Seeking lessons from China’s long economic boom

THAT CHINA has had decades of stellar growth is beyond doubt. More controversial is what can be learned from it. Does China prove that the basic tenets of developmental economics are right? Or does it argue for an overhaul? These questions brought together an august group of Chinese and foreign economists on December 9th in Beijing. They debated a new report that distils China’s experience into a handful of lessons which, the authors argue, belong in textbooks. But judging from the reaction, publishers will not be rushing to pulp current editions just yet.

The exercise, held at Tsinghua University, was a reflection on the start four decades ago of China’s “reform and opening” period, the rebirth of the economy following Mao’s disastrous rule. The anniversary is intensely political. Yet it is also a good moment to ask how China has done so well. Forty years ago, it had a 2% share of global GDP in terms of purchasing-power parity; now it has more than 18%.

Source: economist

Seeking lessons from China’s long economic boom

THAT CHINA has had decades of stellar growth is beyond doubt. More controversial is what can be learned from it. Does China prove that the basic tenets of developmental economics are right? Or does it argue for an overhaul? These questions brought together an august group of Chinese and foreign economists on December 9th in Beijing. They debated a new report that distils China’s experience into a handful of lessons which, the authors argue, belong in textbooks. But judging from the reaction, publishers will not be rushing to pulp current editions just yet.

The exercise, held at Tsinghua University, was a reflection on the start four decades ago of China’s “reform and opening” period, the rebirth of the economy following Mao’s disastrous rule. The anniversary is intensely political. Yet it is also a good moment to ask how China has done so well. Forty years ago, it had a 2% share of global GDP in terms of purchasing-power parity; now it has more than 18%.

On one point there was broad agreement. The debate about China’s growth is sometimes divided between those who credit the government and those who credit the market. Many at the forum noted that this distinction was too crude: both government policies and market forces have clearly been important. The real issue is how they have interacted.

The report, by scholars from Tsinghua’s Academic Centre for Chinese Economic Practice and Thinking, focused on the need to get incentives right. Because the central government promotes officials based on local economic performance, they have long been motivated to attract businesses and encourage investment. Li Daokui, head of the Tsinghua centre, argued that this was a vital element in China’s take-off, even if it has also led to problems such as pollution and a big increase in debt.

Critiques came on three fronts. First, some of the reports’ suggestions were restatements of what for many economists are truisms. One lesson, that the government should tame economic cycles, is a bog-standard Keynesian view. Second, China has certain advantages that others lack. As Edward Prescott, an American Nobel laureate, noted, the country’s sheer size has fostered healthy competition between regions. Third, much of what once worked for China no longer does. Barry Eichengreen of the University of California, Berkeley, concluded that, having invested so much already, China’s only path forward is to increase productivity—yet that requires fraught reforms such as the privatisation of state-owned firms.

The lack of a neat consensus hinted at a bigger point. The main lesson from China’s development is how hard it is to draw ideological lessons from it. Dani Rodrik of Harvard University emphasised China’s constant experimentation, whether in its first export zones or its introduction of market pricing. When policies worked well in one place, they were copied. When they did not, they were discarded. That does not make for a grand new economic theory. But it has made for good economics in practice.

Source: economist.com

Adeshina commends Egypt’s economic rebound

African Development Bank President Akinwumi Adesina has saluted Egypt’s strong macroeconomic performance, its improved ranking in the ‘Doing Business Index,’ and the success of major projects in which the Bank is supporting Egypt, lessons that can be learned for the development and the integration of the continent. Adesina was speaking during a session at the just-ended Africa 2018 Business Forum held in the Egyptian city of Sharm-el-Sheikh.

According to the Bank’s latest Country Results Brief, Egypt has regained its position as first destination for foreign direct investment (FDI) in Africa. Over the past five years of prudent fiscal policy, it has seen a diversified economy, with services accounting for about half its gross domestic product (GDP), industry, 34% of GDP, and agriculture 12%.

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“(We need) bold and innovative initiatives that realize the enormous possibilities of the continent.”, Adesina said, adding that “we need to prepare, structure and de-risk opportunities to turn them onto investments.’

Adesina spoke as part of a Presidential Panel on “Bold Leadership and Collective Commitments” in which he joined the Heads of Afreximbank, the Arab Bank for Economic Development in Africa, the Asian Investment Infrastructure Bank, the European Bank for Reconstruction and Development, the European Investment Bank, and the International Finance Corporation, to deliberate on advancing intra-African investments together. The Bank leaders were in the presence of Egyptian President HE Abdel Fattah El Sisi.

Egypt is the Bank’s second largest regional shareholder and third client in terms of cumulative historical approvals, making it the Bank’s strong partner. Today, the Bank has a portfolio of 30 operations in Egypt, valued at US$2.9 billion.

Adesina highlighted key Bank interventions in Egypt that have provided essential support to the country’s development. For example, energy sector interventions, including the Ain Soukhna and Suez power plants have contributed to overcoming Egypt’s power shortage by adding 3,250 MW of new and efficient generation capacity that can meet the electricity demand of about 7.5 million households, and will facilitate power interconnection with neighboring countries.

The Bank’s operations in 12 governorates, including Assiut and Domyat, have helped over 20 000 farmers to purchase essential inputs at the right time for crop and livestock production.

The Bank has also made a strong contribution to women through its pioneering Women’s Economic Empowerment Project, through which $9 million has enabled women to benefit from 4,306 loans. Under the same programme more than 24,000 women have received training.

Participating at the roundtable ‘Egypt – the Investment Gateway to Africa’ hosted by Egyptian Prime Minister HE Moustafa Madbouly and with participation from about 80 CEOs, Adesina stressed the importance of partnerships to meet Africa’s huge investment needs.

He cited the Bank’s recently concluded Africa Investment Forum held in Johannesburg, South Africa, as an example of greater intra-African private sector collaboration. The Forum successfully convened key private and public stakeholders, and provided an unprecedented platform for effective dialogue to drive investments into the continent.

The value of boardroom projects tabled for discussion during the Forum stood at US$47 billion, while investment interest was secured for 49 projects worth US$38.7 billion.

The Bank President said the Sharm el Sheikh conference will advance greater regional integration and investment.

“Regional integration is essential to face international competition and to facilitate the creation of jobs for youth,” Adesina said.

The Africa Forum in Sharm el Sheikh has emerged as a key platform for high level dialogue between Heads of State, senior Government officials and business leaders focusing on key strategic sectors. The 2018 Forum, which is the third in the series, focused on enhancing private sector cooperation in Africa to increase cross-border investments and trade.

The 2018 Forum, titled “Bold Leadership and Collective Commitment- Fast Tracking Intra-African Investments”, also dedicated a day to Empowering Women, whose voices are critical for framing the African business agenda going forward.

Source:Environews

Increased oil production grows Nigeria’s GDP by 1.81% in Q3

Nigeria’s Gross Domestic Product (GDP) has grown by 1.81% in the third quarter of 2018.

According to data released by the Nigerian Bureau of Statistics, the growth is an increase of  0.64 % Compared to the third quarter of 2017 and an a growth of 1.50% compared to  the second quarter of 2018.Quarter on quarter, real GDP growth was 9.05%.

In the quarter under review, the NBS says aggregate GDP stood at N33.14 million in nominal terms. This performance is higher when compared to the third quarter of 2017 which recorded a GDP aggregate of N29.03 million thus, presenting a positive year on year nominal growth rate of 13.58%.

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This growth rate is higher relative to growth recorded in the third quarter of 2017 by 2.88% points and higher than the proceeding quarter by 0.01% points with growth rates of 10.70% and 13.57% respectively.

The growth was boosted by increased oil production. Nigeria recorded an average daily oil production of 1.94million barrels per day (mbpd), higher than that of the second quarter of 2018 production volume of 1.84mbpd by 0.10mbpd.

Real growth of the oil sector was –2.91%  in Q3 2018 but growth increased by 1.04% points when compared to Q2 2018 which was –3.95%. Quarter-on-Quarter, the oil sector recorded a growth rate of 19.64% in Q3 2018.

The Oil sector contributed 9.38% to total real GDP in Q3 2018, down from figures recorded in the corresponding period of 2017 and up compared to the preceding quarter, where it contributed 9.84% and 8.55% respectively.

In nominal terms, Real Estate Services in the third quarter of 2018 grew by 3.67%, higher by 2.08% points than the growth rate reported for the same period in 2017 and higher by 2.64% points compared to the preceding Quarter. Quarter-on-Quarter, the sector growth rate was 5.44%. The contribution to nominal GDP in Q3 2018 was 6.88%, lower than the 7.54% reported in corresponding quarter of 2017 and 7.09%recorded in the preceding quarter.Real GDP growth recorded in the sector in Q3 2018 stood at -2.68%, higher from growth recorded in Q3 2017 by 1.44% points still higher by 1.21% points relative to Q2 2018.

Quarter-on-quarter, the sector grew by 3.88% in the third quarter 2018. It contributed 6.50% to real GDP in Q3 2018, lower than the 6.80% it recorded in the corresponding quarter of 2017 and 6.83 % in the preceding quarter.

The Construction sector grew by 52.67% in nominal terms (year on year) in 2018 third quarter, a hike by 35.98% points compared to the rate of 16.69% recorded in the same quarter of 2017. There was also an increase by 8.59% points when compared to the rate recorded in the preceding quarter. Nominal growth quarter on quarter was recorded as –16.54%. Construction contributed 4.20% to nominal GDP in the third quarter of 2018, higher than the 3.13% it contributed a year earlier but lower than the 5.47% contributed in the second quarter of 2018.

In the  the Agricultural sector: Crop Production, Livestock, Forestry and Fishing. sector grew by 18.32% year-on-year in nominal terms, showing an incline of 5.82% points from the same quarter of 2017. Looking at the preceding quarter’s growth rate of 10.64% there is an incline of 7.67%. Crop Production remains the major driver of the sector.

This is evident as it accounts for 91.1% of the sector’s nominal GDP. In the third quarter of 2018, Agriculture contributed 25.52% to nominal GDP. This figure is higher than the rates recorded for the third quarter of 2017 and higher than the second quarter of 2018 which recorded 24.50% and 18.78% respectively.

Affa Dickson Acho

Real Estate sector:Nigeria and Ghana record minimal growth in 2018

Real estate consulting firm JLL has released its 2018 City Reports for Nigeria and Ghana to offer a concise overview of current developments in the local office, retail, hotel and industrial sectors.

In wavering economic conditions, the analysis offers several interesting points and trends to note regarding local investment markets, vacancies and rental growth.

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Commenting on the Nigerian real estate environment, Zandile Makhoba, Head of Research for Sub-Saharan Africa, JLL, confirms that the various sectors have seen minimal growth in 2018, with rental rates for both retail and office space hovering around the same levels as last year.

On the positive side, the report outlines that the recent economic recovery and stable exchange rate have motivated the continuation of some of the development projects that were placed on hold last year. “Office stock has increased by about 11,000m2 in 2018 despite the slow improvement in demand for space,” says Makhoba.

Shifting to Ghana, prospects are even more positive in the capital city. “Accra has benefited from a significant pick up in the supply of quality real estate assets, from office to retail, to hotels and industrial,” Makhoba says. The report suggests evidence that the country should benefit from the recovery in global commodity prices through the previous 12 months which should underpin economic growth and stimulate investor confidence.

As demand gravitates to new stock in the office market, it could tip into oversupply. However, sentiment is encouraging with international capital becoming more active in the city.

While retail accommodation is expected to grow by a further 30,000m2 to 40,000m2 in Accra, the prime industrial market in Ghana remains under-developed. As the economy improves and demand increases, there are certainly opportunities for developers. There are also good prospects in the hospitality market with a recent proliferation in the serviced apartment sector. Makhoba also says the number of international brands entering Accra’s hotel market is set to further establish the Gold Coast airport node.

Summing up both city reports, Makhoba says Accra remains a strategic entry point for investors looking for strong demand fundamentals, political stability and a relatively transparent real estate sector. “We anticipate that transactional activity will increase in the next few years, driven by a recovery of the economy, owners looking to recycle capital and more rational development costs.”

The upcoming elections in Nigeria may slow down economic activity in the first half of 2019. However, the Nigerian economy is expected to improve in the short term as business and investor confidence picks up, and we can still expect positive momentum through 2019 and into 2020.

Source:africapropertynews.com

AfDB earmarks $220m for projects in Nigeria

The African Development Bank (AfDB) has earmarked $220 million for various intervention projects in the country.

President of AfDB, Dr Akinwumi Adesina, said this at the official launch of Inclusive Basic Service Delivery and Livelihood Empowerment Integrated Programme (IBSIP) in Abuja on Thursday, December 6, 2018.

Adesina was represented by the Senior Director of the bank, Mr Ebrima Faal.

He explained that $20 million would be approved soon by the management of the bank, for its programme designed as “say no to famine” by addressing food insecurity and malnutrition.

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He said that $200 million which had been approved by the management would be used for rural electrification projects across the country.

“The Say No to famine will address challenges of food insecurity and malnutrition in conflict affected states of Borno, Adamawa and Yobe with the means to resume agriculture-based and environment friendly livelihoods.

“The project will set the foundations for longer-term resilience building and sustainable economic and social development.

“This will be achieved through the combination of skills development and productive measures supported in the same locations by conditional voucher food support.

“The Nigeria electrification project is countrywide and aimed at delivering energy access to unserved and underserved communities in the country.

“The project will provide electricity to households, small to medium sized enterprises and public institutions at a least cost and timely manner through off and mini grid solutions.

“The project comprises the provision of solar hybrid mini grids for rural economic development, productive appliances and equipment for off grid communities and energising institutions.

“Adamawa state is included as one of the states to benefit in the first phase of the programme,” he said.

Source:Environews

How emerging markets in Africa can transform utilities through disruptive technology.- Loggerenberg

The entire installed generation capacity of Africa’s 48 Sub-Saharan countries is just 68 gigawatts, no more than Spain; this is according to the Africa’s Infrastructure report conducted by the World Bank. Up to one-quarter of that capacity is unavailable because of aging plants and poor maintenance. In Sub-Saharan Africa, just one person in five has access to electricity. If current trends continue, fewer than 40% of Sub-Saharan African countries will reach universal access to electricity by 2050. Per capita consumption of electricity in Sub-Saharan Africa (excluding South Africa) averages only 124 kilowatt-hours a year and is falling. The rate of consumption is barely 1% of that in high-income countries. If entirely allocated to household lighting, it would hardly be enough to power one light bulb per person for three hours a day.

Marleze van Loggerenberg who is the Head of Business Development Africa at Wipro Limited, had an exclusive interview with Construction Review on how emerging markets in Africa can transform utilities through disruptive technology.

She recently attended the Sub Saharan Africa Power Summit in South Africa which according to her was a very eye opening summit. What stood out for her was that in attendance were various African countries including South Africa, the senior decision makers from the IPP, PPP and National Power communities across the region. Also, how people came together to discuss the challenges that Africa is facing and trying to find solutions around it and the real time interactions among the people was very successful.

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What are the unique challenges that utilities in emerging markets are facing in Africa?

600 million people in Sub-Saharan Africa do not have access to electricity and two thirds of people do not have access to modern energy services mostly because the electricity supply perhaps is not strong enough. The current rate at which electrification is happening shows that by 2040 there will still be 500 million people that don’t have access to electricity.

In Africa we have got a very widely spread or dispersed population and there are a lot of people in rural areas that do not have access to electricity because it is really expensive to take the electricity to the people, i.e. it is not cost effective and not a viable option and for some areas there is land issues that act as a challenge.

Also, aging infrastructure of our utilities in Africa across the board that has not been maintained or most of the infrastructure has been replaced due to poor maintenance over time leading to a struggle to build new infrastructure to try and bring electricity to those that have no access. This now brings a challenge of either choosing to maintain the existing ones or building new ones.

Lack of funding is also a huge challenge that came up during the summit as well as getting funding from lenders. This is because most of the funders need to have securities in order to lend the money and if you do not have the funds you will obviously not be able to do the maintenance. Currently, there are several utilities that are running below the capacity some of them are running at 30% capacity because it is poorly maintained and replacement of the equipment in the plant will equally be so expensive.

 

How can these markets overcome these challenges?

Independent power producers (IPPs) are going to play major role in the future because they can run at a much more cost-effective way and do not go through the aging infrastructure because they do things differently. There is also the rise of prosumers, meaning people that produce and consume their own energy e.g. businesses, industry or even individuals who should have a multi-directional smart grid hence sell power back into the grid. Also, a consumer can sell the power back to the grid but they have to have a multi-directional smart grid to be able to do that.

IPP are popping everywhere in Africa, in South Africa there is an office for that specifically but then they are moving into Africa at a very fast rate and the major challenge is government regulations and how to work with them together with the traditional utilities so as to bridge the gap.

Smart metres and prepaid metres are also starting to become a strong topic of discussion and this will help in better revenue collection and eventually there will be a reduced rate of illegal connections of electricity.

Good governance and the automation of the backing processes and provide ERP solutions is becoming really important because it will create transparency in revenue collections where resource managements and utilities can better make their decisions and how they spend their funds.

Productive ways of maintenance that can help prolong the life of the assets and also help utilities to run at maximum capacity and also contribute towards controlling power outages. Also, having power pools is another solution in Africa that utilities can participate in but the participation of this is not as active in Africa, so if the African utilities can start grouping across the international boundaries and upgrade those infrastructures and start making this resourceful then it can create a cost-effective solutions within the traditional utilities.

 

What interventions are required in order to be at par with the rest of the world?

Incorporation of renewable energy; low-carbon, low fuel sources and making more cost-effective like use of liquid- natural gas where we still do not have that in South Africa and other African countries. IPPs and other government regulations should also be applied so as to add to these incoming agreeable results.

Becoming more customer centric, i.e what we see in the rest of the world where consumers can choose if they want a green energy or they want power from a utility, and they can see what the power usage is in that they can manage their costs, however, in Africa we don’t have customer centricity and that is one of the major interventions that should be applied.

Also, obviously the renewing of infrastructure in Africa is definitely a huge intervention that needs to happen.

 

What technology can utilities leverage in order solve real problems that African markets are currently facing?

When talking about utilities, there are three things under which I would like to point out; the first is connected asset, connected customer and connected workforce.

Under connected asset easily have predictive and preventative maintenance on your grids and in your plants so that before a problem happens you can be able to detect that there is going to be a problem and this will prolong the life of your assets.

Under connected customer, we delved into it briefly. This is where the consumer is more in control of the energy usage, see if the customer is not connected and have real energy data, have specific programs, so that they can say when I use my energy at this time then it’s going to be more expensive than when I use it later.

Connected workforce is really under the theme of optimal field services so having the right people with the right knowledge of the right time with the right material to go and do the job.

 

What innovative and sustainable solutions would you recommend?

Incorporation of renewable energy into Africa- low carbon and low fuel, in that we should start embracing the independent power producers and what they are doing because they are making significant strives to help people especially in the rural areas

 

How can technologies such as AI, Blockchain, IOT, UAV assist?

One of the main innovations is drone technologies that can be used in the maintenance of the power lines and all your technology. With IOT on the other hand, you can use in predictive maintenance and thus can help, also giving information through the digital field operation that you can use for disaster inspection with drones or Augmented Reality (AR) that transposes digital information over the real reality and the inspections are what is happening on the power lines or if there’s any disaster or if there is anything else that needs to be done.

Then there’s artificial intelligence where you can use human centric self service i.e a concept called shifting from calls to clicks, so rather than having a huge call centre where there are a lot of people who have to call into to deliver a complaint you now have you now have an automatic platform that will help in answering your questions on a portal or on a cell phone app that will solve your problem and help deliver almost instantly.

What are the digital misconceptions that African emerging markets are currently had to dealing with?

For utilities, the digital misconception is probably that Africa does not need to digitize. I would say that Africa has been very slow to adapt to digital technologies, they need to embrace this because the digital world is here and is here to stay. We cannot continue delaying it because we are moving into the fourth and fifth industrial revolution and if we keep on delaying it the whole market will probably lose so if we’ve got all these emerging digital technology coupled with IPPs and all these new ways of generating energy that are cost-effective and new renewable energy, then Africa should just consider and embrace it as it comes.

SOURCE:constructionreviewonline

How Oby Ezekwesili plans to fix Nigeria

In an extensive thread on her Twitter handle on November 13, Obiageli Ezekwesili, presidential candidate of the Allied Congress Party of Nigeria (ACPN), outlined her plans to fix Nigeria.

Below is her thoughts on how Nigeria can become realise the dreams of its forefathers.

Excerpts:

Let me highlight the economic philosophy of my government, the fundamental principles and concepts that will guide our governance from Day 1.

Dominant belief in the private sector

A strong belief in the dominant economic role of the private sector and a commitment of our government to launch vigorous market economy reforms.  Through policy, effective regulation and catalytic public investment in the provision of basic services for people and businesses, we will accelerate and expand the sources of growth in the economy.

Deregulation

A massive programme of deregulation of the Nigerian economy to unleash the depth of competition and efficiencies necessary for higher and deeper economic growth and expansion of the economy.

The division and rebalancing of roles between business and government will reduce opportunities of corruption and bottlenecks that limit the competitiveness of the Nigerian economy.

Inclusive growth

A commitment to pursuing growth that is inclusive which is a necessity for lifting the poor to an improved state of well-being. Research has shown us that the poor are uplifted faster in a market economy cushioned by relevant safety nets.

A dedication to improving the productivity and competitiveness of Nigeria and Nigerians in every sector of economic activity by removing barriers and providing a menu of sound policy measures.

A deliberateness in easing the Doing Business environment not just for major businesses in Nigeria but for Micro, Small and Medium Enterprises, which are the lifeblood of our economy.

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But the thing is that the government does not have the resources or the capacity to provide these much-needed jobs. That is a settled truth, no matter what any politician says to you.

Therefore, in building our new Nigeria, the private sector will be the engine of economic growth and development. Our philosophy for tackling the challenges we face will be market based, private sector driven and government supported.

Role of the Government

Government has a role to play in enhancing the market, not undermining it. When I am president, we will embrace that role.

We will set the vision; lead on policy; ensure smarter, better and clearer regulations; help correct market failures; and invest in critical areas like developing the human capital to power our 21st century economy and leading the way on big ticket infrastructure.

Now, let us talk about some of our programs; some of the ways we intend to lift 80 million Nigerians out of poverty and propel this country and its great people to their rightful place in the world.

Human capital development

Human Development shall be our New Economy. Education and skills development of healthy Nigerian people shall be our Number One priority. No matter what we do, we would never win the war on poverty without investing massively in human capital development. That is why in our @ACPNHOPE government, education will be the new oil.

Education will be the new economy. My vision for education is one that will nourish the mind and create a progressive society that competes globally.  If our current and future human capital is not educated, they will most likely end up in poverty and our economy will lose the productivity that they would have added.

We shall launch a root and branch reform of all the levels and phases of education. Early childcare education, basic education, secondary education, special needs education and adult/informal education will all be systemically reformed to achieve universal access to quality and relevant education by all Nigerians.

Education, training and skills development remain the most potent tools of economic and social mobility in all progressive societies. Breaking the vicious circle of poor education is crucial for promoting inclusive economic growth and decent jobs for all. Just look at the numbers of children out of school in Nigeria: 13.2 million children. That is a timebomb, and it is already exploding all around us. 22 percent of the total number of out-of-school children in the whole world are our Nigerian children.

My government will reverse that. Starting from next year, we would quickly move to improve access. My government would reduce the number of out-of-school children by 20 percent annually. That will bring it down from the current 13.2 million to about 5.4 million by 2023.

And by then, we would have put structures and policies in place to ensure that the progress is irreversible and Education-For-All will be achieved well before 2030. You can hold me to this.  Do you know how I know that it can be done? Because I have done it before. I served as education minister for 10 months – which is one academic session.

From the year 2000 till today – that is a period of 18 years – the only time that the number of out-of-school children in this country reduced was when I was education minister. This is fact – the records are there.  In just 10 months, we dropped the number by almost half a million, but the moment I left the ministry of education in 2007, the number immediately jacked up by almost two million. And it has never dropped again since then.

Quality of teachers

I believe, and there is enough evidence to back me up, that the most important thing that transforms education in any society is the quality of teachers. We have a serious challenge with teacher quality in this country.  In one particular state, only 0.03 percent of teachers were fully competent to teach Mathematics & English language at primary level. The noble teaching profession has been so rubbished that it now only attracts those who do not have alternatives. That is a disaster.

Upon getting into office, my government would immediately launch a Teachers Top Talent (TTT) Initiative. The aim of the program would be to attract top talents into teaching because we really have no option. Teaching has to become the first thing that an academically accomplished and problem solving individual thinks about. We would provide sweeteners to encourage the brightest and best into the teaching profession.

A house for every teacher

One such initiative would be the Housing All Teachers (HAT) program which would ensure that a top talent who chooses to go into teaching would have an immediate chance to become a homeowner. We would provide seed money, state governments would provide the land and we would get developers to come on board. Home ownership is one of the fastest ways of reducing poverty.

When a top talent realises that she has a cheaper opportunity to own her own home rather than she would have while renting in another profession, it would spark interest in teaching. Of course, the other positive of the HAT program is the number of jobs it would create. Just imagine the number of houses that need to be built to house the hundreds of thousands of teachers across the country.

Certification of teachers

Still on the issue of teachers, another initiative that we would be launching is the Teachers Prestige; Teachers Pride. This initiative would include In-Service programs in which teachers would be sponsored on professional trainings and staff development modules where they meet their peers, discuss methods and case loads. It would also include giving a bite to the Teachers Regulatory Council (TRC) to implement adherence to certain milestones which teachers must reach to be rewarded.

If other professions like Accounting, Medicine and Law are so thoroughly regulated, there is no reason why the very important teaching profession should not be similarly regulated.  The Teachers Prestige; Teachers Pride initiative would also partner with the teachers’ union, state govts., and other stakeholders to look at the payment package of our teachers in order to agree on the scale of rewards & opportunities needed to attract top talents.

Source: Oby Ezekwesili

Slow growth, uncompetitive economy highlight challenge for next president

Nigeria’s economic performance has been lacklustre since 2015 when the country slipped into its first major recession in 25 years.

GDP growth declined from 2.11 percent in Q4 2017 to 1.95 percent in Q1 and 1.5 percent in Q2 of 2018.

The manifesto released by PDP presidential candidate, Atiku Abubukar, mentions some of these problems, stating, “Nigeria’s economy is uncompetitive, undiversified and foreign direct investments are in decline.”

The challenge for the next president (whoever it is may be) would be to navigate these problems amid a still fragile recovery, little or no elite consensus on the way forward and a short electoral cycle (four years) that discourages reforms.

Key economic sectors are dragging owing to what many analysts call ‘absence of economic direction’.

The major economic challenge facing Africa’s biggest economy is poor ease of doing business environment. Nigeria ranks 115th out of 140 countries in World Economic Forum (WEF) competitiveness ranking, which is worse when compared peers such Brazil, South Africa and Turkey.

In 2016, Nigeria embarked on several reforms—ranging from ports to taxes— to attract new investors and retain existing ones. This culminated into the establishment of the Yemi Osinbajo, the vice president-led Presidential Enabling Business Environment Council (PEBEC), whose reforms moved Nigeria 24 places in the World Bank Ease of Doing Business index, from 169 to 145 in 2018.

However, Nigeria dropped a spot to 146th among 190 countries in the World Bank’s 2019 Doing Business Index despite an improvement in ease of doing business score from 51.52 to 52.89.

In 2017, Foreign Direct Investment returned $987 million in 2017 as against $4.7 billion in 2014.

The FDI slumped by 29 percent to N379.84 billion in the first half of 2018 from N532.63 billion in the corresponding period of 2017 owing to the closure of two global lenders, according to CBN 2018 half year data.

Foreign portfolio investors who brought in N437.14billion into the stock market as of August took N469.71billion out of the same market, according to the trading figures from major custodians and market operators on their Foreign Portfolio Investment (FPI) flows. Total transactions on the Nigerian Bourse declined from January high of N394.44billion to N133.84billion in August.

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Analysts say portfolio inflow into the Nigerian equity market will remain subdued over the rest of the year. They angle their expectations on political uncertainties, the trade spate between the United States and China.

“Higher yield in developed economy and tensed political climate in the country were major reasons for investors pulling out despite the relative stability in exchange rate”, Damilare Asimiyu, economist and research analyst at GTI Group said in a recent note.

Two foreign banks—HSBC and UBS— have exited the country, bringing the number of foreign banks to eight as of end of June 2018, according to CBN.

In 2014, Procter&Gamble set up a $300million diaper line in Agbara, Ogun State, which was tapped as biggest US non-oil investment in Nigeria.

Four years after, the company has packed up, citing restructuring as its main reason. But those familiar with the company told BusinessDay that the company had to shut down its Agbara plant due to high production cost incurred at the plant.

Local manufacturers spend billions of naira annually on energy, resulting in high production cost and skyrocketing prices of goods. Manufacturers spent N51.35 billion on alternative energy sources in the second quarter (H2) of 2017; N66.03 billion in the first half (H1) of 2017; N62.96 billion in H1 of 2016, and N69.99 billion in H2 of 2016, according to the Manufacturers Association of Nigeria (MAN).

“It is no more news that manufacturers in Nigeria currently self-generate over 13,000MW through alternative sources of energy in order to stay afloat. In fact, cost of alternative electricity generation alone constitutes about 40 percent of our production cost. With such high costs, made-in-Nigeria products will hardly be competitive,” Frank Jacobs, immediate past president of MAN, said at a special interactive forum on Eligible Customer Regulation of the Nigeria Electricity Regulatory Commission (NERC) in June 2018.

Number of taxes payable by businesses across the country is 54 as against 37 in 2014.

The sudden suspension of the Export Expansion Grant in 2013 and continued delay in its implementation since Buhari came on board in 2015 have axysphiated exporters, making their products uncompetitive in the global market. The scheme was originally meant to cushion the effect of high production cost for exporters in order to make them competitive, but exporters are now left with little option as some of them like RN Global have closed shop.

Manufacturers say that high interest rate, necessitated by high inflation rate, is squeezing them.

Results of survey conducted by MAN shows that the average interest rate banks charged manufacturers in the second half (H2) of 2017 was 23.05 percent as against 22.65 percent in first half (H1) of 2017 and 21.4 percent  in H1  of 2016.

Nigeria’s infrastructure state has worsened, with roads to Apapa and Tin Can ports in Lagos almost inaccessible.

GE, last week, pulled out of the consortium that was going to invest $2.0 billion into the country’s railway into Apapa.

The country dithered for two and a half years until GE sold its global transport business, resulting automatically in a pull-out of the deal it had with Nigeria.

Nigeria loses N6.7 trillion annually to the state of the ports, according to a latest report released on Tuesday by the Lagos Chamber of Commerce and Industry (LCCI).

A breakdown of the numbers shows that  Africa’s biggest economy loses N600 billion in customs revenue, $10 billion (N3.6trn) in non-oil export sector and N2.5 trillion in corporate earnings across various sectors on annual basis.

“The concessioning of Onitsha seaport  should be finalised, while government should improve the security situation along and within the Warri port in order to ward off militants and touts. Stakeholders request that government should approve and publicise a bouquet of incentives to importers and exports that patronise ports outside Lagos,” Babatunde Paul Ruwase, president of the LCCI, said in a press conference.

Source: Patrick Atuanya & Odinaka Anudu

Reconstruction of Apapa-Oshodi-Oworonshoki-Ojota road to gulp N73 Billion

The groundbreaking ceremony to begin the reconstruction of the 32-kilometre Apapa-Oshodi-Oworonshoki-Ojota in Lagos was performed yesterday by the Minister of Power, Works and Housing, Mr. Babatunde Fashola, on behalf of President Muhammadu Buhari.

The reconstruction of the road’s Section 1, Sub-section A, will begin from the Olorogun Michael Ibru Boulevard (former Creek Road) end of Port Novo Bridge and Liverpool road, in Apapa, through Coconut, Beachland Estate interchange bridge, Cele Bus Stop, Anthony Village, to Old Lagos Toll Gate.

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The whole length of the road will be paved with reinforced concrete by Dangote Industries Limited at a whopping cost of N73 billion, using the Road Trust Fund policy.

The fund is a form of public, private partnership, conceived to accelerate the provision of federal roads by allowing private sector operators to collectively fund road projects in exchange for tax credit.

“The Road Trust Fund policy gives private sector operators an incentive to fund infrastructure with government. This is an innovative and laudable scheme, we are putting our money upfront,” said the President of Dangote Group, Alhaji Aliko Dangote.

“We are actually advancing our tax to government upwards of almost four to six years. This is a novel idea that will, no doubt, lead to rapid economic growth through significant infrastructure improvement. We look forward to doing more of this infrastructure with government,” he added.

Dangote lauded President Muhammadu Buhari for establishing the Road Trust Fund, which he said is targeted at constructing major commercial corridors with heavy vehicular traffic, saying, “This will surely open up the economy, boost our ease of doing business and also improve our ranking considerably in the annual global competitiveness report.”

He said last year, his company’s corporate tax, withholding tax and education tax alone got to N97.6 billion and that he was sure that this year, “Our taxes will be over 160 billion, by next year it should be over N200 billion. So, it is a wise thing for us to work with the government, because those roads that are not delivered on time, can actually be delivered on time and on budget, because if there is money for it, then there will be no excuse to increase cost.”

Dangote said the project, which would be the largest concrete road in West Africa, had a two-year construction period and it would be completed on budget and ahead of schedule, adding that the road would have a minimum lifespan of 45 to 50 years.

SOURCE: (NAN)

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