New Minimum Wage 2019: What does it mean for an Average Nigerian?

Almost every Nigerian can attest to the fact that the cost of living is currently higher than it was in previous years. Similarly, they express worry over the recently approved minimum wage. While public education from the government about this aspect of the economy is lacking, Nigerians can have their fears resolved by seeking information.

 

Understanding the implications of the new wage bill is necessary for every Nigerian citizen and resident regardless of their social status.

What does minimum wage mean?

Minimum wage refers to the least amount of monthly remuneration that a person should receive for their labour. The amount is set after the government and the union of labour hold talks and agrees on the final figure. It applies to every worker regardless of whether they are in the private or public sector. Typically, the national min wage is reviewed and adjusted periodically. When was the minimum wage in Nigeria implemented? Hassan Sunmonu was the president of the Nigeria Labour Congress (NLC) when the debate regarding minimum wage began.

 

Following his election into this position in 1978, he fought for the implementation of a minimum wage in Nigeria. In 1981, the minimum wage was set at N300. In the same year, the federal government declined to pay this amount leading to a nationwide strike of workers which stalled the economy.

 

This led to negotiations between the government and the NLC. The two parties settled on an N125 minimum wage. It was not until 1989 that the labour union demanded new wage limits. The demand followed the realisation that the prevailing rates could not afford an average Nigerian a decent life. After negotiations, there was an increase to N250 from the initial N125. With the growing economy, the minimum amount of remuneration became too low to allow an average Nigerian a good-quality life.

 

The labour union thus fought for the improvement of this amount. Between 1989 and 2001, several negotiations were held and the amount shot from N250 to N3,000; N5,000 and finally N7,500. During the reign of President Goodluck Jonathan, the amount as guided by the Nigerian Labour Law increased to N18,000. The current minimum wage is N30,000.

 

Exploring the meaning of the current situation

After nationwide campaigns, the new minimum wage of N30,000 was approved by the legislature on the 19th of March 2019. According to the law, this amount should be evaluated every half a decade. In Nigeria, the labour union has been championing for increased minimum wages to help the people deal with the ever-escalating rate of inflation. Periodic appraisal of the law also mitigates unnecessary strikes by workers.

 

With the harsh economic realities, will the government meet the new law requirements? For the government to comfortably meet the N30,000 minimum wage for each worker, specific measures ought to be taken:

Financial actions and implications

Many Nigerians are worried about the consequences of such changes. The following financial actions and implications are likely to happen.

The likelihood of expanding Nigeria’s non-capital spending

The government has no option but to abide by the current minimum wage bill. Late salaries for the workers must not be tolerated. Instead, the government should seek creative means of meeting the laws. Increased expenditure on compensation packages means that the country’s budget should be equally high.

 

As of 2016, about 59% of the federal government’s expenditure was spent on workers’ compensation. Following the new 2019 law, this amount is set to increase to an all-time high of about N2.29 trillion. The government needs a supplementary budget to meet this need. The non-capital budget can be increased by borrowing from developed countries. Alternatively, the Value Added Tax may be increased. Increased taxation rates are inevitably a source of worry for most Nigerians.

 

The likelihood of an increased tax rate

Does a potential increase in tax rate give me a reason to go on strike? While low rates of taxation would make life blissful for an ordinary Nigerian, they are just a dream! The new minimum wage requirements mean that increased taxation is inevitable. After all, the government requires more revenues.

The relevant authorities have considered increasing the Value Added Tax from the current 5% to 7.5%. So far, empirical data relating to this new suggestion is yet to be availed for a regular Nigerian to assess the impact of this move. If implemented, the cost of ordinary consumer goods will increase. Be ready!

Economic actions and implications

Concerning the economic sphere of life, most likely the following actions and implications will take place.

Likelihood of losing jobs

While improved minimum wages are aimed at improving the quality of life for people who are not affluent, it has its negative implications. The increased need for more money by the government to facilitate the new compensation packages may mean that the government has to downsize some operations. Means of reducing the gross overhead costs may be required. Consequently, internal labour resources may require reshuffling.

 

The reorganisation of human labour translates to a section of the workforce undergoing retrenchment and layoffs. In Nigeria where most of the workforce is informal, numerous people may lose their jobs. This translates to an increased burden of unemployment, especially among young people. Usually, the presence of many idle young people leads to increased social ills such as theft and drug use.

 

Likelihood of continued inflation

A present-day ordinary Nigerian is struggling to meet their needs and wants due to the high rate of inflation. This burden is unlikely to be lifted. Instead, it may be aggravated by the new minimum wage requirements. Most businesses may be forced to hike their prices to afford revenues that allow the minimum wages to be paid without strain and to have a reasonable margin of profit. The consumers, as is the norm, have to bear the costs through increased retail prices. Nigerians can anticipate an increased inflation rate henceforth. This will reduce their purchasing power. The cycle of the minimum wage remaining inadequate and its respective bill requiring an upward adjustment will continue.

What is the way forward?

Nigerians must first appreciate the fact that the labour union has been transparent in its operations and has fought for the rights of workers. Regardless of the possible adverse effects of the new wage bill requirements, each Nigerian has to pay their taxes faithfully. At the same time, an average Nigerian must be mentally and emotionally ready to budget for their minimum wage appropriately. One can afford a decent life with this amount using specific survival skills such as looking for cheaper housing. There is no allowance to squander the money on unnecessary things.

 

At the executive level, systems, measures, and machinery should be put in place to facilitate the proper collection of tax. Increased transparency and accountability of the tax officials to the public should be encouraged. This will mitigate theft scandals within the government.

 

The minimum wage in Nigeria was first implemented in 1981. Over the years, the terms have been updated accordingly to match the changing economic situations. Today, the minimum wage is N30,000. While this amount is seemingly impressive, it may mean that harsher financial conditions await an average Nigerian. Regardless of these changes, every Nigerian should retain their patriotism, honesty, and love for their homeland.

By Carol Karen

Analysts: Budget passage, new wage’ll boost manufacturing

Analysts at FBNQuest Research have said they are expecting the imminent signing of the 2019 budget into law as well as the implementation of the national minimum wage to boost activities in the Nigeria’s manufacturing sector.

The experts stated this while commenting on FBNQuest’s latest Purchasing Managers’ Index (PMI) report.

Specifically, they said: “Our manufacturing Purchasing Managers’ Index (PMI), the first in Nigeria, declined fractionally in April from 56.9 to 56.8. Our sample is a representative blend of large, mediumsized and small companies, based across the country.

Three sub-indices improved in April and all closed in positive territory, the highest being 60 for new orders. The prevalent trend in April was an improvement in sentiment in large companies, matched by a deterioration among smaller firms.

The proportion of unchanged responses continued to rise, to above 90% in one case.”


Besides, they stated: “Manufacturing is dominated by consumer goods industries, which remain under pressure from subdued household demand. In our search for glimmers of hope, we look ahead to the implementation of the new law covering the increased national minimum wage and the signoff on the 2019 FGN budget, which has been approved this week by the Senate with minor modifications. We should stress that we see a pick-up off a low base.

” It would be recalled that President Buhari recently signed the national minimum wage bill into law, which increased the minimum wage from N18,000 to N30,000. Also, the Senate last Tuesday passed the 2019 Budget of N8.92trillion, as against N8.83trillion presented by President Muhammadu Buhari on December 18, 2018.: B

Source: By Tony Chukwunyem

US Economy has Added Jobs for 103 Straight Months. Unemployment Rate falls to 3.6%

Employers added 263,000 jobs in April, another surprisingly strong month of hiring. Economists surveyed by Refinitiv expected the economy to add only 185,000 jobs last month.

The unemployment rate fell to 3.6%, the lowest level since December 1969. Indications of strength of the labor market could be found throughout the report. The average hourly wage was up 3.2% compared to a year ago, well above the 1.9% rise in prices, meaning real gains in the paychecks of average workers.
Some of the strongest sectors for hiring included the construction industry, which added 33,000 jobs, and health care, which added 27,000 jobs. Restaurants and bars added 25,000 jobs.
A few sectors lost jobs, including the retail sector battered by store closings and automakers, who have been closing plants and cutting shifts in the face of declining sales of some models.
If anything, one of the greatest headwinds for the labor market right now is a lack of workers to fill the job openings that employers have. The unemployment rate fell partly because the size of the labor market contracted slightly during the month.
Still hiring has hummed along at an impressive pace, far longer than many economists had expected.
“Even as some gauges of the strength of the economy have disappointed, job market conditions remain a very bright spot,” said Jim Baird, chief investment officer at Plante Moran Financial. “Job creation remains solid, and should provide continued support for consumer spending sufficient to keep the economy on a solid growth path.”
Typically when unemployment gets this low and wages start to rise, hiring can level off.
The higher wages can discourage employers from adding more workers, or even lead them to invest in labor saving devices. Self-serve kiosks at fast food restaurants and robot janitors at Walmart, the nation’s largest private sector employer, are examples of this.
Even with the strong report, some economists continue to believe that hiring is likely to slow in the coming months. Michael Pearce, senior US economist for Capital Economics pointed to a slight decline in the average work week and the lower percentage of the overall population that is either working or looking for work as signs of some weakness just below the surface.
“The labor market is not quite as strong as that decent headline gain implies,” he wrote in a note Friday. “We still expect a slowdown in economic growth over the rest of the year to drag payroll employment growth lower.”
Still, another strong report is undoubtedly good news for President Donald Trump, who saw his approval rating for his handling of the economy rise to 56% in the most recent CNN poll, the highest mark of his tenure.
But the strength of the job market stretches back to before he took office. This is the 103rd straight month that the economy has added jobs. And it is the 31st straight month that the unemployment rate has remained below 5%.
By Chris Isidore

5 Banks Earn N15.7bn on Account Maintenance Charges in Q1 2019

A total of N15.7 billion was netted by the five biggest banks in Nigeria from maintaining the account of their customers in the first quarter of 2019, the research team of Business Posthas confirmed.

The five bank are Zenith Bank, Access Bank, Guaranty Trust Bank (GTBank), United Bank for Africa (UBA) and First Bank, which our research team tagged ZAGUF.

Some days ago, the banks, alongside other publicly quoted companies, released their financial statements to the Nigerian Stock Exchange (NSE) for the period ended March 31, 2019.

An analysis of the financial positions of these ZAGUF banks showed that the amount generated from Account Maintenance Charges increased in the period under review when compared with the same period of last year.

In the first quarter of last year, the five big boys in the Nigerian banking industry generated the sum of N13.2 billion from Account Maintenance Charges, indicating that the amount increased by N2.5 billion or 18.94 percent in 12 months.

A further analysis of the results indicated that Zenith Bank made the highest amount from maintaining accounts of customers domiciled with them.

The lender netted N5.238 billion from current account maintenance charges against the N4.962 billion it generated in the first three months of 2018.

Following were First Bank, which earned N3.218 billion in Q1 2019 in contrast to N2.986 billion in Q1 2018, and GTBank, which raked N3.045 billion in the period under review versus N2.745 billion earned exactly 12 months ago.

Occupying the fourth position was Access Bank, which generated N2.212 billion from Account Maintenance Charges against N896 million in Q1 2018, while UBA raked N1.967 billion in Q1 2019 versus N1.598 billion in Q1 2018.

By Modupe Gbadeyanka

REDAN Building Expo Begins on 7th May with Launching of National Real Estate Data

The Real Estate Developers Association of Nigeria (REDAN) will begin this year’s Expo from 7th to 8th May at Shehu Musa Yaradua Centre, Abuja.

One of the major events at the Expo’s opening on the 7th will be the highly anticipated launch of the National Real Estate Data Collation and Management Programme (NRE-DCMP), which is designed to help tackle housing problems in Nigeria, including housing deficit.

NRE-DCMP was initiated by REDAN and Central Bank of Nigeria (CBN) to collate property price index nationwide to solve housing problems in the country.

According to the body’s President, Rev. Ugochukwu Chime, the data, collated from national land administrators on pre-construction, construction and post construction activities nationwide would be hoisted on the Nigeria Mortgage Refinance Company (NMRC)’s website for public usage.

“We are going to hoist the data on the website of the NMRC who actually is the key party and has done so much in the area of structural improvement to the mortgage process in Nigeria by keying into mortgage laws which they brought about.”

Chime bemoaned how before now there was a big misrepresentation of housing data in the country which has not really helped the sector.

“I have been in different fora where ministers representing different various ministries in Nigeria outside this country were giving different data about the same issue, which is embarrassing.

“We need data for planning; we need to know where we need those houses, so we organised it in such a way that the CBN agreed to work with us to tackle housing sector crisis.

“The data emerged from developers profile and capacity, demand and affordability profile of the market within a given locality and household condition survey.

“We went a step further to ensure that all the parties who are involved in the planning of various aspects have data for it.

He said that the association collaborated with CBN, World Bank, Ministry of Power, Works and Housing, Federal Mortgage Bank of Nigeria (FMBN) , NMRC , Value Chain, NpopC, and other stakeholders.

“We also collaborated with the National Bureau of Statistic (NBS), National Population Commission (NPC) to be able to have the NRE-DCMP which is a novel thing that has never happened before,” he added.

He further noted that the data had input on land administration and the 37 land administration entities in Nigeria including the improvement that could be brought to bear on them.

He added that the collated data included issues of mortgage law and foreclosure law as well as how to standardise operations of various institutions to ensure a developer received a standardise allocation letter.

Chime explained that the collated data would also dwell on how to standardise the deed of legal mortgage and deed of assignments in various registries to ensure it’s financial acceptance.

“On affordability we want to know the numbers and the people in the 774 LGAs who need the houses and their affordability reach so that we will stop the issues of having duplexes everywhere or building houses people cannot buy.

“So we can now do targeted construction that can only happen when we have the data on affordability and business data to know the people who are developing the houses.

“We also have housing condition which is the baseline to ascertain the condition of existing houses in the 774 local government or the 37 entities we have in 36 states and FCT.

“These components are what we have gone on to do by organising the NREDCMP,” he said.

According to him, the association has been able to ensure the various stakeholders have understanding of how all the data they want to work upon were collated, gathered and analyse.

Why 2019 Expo Will Be Best Ever

In an interview granted Housing News, the President of Real Estate Developers Association of Nigeria (REDAN), Rev Ugo Chime (UC), reveals why this year’s Expo will be the most improved and anticipated.

This year’s theme is, ‘’REAL ESTATE DEVELOPERS: THE BEDROCK FOR NATIONAL ECONOMIC STABILITY.”

According to him, the REDAN 2019 Expo is the third edition and it is aimed among other things to bring to floor the professional developers in the real estate and housing industry, and discuss how best they can serve as a catalyst in the development of the Nigeria economy.

Other Key Activities

Activities lined up includes mandatory continued professional development for participants; opportunities for the players in the industry to showcase their products; and the programme will also feature exhibition of building materials and corporate presentation of new products. This year’s expo will feature many exhibitions of real estate projects across the country, it will also feature display of new building technologies, innovations in home interiors and design.

The Guests of Honor

The guest of honor for this year’s REDAN EXPO is no other person than the Minister of Power works and housing, Mr Babatunde Raji Fashola. He will be the one to officially declare open the EXPO on the 7th of May.

The Speakers at This Year’s Expo?

This year’s lead guest speaker is no other person than Mr. Hakeen Ogunniran, who is the present Managing Director of Exima Realities. He was the former Managing Director of UBDC. He will be speaking on ““Harnessing Real Estate For Economic Development in Nigeria: Issues, Challenges and Solutions” and proposing a reform agenda.

Other guest speakers include Mr. Femi Adewole, the chief Executive managing director of family home funds.

Mr Akinwumi of ADB Abuja will also be delving into and speaking to us on a number of issues that will help unlock the potentials in our sector.

Standard Organisation of Nigeria(SON) will also be there to educate and inform

Expected benefits of attending this Expo

The 2019 REDAN Expo will create an unparalleled network opportunity for stakeholders who will be participating; it will be an avenue for stakeholders and other members who are looking for opportunities to relate with Family Homes Fund — a new establishment of federal government, to meet with the MD and get to know how they can benefit from Family Homes fund. For the first time, REDAN is collaborating with CBN and six other agencies which will be launching Real Estate Data at the opening ceremony. This year’s Expo will also be attended by all the Chief Executives from Federal Mortgage Banks in Nigeria, Mortgage Finance, Family Homes Funds and others including the Federal Ministry of power works and housing.

Also there will be the commencement of REDAN Initiative on Estate Endorsement, and Building Materials Endorsement, aimed at stemming quality challenges in the process and products on offer.

Family Homes Funds will also be there to unveil the array of novel and innovative real estate financing products they have.

Many Firms will also have their products and services on display.

REDAN Expo Set to Go

With the responses from people, stakeholders and partners, REDAN has assured that they are ready and good to go. The necessary logistics have been put in place and all expected participants have registered.

“This year’s REDAN EXPO is going to be greater and better than the previous ones. In that line, we are calling all stakeholders to give us their full support as always,” Chime said.

REDAN is an umbrella body of all real estate developers in the country. They’re the ones handling the supply side of the housing and construction industry. While people make demands, REDAN supplies.

Pension contributors, retirees get more investment windows

Pension contributors and retirees in Nigeria will now have more choices regarding where their pension fund assets will be invested, BusinessDay has learnt.

This is as National Pension Commission (PenCom), the industry regulator, has expanded the multi-fund structure from the initial four to six.

Whereas the initial multi-fund structure which was implemented in July 2018 covered Funds I-IV, the Commission has added Fund V, which is the micro-pension fund, and Fund VI, which is the noninterest-compliant instrument, also called Sharia-compliant or ethical funds.

The inclusion of micro pension and noninterest-bearing funds as part of the multi-fund structure is expected to enhance earnings growth of pension fund assets, said Ronke Adedeji, president, Pension Fund Operators Association of Nigerian (PenOp), who confirmed the development.

Pension fund assets under management rose to N8.74 trillion as at the end of February 2019, while the number of retirement savings account (RSA) holders stood at 8.55 million.

“The expectation is that practically every Nigerian adult will have somewhere to fit in,” said Adedeji, who is also managing director/CEO of Leadway Pensure, a pension fund administrator.


She added that the noninterest-bearing funds would take care of the Muslim faithful and Sharia-compliant citizens who prefer that their contributions are invested in a particular way that aligns with their belief.

Noninterest-compliant instruments are financial securities and specialist investment funds that comply with the provisions of Islamic Commercial Jurisprudence (Shariah) and any other established noninterest principles as approved by the Advisory Council of Experts, or any other body, constituted by the Securities and Exchange Commission (SEC) and/or the Central Bank of Nigeria (CBN) from time to time.

In a new circular to PFAs titled ‘Regulation on Investment of Pension Fund Assets’, which was seen exclusively by BusinessDay, PenCom said the multi-fund structure would comprise Fund I, Fund II, Fund III and Fund IV (retiree fund), and they would differ among themselves according to the overall exposure to variable instruments.

The regulator added that there would be additional two funds – Fund V (micro pension fund) which will be for contributors under the Micro Pension Scheme, and while Fund VI (non-interest fund) for contributors who choose to have their pension contributions invested in non-interest money and capital market products.

The Commission also mandated the PFAs, effective from the date of implementation of the multi-fund structure, to allocate contributors to various fund types.

According to PenCom, membership of Fund I shall strictly be by formal request by a contributor; Fund II shall comprise active contributors who are 49 years and below as at their last birthdays; active contributors who are 50 years and above as at their last birthdays shall be assigned to Fund III; while Fund IV shall strictly be for RSA retirees only.

In the same vein, the Commission said Fund V shall strictly be for contributors under the Micro Pension Scheme, while Fund VI shall be for those that choose to have their contributions invested in non-interest money and capital market products.

PenCom also stated that where the investment is in a non-interest-compliant money market instrument, it shall be in compliance with the CBN’s guidelines for the regulation and supervision of institutions offering non-interest financial services.

There are 274,000 retirees currently receiving their monthly pensions, either through the programmed withdrawal (PW) or insurance annuity, according PenOp.

Source: By Modestus Anaesoronye

Nigerian states generate N1.1trn in 2018 as Ondo records fastest IGR growth

Ondo State outran 35 other states in the country in the accrual of Internally Generated Revenue (IGR) in 2018, latest states IGR data by the National Bureau of Statistics have shown.

Ondo grew its IGR by more than double to N24.79 billion in 2018 from N10.93 billion achieved a year earlier, causing the state to jump 11 steps to become ninth-highest revenue-generating state of the federation after Lagos, Rivers, Ogun, Delta, Kano, Kaduna and Edo States which sustained their positions.

Lagos generated N382.2 billion as revenue in 2018, representing a 14.4 percent increase compared with N333.97 billion realised in 2017. Rivers recorded a 26 percent growth in its IGR to N112.8 billion from N89.5 billion, while Ogun raised N84.55 billion as IGR in 2018, about 13 percent higher than N74.84 billion recorded in the previous year.

As a result, the combined revenue received by the three states accounted for 52 percent of the total revenue of N1.10 trillion generated by all the Nigerian states in 2018, which is 17.8 percent more than N936.47 billion recorded in 2017.

The total growth was driven by increases in the IGR of 32 states that recorded growth, even as four other states comprising Osun, Benue, Cross River and Abia recorded worse revenue performance in the review year compared with 2017.

Osun’s IGR fell the most to N10.38 billion from N11.73 billion. Benue followed closely with a 9.55 percent decline to N11.22 billion from N12.4 billion, Cross River was down by 3 percent to N17.55 billion from N18.1 billion, while Abia recorded a marginal drop of 0.55 percent to N14.83 billion in 2018 compared with N14.92 billion received in the previous year.

However, the revenue generated by each of the four states in 2018 was more than Yobe, Kebbi, Taraba, Ebonyi, Adamawa, Ekiti, Borno, Katsina, Gombe, Nassarawa, Zamfara, Jigawa and Bauchi.

Yobe recorded the lowest IGR of N4.38 billion. Kebbi trailed with a total internally generated revenue of N4.88 billion, while Taraba generated the third-lowest revenue of N5.97 billion in the country in 2018.

Also, the Federal Capital Territory (FCT), Abuja generated N65.52 billion as IGR in the review period.

Source: By OLUWASEGUN OLAKOYENIKAN

Nigeria unemployment rates hit 33.5percent

The unemployment rate may increase from 23.1 percent to 33.5 percent by 2020, the Federal Government announced on Thursday.

The Minister of Labour and Employment Senator Chris Ngige disclosed this while declaring open a two-day workshop on breaking the resilience of high unemployment rate in the country in Abuja.

He described the incessant increase of unemployment in the country was alarming.

The Minister said the high unemployment rate of 23.1 per cent, and underemployment of 16.6 per cent presented by the National Bureau Statistics (NBS) in its 2019 report was alarming.

Ngige said: “It is a worrisome status as the global poverty capital (World Bank, 2018) and concomitant high prevalence rate of crimes and criminalities, including mass murders, insurgency, militancy, armed robbery, kidnappings, drug abuse, among others.

“As if this situation is not scary enough, it is projected that the unemployment rate for this country would reach 33.5 per cent by 2020, with consequences that are better imagined, if the trend is not urgently reversed.

“It is a thing of joy to note that Nigeria has not been resting on her oars over the years in terms of dedicated efforts to curb the unemployment problem”.

The Minister said further that various government social intervention programmes targeted at reducing youth unemployment and eradicating poverty have been implemented by different administrations since independence.

According to him, available records show between 1972 to date, about 14 different social intervention programmes have been implemented, including the National Accelerated Food Production Programme (NAFPP), implemented between 1972 and 1973 and the current National Social Investment Programme (NSIP), which has been on-going since 2017, embedded in the National Economic Recovery and Growth Plan (ERGP) 2017-2020.

Despite this, he lamented unemployment rate and poverty levels have been on a steady path of growth, indicating high resilience against the intervention efforts.

He called for a collaborative mechanism that would yield desired results while assuring that the recommendations from the workshop will receive prompt and sustained attention.

Permanent Secretary in the Ministry, William Alo, said the workshop was aimed at examining issues around the persistent high unemployment rate in Nigeria with a view to making concrete recommendations on how to tackle the menace.

He said: “The fact remains that the consequences of high unemployment rate in Nigeria affect each and every one of us as individuals and as members of the Nigerian societies.

“The objectives of this workshop are, therefore to present the findings of the survey on how to break the Resilience of High Unemployment Rate in Nigeria to the peer community.

“To stimulate actions towards exploiting untapped available options for massive job creations; to chart way forward on immediate next steps that would yield measurable results”.

Country Director of the International Labour Organisation in Nigeria, Danis Zulu said unemployment was a major concern to the ILO, especially in Nigeria with significant proportion of unemployed youth.

EU unveils solar tree, contributes 165m euros for renewable energy in Nigeria

The delegation of the European Union (EU) to Nigeria and Economic Community of West African States (ECOWAS) has unveiled a solar tree at the EU Delegation Office Complex Abuja, to highlight the union’s commitment to renewable solar energy in Nigeria.

Solar power plant Ambassador of the EU to Nigeria and ECOWAS, Ketil Karlsen, unveiled the solar tree on Thursday to spotlight its current actions in Nigeria and as part of activities to highlight the use of the sun as a source of energy.

”On the occasion of Europe Day this year, we decided to put the spotlight on one particular issue that is vital for everything else and that is the accessibility to affordable energy.

”For the availability of jobs, it is absolutely vital that businesses can thrive and for businesses to thrive it is important that they have access to affordable energy in order to compete,” Karlsen said. Also read: EU to support Nigeria’s sustainable energy investment — Karsen Karlsen revealed that the EU set aside 165 million euros to cater to over 90 million Nigerians and business owners without access to affordable renewable energy.

”A very significant number of people do not have access to affordable energy options, as a result, the EU has set aside 165 million Euros, supplemented by other financing opportunities with specific funding for Nigerian businesses in order to promote better use of renewable energy in this country.

”This room we are sitting in is being fueled by renewable energy, very soon we will unveil the source of that energy in this compound that will be fueled by solar energy. ”

We thought that instead of preaching this we should walk the talk ourselves by making use of renewable energy sources for our own day to day work. ”Now we need to reach out to the people that need renewable energy all over Nigeria.

”We are meeting and working closely with federal and state counterparts to see how life-changing it could be when people who do not have access to affordable energy all of a sudden have it, this also affects business owners,” he said.

Source: Vanguard

The Lamentations of a middle class Nigerian

About a week ago, I stumbled on a Facebook post on the pages of Agunze Azuka Onwuka. David Hundeyin, CEO of TupstartNG and a columnist with this publication wrote the piece.

According to the piece, he had attended the alumni meeting of Atlantic Hall, a private coeducational secondary school in Lagos, and their discussion was dominated by how they all wanted to leave Nigeria for greener pastures through migration to Canada, the United States of America, United Kingdom, and Australia down under. He made three important points that I believe we need to interrogate. This is important, as many Nigerians that have commented on the piece did not see the connection between these points and the scale of Nigeria’s present crisis.

The first point he made was about the composition of the group discussion. As alumni of Atlantic Hall, they were all middle class, arguably considered the elite of this country. They all had cars, and some of them own houses or inherited the ones that their parents built. They were not only middle classes by virtue of the jobs and assets they keep, but inherited middle class statuses from their parents. This is so because their parents were able to afford to send them to such prestigious school. Currently, they all have jobs and businesses and they enjoy reasonable standard of living. Despite all these, they wanted to leave Nigeria.

The second point is as important. He said that most of them actually returned to Nigeria after studying and starting their careers abroad. Majority of them had studied abroad; some have 2 – 3 degrees and started their careers in these countries. Many came back to Nigeria between 2000 and 2013. They came to Nigeria to build and share in the above population growth rate averaging over 5% during that period.

The third point he made is that this group of Nigerians – middle class, reasonable standard of living, with jobs and businesses – are now leaving in droves. This group of Nigerians are stampeding themselves out of Nigeria with familiar destinations such as the United Kingdom, United States of America, Canada and Australia down under being the common ones. He argued that they are migrating, some selling properties in the process, because Nigeria is strangulating them and because they are becoming poorer.

Now, there is no educated and above poverty level Nigerian that is not familiar with this story. It is the descriptiveness, apt, and literary simplicity that made the post very unique. Hundeyin described the hopelessness and desperation of Nigerians in under 500 words. Indeed, the piece followed a similar, but expansive piece I wrote for this publication June 2018.

In the piece, titled “Nigeria’s broken middle class”, I argued that given the trend in the first decade of this century, many had thought that it was only a matter of time before Nigeria’s middle class will act as the foundation for continuous significant foreign investment inflows, sustainable growth and jobs. But since the dramatic decline in oil prices in 2014, and the economic recession of 2016, the middle class has shrunk and continues to shrink, along with the expectations for the role it was to play in expanding Nigeria’s potential future growth and prosperity.

As data has continued to show, and never mind what the government is telling you, the greatest danger of Nigeria’s current poor economic growth is that the poor that had aspirations to enter into the middle class are falling farther behind, while those in middle class are becoming the poor.

Yes, in the growth of the middle class in the first 15 years of this century, a number of mistakes were made. First, the middle class had expanded on the back of industries that were most vulnerable to decline in oil prices. These industries, including financial services, telecommunications, real estate, and government sectors rely on oil prices themselves. Second, the economic reforms of the 2000s, though sound, did not go far enough. Consequently, the reforms did not deepen Nigeria’s productive base.

Third, the expansion of the middle class had been on the basis of expansion of income, and not wealth. The income expansion, within a decade, did not create sufficient wealth to withstand the significant shock that arise following fall in oil prices in 2014. Finally, the rise in Nigeria’s middle class belies the unsustainable level of inequality in the country. Consequently, as a rising economic class, Nigeria’s middle class was still very vulnerable to significant fall in oil prices.

However, and in conclusion, despite these policy errors and the decline in the income that followed the decline in oil prices, there is something missing in many of the migration analysis of the last four years under President Muhammadu Buhari. The missing point is a new level of fear and hopelessness. So Nigerians are not leaving in droves purely for economic reasons, but also because of the fear and hopelessness about Nigeria’s future.

I thank you.

Source: By Ogho Okiti

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