Odili, Amaechi and Wike are all Ikwerre, which is an Igbo sub-group. As far as I am concerned, an Ikwerre man is just as Igbo as a Wawa or an Ngwa one. Their dialect is Igbo through and through

    [6] On March 25 1807, the Abolition of the Slave Trade Act received its royal assent from the King of England, abolishing the slave trade in the British colonies and making it illegal to carry enslaved people in British ships. From then onwards Rivers State began an unprecedented growth. Do you know that most of the slaves shipped through the Niger Delta passed through the port of Calabar but when it came to palm oil, Port Harcourt became king. Maybe the British left Calabar because they wanted to lay the ghost of slavery to rest

    [7] In 1832, the British began exporting palm kernels from Nigeria and by 1911 British West Africa alone exported 157,000 tonnes of which about 75% came from Nigeria. As recently as the early 1960s, Nigeria’s palm oil production accounted for 43% of global output. Today, we are actually producing more then we did back then but our output only accounts for 7% of the world total

    [8] We no longer dominate the palm oil trade partly because the British never deemed it fit to invest in palm oil plantations in Nigeria. In the 1870s, British administrators took the plant to Malaysia and in 1934 that country surpassed Nigeria as the largest exporter of the product. You know why? The first commercial scale plantation in Malaysia was founded in 1917 and established in Tennamaran Estate in Selangor. How come the British saw it fit to establish a plantation in Malaysia but not in Nigeria? It tells me that the slave trade mentality still prevailed. They deemed us not worthy of serious commercial activity

    [9] As fate would have it, Rivers State also killed the palm oil trade following the discovery of crude oil at Oloibiri in 1956 and the commencement of production in 1958. That year, our first oil field came on stream producing 5,100 barrels per day and since then, we have not thought of anything else. Today, Rivers State is the second largest crude oil producer in Nigeria and has a GDP of $21bn and a budget of N480bn ($1.3bn). However, its internally generated revenue (IGR) is only N61bn (170m). Now, for me this figure is skewed as under resource control, oil revenue should count as IGR in Niger Delta state’s

    [10] I just have this gut feeling that when Nigeria ends her mad dependence on crude oil, Rivers State will also be at the centre of it. Personally, I take the stance that nothing other than manufacturing will get us out of this morass. Rivers State will be key to that. Just imagine the size of the Nigerian economy if we had shipyards at Port Harcourt, Bonny, Degema, Buguma, Abonema and Opobo building merchant cargo ships, air craft carriers, submarines and naval gunboats? Nyesom Wike, have this as your target!

  • Dispatch from one of the world’s most dangerous migrant routes

    “The Trek: A Migrant Trail to America” premieres on April 16 at 8 p.m. ET on CNN’s new Sunday primetime series, The Whole Story with Anderson Cooper

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    > WATCH A PREVIEW OF ‘THE TREK’ | READ MORE <

    To get closer to freedom, they have risked it all.

    Masked robbers and rapists. Exhaustion, snakebites, broken ankles. Murder and hunger.

    Having to choose who to help and who to leave behind.

    The trek across the Darién Gap, a stretch of remote, roadless, mountainous rainforest connecting South and Central America, is one of the most popular and perilous walks on earth.

    A team of CNN journalists including Chief International Security Correspondent, Nick Paton Walsh, Field Producer Natalie Gallón and Cameraman, Brice Lainé made the nearly 70-mile journey by foot in February, interviewing migrants, guides, locals and officials about why so many are taking the risk, braving unforgiving terrain, extortion and violence.

    The route took five days, starting outside a Colombian seaside town, traversing through farming communities, ascending a steep mountain, cutting across muddy, dense rainforest and rivers before reaching a government-run camp in Panama.

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    Along the way, it became evident that the cartel overseeing the route is making millions off a highly organized smuggling business, pushing as many people as possible through what amounts to a hole in the fence for migrants moving north, the distant American dream their only lodestar.

    But many are naïve to what lies ahead. They’ve been told that the days of trekking are few and easy, and they can pack light.

    But money, not prayer, will decide who will survive the journey.

    People are the new commodity for cartels, perhaps preferable to drugs. These human packages move themselves. Rivals do not try to steal them. Each migrant pays at least $400 for access to the jungle passage and absorbs all the risks themselves. According to CNN’s calculations, the smuggling trade earns the cartel tens of millions of dollars annually.

    Just this week the US, Panama and Colombia announced that they will launch a 60-day campaign aimed at ending illegal migration through the Darién Gap, which they said “leads to death and exploitation of vulnerable people for significant profit.” In a joint statement, the countries added that they will also use “new lawful and flexible pathways for tens of thousands of migrants and refugees as an alternative to irregular migration,” but did not elaborate any further.

    At one of several huts where locals sell cold soda or clean water with cartel permission at a mark-up, is Wilson. Aged about five, he has been separated from his parents. They gave him to a porter to carry, who raced ahead.

    CNN has changed the names of the migrants interviewed for this report for their safety.

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    Wilson shakes his head emphatically when asked if he is going to the US. “To Miami,” he tells Paton Walsh.

    “Dad is going to build a swimming pool.” Asked about his future there, he says: “I want to be a fireman. And my sister has chosen to be a nurse.” He calls back down the trail: “Papa, Papa!” His father is nowhere to be seen.

  • Feature: Nigeria should take lessons from India

    Feature: Nigeria should take lessons from India

    Nigeria needs to learn from India who has just overtaken China as the world’s most populous nation

    Ayo Akinfe

    [1] India’s population has just overtaken that of China. They now have 1.428bn people to China’s 1.425bn. However, India have not been caught napping

    [2] India prepared for this moment by building industrial cities, wooing blue chip companies on their hundreds and getting 10% annual gross domestic product (GDP) growth rates

    [3] By 2050, Nigeria is going to become the world’s fourth most populous nation behind India, China and the US. Are we prepared for it?

    [4] First of all we lack the landmass to deal with this population growth. It is estimated that we will have a population of 400m by 2050. Our current landmass of 923,770 square kilometres is wholly inadequate for this. Whether we like it or not we simply have to merge with some of our neighbours

    [5] More worryingly, we lack the economic clout to deal with this population growth. Our current GDP is about $400bm. We need of at least $2trn

    [6] Our population is growing at a rate of about 3% per annum. We are not even getting that level of economic growth

    [7] At the moment, it is only Lagos that is really attracting foreign direct investment (FDI) into Nigeria

    [8] At the moment, Lagos State accounts for a quarter of Nigeria’s GDP and about one third of non-oil GDP. We have no choice but to replicate this across the 35 other states

    [9] Does Bola Tinubu know what he has actually let himself in for? He needs to get something like 10% GDP growth and attract like $10bn a year in FDI

    [10] By May 29, I look forward to seeing Tinubu’s plans to attract the 10 following companies into Nigeria:

    [1] John Deere – Our plans to commercialise and industrialise agriculture will get nowhere unless we can produce crops competitively. To do this, our farming has to become mechanised, so John Deere, this agricultural equipment manufacturer simply has to be present in the Nigerian economy, churning out tractors, crushing machines, harvesting equipment, seed planting machines, irrigation sprinklers, etc by the thousand every day.

    [2] Mars – As we step up our agricultural expansion plan, we need a major food processor in the country to turn our raw products into finished goods. For instance, Mars should build the world’s largest chocolate manufacturing plant in Nigeria that converts all West African cocoa into finished chocolate bars ready for export to the rest of the world

    [3] Embraer – This Brazilian aircraft manufacturer has not been a good brother to its fellow developing nation Nigeria. Outside Africa, Brazil has the largest number of negroid people in the world. I want to see Embraer set up a manufacturing facility in Nigeria that supplies all of Africa’s airlines with their aircrafts

    [4] Toyota – This company has taken Nigeria for granted for too long. We loyally buy their vehicles in large numbers, yet they have no industrial presence in the country. I want to see at least two Toyota manufacturing plants in Nigeria where they make say engine blocks, body carcasses and even venture into other sectors like producing railway equipment

    [5] Vickers Shipbuilding and Engineering – Nigeria has 853 km of Atlantic coastline but yet, has zero presence in the maritime industry. This for me is totally unacceptable. We need a company like Vickers to open shipyards in somewhere like Bonny or Badagry where it manufactures ships, speed boats, submarines, aircraft carriers, etc

    [6] Daihen Corporation – This Japanese company is a colossus in the transformer manufacturing industry. They make both transmission and distribution transformers, so if we are serious about addressing our power issues, we need to attract them to open a plant in the country

    [7] Tata Steel – No country gets anywhere if it does not produce steel. This Indian conglomerate not only produces steel products but also works on the technology of the future. We need a local subsidiary that not only runs Ajaokuta and Aladja but also manufacturers machine tools and other equipment like railway carriages

    [8] – Everywhere else on planet earth, humanity is thinking green. As part of this drive, Nigeria needs to pedestrianise some of her city centres, only allowing bicycles through. Every Nigerian villager too can ride a bicycle, so why are we not home to the world’s largest bicycle plant?

    [9] Samsung – This is the world’s largest mobile phone manufacturer. It is ludicrous to expect 200m people to keep importing handsets. We need them manufactured locally

    [10] Nike – This company is the kit sponsor of the Super Eagles. In 2018, they sold 3m of our jerseys worldwide. If they opened a plant in Nigeria to produce these tops locally at a cheaper price, who says they cannot sell 50m pieces

  • Feature: Nigeria need Coherent programmes to regain International Investor’s Confidence

    Feature: Nigeria need Coherent programmes to regain International Investor’s Confidence

    I just hope that Tinubu comes back from his trip abroad with coherent programmes to resolve all these problems which are driving investors away from Nigeria

    Ayo Akinfe

    [1] Insecurity which means that foreign workers and their families can be abducted, robbed or even killed

    [2] Government ministers constantly demanding bribes from investors. This is what ultimately drove Richard Branson away from the country

    [3] Political uncertainty. Tomorrow, a new government can get elected and unilaterally change the law, refusing to honour long terms agreements that are in place

    [4] Ever-changing remittance laws that limit the amount of funds that can be repatriated from Nigeria

    [5] Inadequate transport links. Travelling around Nigeria has to be done by car too often and there is not a good enough road network in place linking all of our 774 local government areas

    [6] Poor power supply which means all investors need to, first of all, install generators and then enter into diesel supply deals

    [7] Unreliable local suppliers. To function effectively, manufacturers need reliable and effective supply chains. For instance, can anyone confidently know that their Nigerian bottled water supplier will consistently deliver 100 gallons every week as arranged

    [8] Religious extremism. This is especially the case in northern Nigeria where Sharia laws inhibit free movement. For instance, in Kano State, the Hisbah Police are authorised to arrest a man an woman who work together simply for riding in a car together. How do colleagues work together in such an environment?

    [9] Our refusal to defy the odds when confronted with challenges. I am sure our attitude of just praying to God for solutions to our problems rather then seek solutions must drive expatriates mad. Rather than work overnight on remedies, we chose to attend vigils. There is only so much you can do with superstitious people

    [10] Our weak manufacturing base. When you have to import all the machinery you need, it can negate the advantages of low wages, high returns, a skilled workforce and a huge market.

  • Feature: Tinubu should woo British investors in London

    Feature: Tinubu should woo British investors in London

    I suspect that Tinubu will not return to Nigeria until after the coronation of King Charles. I thus hope he has drawn up audacious plans to woo British investors during his London visit

    Ayo Akinfe

    [1] First of all, his entourage to London must include industrialists like Dangote, Adenuga, Otedola, Alakija, etc. Their jobs would have been to secure joint deals with British enterprueners like Richard Branson and Alan Sugar

    [2] He should also take along a team of crack economists like Charles Soludo, Lamido Sanusi, Pat Utomi, Kingsley Moghalu, etc. Their job would be to set deal targets and then make sure these targets are met

    [3] Nigeria has annual budget of about $30bn. At the very least, his team to leave London with that amount in pledged foreign direct investment (FDI). If the economic team fail to hit the target, they should be refused entry back into Nigeria

    [4] Governor Babajide Sanwooolu should also be on the team. His job should be to reach a $20bn deal for the construction of a Lagos Underground Network. Governor Sanwoolu would announce the deal by declaring that from henceforth, he will only travel by public transport

    [5] I would have brought Governor Yahaya Bello of Kogi Stare too and got him to negotiate a $10bn investment package for the construction of a mega hydro-electric power plant at Idah

    [6] Governor Ben Ayade should he brought along too to seal a deal for the dredging of Calabar port and the construction of a railway terminal linking it with Abuja, Enugu, Lagos and Port Harcourt

    [7] Whoever is Tinubu’s choice for transport minister is the key man on the team as rail should be the centrepiece of Nigeria’s pitch. There are 12m cars on Nigeria’s roads today and over eight years, the next transport minister’s job should be to halve that by constructing a national railway network that links up all our 774 local government areas

    [8] Whoever is Tinubu’s candidate as minister for mines and power also has to be on the team. This person will be mandated to get the likes of Siemens, EDF Energy, Scottish Power, etc to invest in our cash-strapped electricity distribution companies. He or she should also not be allowed back into the country unless the person successfully woos at least three investors

    [9] I would seek to bring the 5,000 staff of British Steel who face redundancy to Nigeria. Tata Steel no longer wants them as it is transferring production to India but Ajaokuta sure as hell needs them. I will sign them on a two-year deal with a mandate to train at least 5,000 Nigerians during that period

    [10] Abia State’s incoming governors should also be on the team with a mandate to sign a deal with at least one fashion chain. This will mean Abia State supplying it with shoes, clothes, bags, belts, etc

  • Feature: Why Nigerians Should Embrace Paying Taxes

    Feature: Why Nigerians Should Embrace Paying Taxes

    by Chukwudi Enekwechi, JP

    In ancient and modern societies, paying taxes has remained a means through which citizens reciprocate the government’s social services to them. Of course, governments all over the world exist to render services to the people by providing social services such as infrastructure and other developmental projects for the use of citizens, but at the same time it behooves the citizens to reciprocate by paying their taxes as at when due.

    In fact, one of the requirements for a citizen to aspire for a public office in Nigeria and indeed in other climes is to show a proof of being a responsible citizen by paying his or her taxes, and failure to adhere to this rule will deny the citizen the right to aspire to a public office. I recall that in the second republic, the late nationalist and First Republic President, Rt. Hon. Dr. Nnamdi Azikiwe was dragged to court by his political opponents because he failed to pay his taxes. However, after the court adjudicated on the matter it was discovered that Dr. Azikiwe, as a responsible citizen, had paid his taxes as at when due, and he proceeded to contest for the coveted office of the President.

    This is one historical example of how important it is to pay taxes. Furthermore, when citizens pay their taxes government will be in a position to discharge its responsibilities to the citizens adequately. Such responsibilities include the provision of social amenities like hospitals, roads and bridges, water, healthcare, sanitation, schools, care for the aged and vulnerable groups, and markets among others.

    It is in this regard that the Nigerian apex tax organisation—Federal Inland Revenue Service (FIRS) under its Executive Chairman, Muhammad Nami has been applauded both within and outside Nigeria for its innovative steps towards increasing Nigeria’s revenue profile with its aggressive drive for payment of taxes by the citizens.

    It is remarkable that since Muhammad Nami assumed office he has introduced several measures that have seen the Federal Inland Revenue Service is in the lead for the federal government’s source of revenue for development apart from the oil sector.

    In most developed countries tax evasion is considered a very serious crime and can lead to severe repercussions against any offender, his or her status in the society notwithstanding.

    In light of the above Nigerians are enjoined to embrace the culture of paying taxes as it is a demonstration of one’s faith in his country, as well as an obligation on the part of every citizen and corporate organisation.

    There are different types of taxes ranging from personal income tax, company income, tertiary education tax etc. There is no gainsaying the fact that a social contract is not only binding on the government but also the citizens. While the government is discharging its own responsibilities, the citizens on their part are obligated to reciprocate by paying their taxes promptly.

    Gladly this is playing out well under President Muhammadu Buhari’s administration where the increase in tax revenues has translated into the provision of numerous social amenities that are impacting on the citizens positively.

    The impact can be felt in the construction of roads, bridges, railway lines, funding of Nigeria’s tertiary institutions, building of water dams and power plants across the country among many others. Obviously all these life-changing social services would not have been possible if the Federal Inland Revenue Service did not live up to its constitutional responsibility.

    Chukwudi Enekwechi, JP can be reached via kechis19@yahoo.com