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Economy

FG Inaugurates Steering Committee To Design New Economic Blueprint

The Federal Government has set up a steering committee to work on the design of a new economic development plan that will guide spending and economic decisions from 2021 onwards.

The Minister of State for Finance, Budget and Economic Planning, Mr Clement Agba, disclosed this in Lagos, during a working visit to the Centre for Management Development, Shangisha.

The ERGP is a Medium Term Plan for 2017 to 2020, developed by the Federal Government for the purpose of restoring economic growth while leveraging ingenuity and resilience of Nigerians.

Agba said the fluctuations in global oil prices and subsequent recession of 2016 had sent Nigeria into five quarters of negative Gross Domestic Product, which necessitated the design of the ERGP to channel resources into the right places.

Nigeria, as a result of the ERGP, had so far recorded 11 quarters of positive GDP growth, he noted.

“With the expiration of the ERGP, another economic development plan would need to be drawn up,” he said.

Speaking on the sidelines of the visit, he said, “We have identified those people that we need to reach for acceptance. Already some of the committee members are working, so it is not as if there is no work going on. A lot of work started sometime in November through December. The real technical work is done at the technical working level.

“The central working committee is already at work. But at the steering committee level we want it to be truly national, so we are reaching out to capture most of the diversities in Nigeria.”

He said the economic plan would be a federation affair instead of a Federal Government affair, adding that studies were ongoing to review the impact of the ERGP

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Economy

Seven Vice Chancellors Indicted Over N896m

The Federal Government’s annual audit report has uncovered financial irregularities of over N896m in the accounts of seven recently established federal universities.

The 2017 report from the Office of the Auditor-General of the Federation, titled, ‘Auditor-General’s Annual Report on the Accounts of the Federation of Nigeria 2017’, obtained by our correspondent, which indicted the universities for the years 2015 and 2016, recommended that the vice-chancellors of the respective institutions during years under review be made to answer for the monies unaccounted for.

The indicted federal universities are Federal University, Wukari, Taraba State; Federal University, Dutsin-Ma, Katsina State; Federal University, Lafia, Nasarawa State; Federal University, Oye-Ekiti, Ekiti State; Federal University, Birnin-Kebbi, Kebbi State; Federal University, Dutse, Jigawa State; and Federal University, Lokoja, Kogi State.

They are among the nine federal universities established by former President Goodluck Jonathan’s administration in 2011.

For the federal universities in Wukari, Dutsin-Ma, Oye-Ekiti, and Birnin-Kebbi, the report listed irregularities totalling N754m.

The report said, “During the periodic check of the Federal University Wukari, for the year 2015 and 2016, the following were observed; One, violation of E-payment policy – payments were made to officers who were not the direct beneficiaries amounting to N17,924,800 in contrast to the electronic payment policy of the Federal Government.

“The recommendation is that the vice-chancellor is required to account for the sum of N17,924,800 on account of non-compliance with the above policy. Also, there was misapplication of N2,091,425.”

At the Federal University Dutsin-Ma, Katsina State, the report noted that between January and December 2016, rent recoveries of N31,461,559 was unaccounted for. It therefore said appropriate sanctions stated in Financial Regulation 3106 should be invoked on the vice-chancellor, while noting that there was also irregular payment of N8,437,595 as furniture allowance.

The report added, “For the period check conducted at the Federal University, Oye-Ekiti, Ekiti State, for the period ended 31st December, 2016, the following were observed; non-remittance of internally generated revenue put at N24,812,174. The risk is loss of revenue by the Federal Government and the management’s response to my query is not tenable.

“The recommendation is that the vice-chancellor is required to immediately remit the sum of N24,812,174 being 25 per cent of the IGR into the Consolidated Revenue Fund. Also there was irregular sponsorship for International Academic Training put at N29,613,025.”

At the Federal University Birnin-Kebbi, Kebbi State, the report noted that between January 2015 and December 2016, N67,028,049 was paid for an abandoned contract, while payment for work not done stood at N17,584,612.

It added, “Also, there was award of contract without following due process put at N509,469,337. Furthermore, there was payment of unapproved allowances put at N50,993,125. The sanction stipulated in financial regulation 3106 should be imposed on the vice-chancellor. The management’s responses to the above issues did not address the issues.”

The report added that for the universities in Dutse and Lokoja, there were irregularities amounting to over N142m.

It stated, “During the periodic checks of Federal University Dutse, Jigawa State, the following observations were made; payment without payment voucher put at N7,493,260. Also, there was an irregular payment to a former vice-chancellor put at N15,868,917. Furthermore, there was purchase without an evidence of delivery put at N8,249,600. There was also overpayment of N1,502,381 to a contractor.

“During the periodic checks of the Federal University Lokoja, Kogi State, the following were observed; non-remittance of internally generated revenue put at N61,930,601. Also, there was payment of unapproved allowances put at N50,350,728. The recommendation is that the vice-chancellor is required to recover the wrongly paid allowances and remit to the CRF.”

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EconomyFront Page

2020: Rivers Budget Of “Reassurance, Profound Impact For Inclusive Growth And Shared Prosperity”

Rivers State Governor, Nyesom Ezenwo Wike on Tuesday,  presented a budget proposal of N530,813,357,619.00 for the 2020 fiscal year to the State House of Assembly for consideration and passage.

The 2020 Budget of Rivers State is christened: Budget of “Reassurance, profound impact for inclusive growth and shared prosperity”. The Rivers State Government in 2019 budgeted N480billion for recurrent and capital expenditure.

Presenting the Budget Proposal, Governor Wike said the budget has a Total Recurrent expenditure of  N156,659,436569.00, while Capital expenditure is N374,153,920,743.00.

Governor Wike said: “The capital expenditure for 2020 is estimated to be N374, 153,920,743.00, which constitutes nearly 70% of the total budget. The summary of sectoral allocations of the capital expenditure are as follows:

·Administrative sector: -15, 061,008,000.00

·Economic sector;- 136, 444,523,766.60

.Law and Justice:- 2, 400,000,000.00

·Social sector – 138, 558,553,322.35

·Special Head:-57, 367,124,462.05

·Loan repayments –    24,322,731,192.00

“ The substantial increase in capital over recurrent expenditure, once again reflects and underscores our commitment to direct more resources to the growth and productive sectors of our economy. This Administration is poised to fulfill every promise it made to our people. Consequently, various expenditure portfolios have been allocated to all the relevant MDAs to fund capital expenditures and deliver physical and socio-economic infrastructure and development for our people.”

The Highpoint of the recurrent expenditure is the allocation of funds for the new minimum wage and the recruitment of new employees.

“The sum of N70,227,748,472.32 is earmarked for salaries and wages; N8,000,000,000.00 for the new minimum wage, while N18,429,375,634.45 is for overheads. Also, N5,000,000,000.00 is set aside for new recruitments, N3,000,000,000.00 as counterpart fund for pensions, N900,000,000.00 for death benefits and N33,176,728,931.33 as monthly pensions and gratuities. Government has also provided over N400,000,000.00 as counterpart contributions for donor programmes”, he said.

Governor Wike stated that the sum of N93,968,823,766.60 has been provided for the Ministry of Works to continue to fund the strategic road development programme for 2020. He said that several roads are under construction, but the State Government is committed to delivering some key roads by the end of 2020.

The roads include:

· Kira – Sakpenwa – Bori – Kono road linking Gokana Tai, and Khana Local Government Areas;

·Andoni – Opobo Unity road linking Opobo/Nkoro and Andoni Local Government Areas

· Abonnema Ring Road in Akuku Toru Local Government Area

· Isiokpo internal roads in Ikwerre Local Government Area

·Rumuekini – Aluu road linking Obio/Akpor and Ikwerre Local Government Area

·Rumuepirikom internal roads in Obio/Akpor Local Government Area

· Rumuakunde and Isiodu roads in Emohua Local Government Area;

· Akaer Base road, Rumuolumeni in Obio/Akpor Local Government Area

·Expansion of Nzimiro, Herbert Macaulay, Amassoma and other sundry streets within Amadi Flats, old GRA, Port Harcourt

·  Eteo – Sime – Nonwa – Kira road linking Tai and Eleme Local; Government Areas;

· Eleme – Afam road linikng Eleme and Oyigbo Local “Government Areas;

· Rumuji – Ibaa – obele – isiokpo road;

·Omoku – Egbema road dualization in Ogba/Egbema/Ndoni Local Government Area;

·Ula Ehuda – Odioku – Anwunugboko – Ubeta – Ihuechi – Odiereke road;

·Omoku-Aligwu-Kreigani-Oduoboburu road;

· Odieku community internal roads in Ahoada West Local Government Area;

·Abuloma/Fimie/Ozuboko and AmadiAma Community road in Port Harcourt City Local Government Area;

·Bolo community internal roads in Ogu/Bolo Local Government Area;

·Umuogba – Umuokpurukpu – Umueke – UmunjuUmuelechi – Eberi roundabout link road in Omuma Local Government Area;

· Rebisi Flyover in Port Harcourt City Local Government Area;

· Okoro-Nu-odu Flyover bridge at Obio/Akpor Local Government Area;

·Rumubiakani Flyover at Obio/Akpor Local Government Area;

· Expansion of Ikwerre road from Education Bus stop to Igwuruta sections spanning Port Harcourt, Obio/Akpor and Ikwerrre Local Government Areas; and

·Phase one of the Trans-Kalabari road network.

The Governor added that the State Government has allocated N26,087,783,322.35 for e Bureau for Special Projects to fund the completion of key ongoing projects .

He noted that the sum of N3,000,000,000.00 has been allocated to the Ministry of Transport to complete the Bonny/Bile/Nembe jetty and embark on other key projects, including rehabilitating of bus stops to advance the transport sector in the State.

The Governor proposed the sum of N49.471 billion to fund the education sector for 2020.

He said: “ This sum represents 20% of the total budget and is the highest ever budgetary allocation to education, reflecting the level of our commitment to investing in the future of our children.

“In 2020, we will continue to ensure the systematic rehabilitation, upgrade and transformation of our primary, secondary and tertiary institutions and build new ones where the population demands to deliver a more conducive learning environment across schools in Rivers State. For basic education, we will promptly access the contributory grant from the Federal Government and deploy same to improve access, standards and quality. We will also continue to improve access to ICT infrastructure, employ more teachers to further reduce the teacher/learners’ ratio, especially in English Language, Mathematics, Science and technology and ensure the training and retraining of teachers to deliver measurable results and outstanding outcomes in our primary and secondary schools.”

The Governor said that the following schools would be upgraded in 2020:

°Enitonia High School, Port Harcourt in Port Harcourt City Local Government Area;

·Government Secondary School, Ogu in Ogu/Bolo Local Government Area;

·Community Secondary School, Rumuolumeni in Obio/Akpor Local Government Area;

·Community Secondary School, Rumuepirikom in Obio/Akpor Local Government Area;

·Bonny National Grammar School, Bonny in Bonny Local Government Area,

·Government Secondary School, Okarki in Ahoada West Local Government Area,

·Western Ahoada Central High School, Ahoada in Ahoada East Local Government Area,

·Government Secondary School, Abua in Abua/Odual Local Government Area,

·Government Secondary Schoo, Okporowo -Ogbakiri, Emohua Local Government Area

·Government Secondary School, Obuama in Degema Local Government Area;

·Community Secondary School, Omuanwa in Ikwerre Local Government Area;

· Model Secondary School Bakana in Degema Local Government Area; and

·Model Secondary School, Tombia in Degema Local Government Area.

In a bid to strengthen the agricultural sector, Governor Wike earmarked N40,400,000.00 billion to the sector for the 2020 fiscal year.

Specifically, the Rivers State Government will:

(i) invest and support the commercial production of cash and other crops to which we have relative advantages, such as cassava, palm oil, yam, plantain, banana, rice and vegetables for both domestic and export markets;

 (ii) revive the school-to-land programme and engage over 10,000 youths in commercial agriculture;

 (iii) establish farmer input support programme to provide farming inputs to farmers across the State;

 (iv) train and build the capacity of Rivers State farmers to engage in productive and profitable commercial agriculture, including farming in crops, poultry, piggery, and fisheries;

 (v) complete the Cassava Processing Plant at Afam in Oyigbo Local Government Area.

To promote healthcare delivery to Rivers State, Governor Wike proposed N38,900,0healthcare for the development of healthcare facilities and programmes in 2020.

He said the State Government will complete and deliver the Mother and Child hospital with capacity for 108 patients as well as the Degema and Bori regional referral hospitals with combined capacities of over 200 beds.

He added that the State Government will  continue with the construction of the remaining 3 regional hospitals at Okehi, Omoku and Ahoada to advanced stages;

and  continue with the restructuring, upgrade and expansion of the Rivers State University Teaching Hospital.

Governor Wike said his Administration will  improve on emergency medical services by procuring more ambulances to ensure effective and more responsive emergency and trauma management.

For youths and women, Governor Wike allocated a combined sum of N16 billion to the Ministries of Commerce and Industry, Empowerment and Employment Generation, Youths, Sports, and Women Affairs to initiate, coordinate and implement appropriate programmes for poverty eradication, job creation and empowerment for youths and women. The objective is to create not less than five hundred thousand jobs for our youths in 2020.

The Governor said that the State expects the onward economic growth to continue in 2020 peaking around 3.5% to 3.7% with significant improvements in foreign and domestic investment inflows to the different sectors of the economy.

He said the growth in 2020 will come with associated effects on job creation and other economic opportunities for Rivers people.

He said:  ”Given therefore the fundamentals of our economy, which has remained sustainable with a steady growth rate since 2017, it is relatively safe to conclude that the economic outlook of our State for 2020 remains positive.”

He also gave an appraisal of the performance of the 2019 Budget of the State.

He said: “At as end of October 2019, total net revenue collected between January and October was N261,074,352,792.23 representing about 64.4% of total revenue estimates.

“Further breakdown shows that only N37,102,734,345.42 was collected as FAAC receipts; N79,794,256,970.19 as 13% Oil Mineral Fund, N90,923,318,238.78 as taxes, and 14,666,472,353.79 as Value Added Tax. Also, N600,000,000.00 was received as Paris Club Refund, N25,000,000,000.00 as local credits, while others, including exchange gain, forex equalization and excess bank charges amounted to N7,496,428,837.31

It is obvious from these figures that the 2019 budget under performed by about 36% on the revenue side. However, contributions from internally generated revenue is expected to peak at a much higher rate than what was projected for the year.”

Governor Wike said that over the last four years, the development successes of his Administration are visible across the State.

He said: “By and large, the development effort of our government across all indices of our NEW VISION blueprint is clearly evident everywhere you go even as we admit that there is still much more to do to realize our collective aspirations and fulfill our destiny as a united, peaceful and thriving society.

“It is on this optimistic premise that we have come to present the Rivers State Budgetary Estimates for fiscal year 2020 before the State House of Assembly for the consideration and passing into law. Mr. Speaker, the 2020 budget is about effective resource mobilization, responsible management of available finances, living within our means and delivering efficient public services to our people. “

Governor Wike assured that the Rivers State Government will work hard to mobilise resources to implement the 2020.

He said: “We will build and consolidate on the gains and progress of 2019 to deliver on the commitment of this budget for the benefit of our people. We will mobilize resources from the different sources and scale up investments in infrastructure, human capital development and the productive sectors of our economy to create jobs and improve the wellbeing of our people. And as our economy grows and creates opportunities, our people will benefit and enjoy a better standard of living.

“ Mr. Speaker, Honourable Members, I am confident that, working together, and with the support and prayers of our people, we can achieve the set targets of this budget.”

In his remarks, Speaker of the Rivers State House of Assembly, Rt Hon Ikuinyi Ibani assured the Rivers State Governor and Rivers people that the Assembly will diligently consider and pass the budget to facilitate the continued development of the state.

He said budget is critical to the development process. He commended Governor Wike for his commitment to the development of Rivers State. He commended the Rivers State Governor for prioritising capital expenditure.

The Speaker said that the Rivers State House of Assembly has passed the Medium Term Expenditure Framework for the development of the State.

He said that the Executive-Legislative relationship is not about confrontation, but about cooperation and development.  He assured the Governor of support of the State Assembly for the development of Rivers State.

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BusinessCommentsEconomy

Loan For SMEs:Taming The Shylocks. Ojo Akin-Longe

As the Central Bank new initiatives such as the credit card facilities to boost the creative industry, is well thought but should be followed through as loans are issues of concern as many have experienced.

We applied for credit after doing what I thought was a very thorough feasibility report and confident we had a very good business.  Even at that, I knew one of the ‘Big Men’ at the top of the bank whom I could reach should the need arise.  The financing proposition was for the bank to finance part of the equipment purchase, whilst we provide part financing, and as well bear all installation costs and purchase additional equipment locally.  The bank would in effect also make the fund transfer and so they were involved in the transaction.

 In all, it would be a 50/50 funding.  We already had the business going and the additional contribution from the bank would be far less than the current value of the business.  Once we got confirmation from the bank that the credit would be approved, we effected payment of initial 10% deposit amounting to Euro 20,000.  It was our first request for bank financing so we made everything pretty clear and based on what we really needed.

After the initial deposit payment, I was to run after the bank severally.  I followed up, begged and pushed and was really shocked at the attitude.  With delays setting in, the supplier promptly wrote to informed us that we would be surcharged for the delayed payments otherwise they’d cancel the transaction and we forfeit the deposit.  We further begged and pushed and eventually, the bank ‘graciously’ obliged us the credit, they gave us 65% of what we requested.  I felt this didn’t connect so I asked what happened and was told that, that was all the bank could afford.  Caught between losing our deposit and having faith that some miracle could happen we trudged on. 

When the equipment arrived, we started installation and commissioning then I started seeing signs of trouble.  I alerted the bank; they said I should be grateful I got given in the first place.  We channelled all funds we had into the commissioning, essentially using operational funds for capital expenditure.  It wasn’t long before we got stranded.  Repayment time was up and the bank promptly demanded that we start paying.  I took every necessary document to show to them, tried to talk with that we were actually stranded and couldn’t run. 

All the talks seemed to count for nothing.  I called the ‘big man’ yet again, who wondered why we were given less than we requested stating that the practice is that a customer got what is applied for, otherwise they reviewed and agree with the customer to reduce if there were concerns that the request was frivolous or padded.

Subsequently, my banker again, ‘graciously’ announced that the total facility was granted at the first instance and they had deliberately disbursed the fund short to see if we could survive.  I raised the fact that we had been stranded for about four months.   That we had had several meetings with the bank on the situation, and that they mentioned that we were being surcharged 40% default charges and asked if that meant anything to him. He just shrugged off. 

The nightmare didn’t end there.  They eventually released the outstanding funds to us.  Then a new twist, we would now have to repay in 10 months.   We now had two concurrent loans running together with repayments falling due first, in the first week of the month and next by midmonth. It isn’t allthat, the loan amount had now increased significantly as previous unpaid amounts which earlier fell due were now charged at 40% interest for default.

I just stared at them.  I tried having a meeting with them they bluffed me.  The bank resorted to threats and intimidation.  I felt we borrowed the money and we must pay back and I was reluctant to make any case or be seen to be irresponsible, besides we were debtors and some sense of shame, if you know what I mean! Also, I felt I needed to show gratefulness for this bank’s ‘help’! 

At last, I talked with a Lawyer who was appalled at all these and suggested that I have to make the officials  understand that it mattered that they appreciate their culpability and that they couldn’t ride rough-shod over us, and that we would escalate and seek re-dress if need be.  I told him we owed and needed to pay, he said, yes, but responsibly so. 

Then I had one more meeting with the bank executives and very calmly took them through the credit journey showing them e-mails evidences, reminded them of the original request and letting them know that we were committed to paying back but it will have to be within responsible limit.  Expectedly, they backed down.

See my story.  The question is how do you grow an economy without the SMEs? And how do SMEs grow and survive without credit? How do small and medium scale enterprises access credit fairly and easily? How do we get credit within reasonable interest rates? How can we simplify credit application system and process? What thoughts do you have for financial security system that makes borrowers pay?

What changes do we need to make to our legal and judicial system to ensure accelerated judicial and legal process so that the wheel of justice will move in good time and in good speed? Are there venture capitalists out there? How do business people access you? Do banks have dedicated SME funds? What form of social engagement and responsibility can the banks can engage in to prime business knowledge and awareness to help viable and genuine business entrepreneurs build knowledge and capacity to help them better able to access credit? Do you have a successful credit application story? \

 Please tell it.  Is it true that Bank Managers actually own the loan shack businesses giving credit at up to 25% per month?  That they get the monies to their cronies and then direct bank customers to them? I heard so but I don’t know. Folks, how do genuine business people get credit besides getting from some relative or friend or well-wisher?  By the way, my MBA thesis is going to be on a comparative analysis of family and friend’s credit provisions for SME survival against the bank’s effort in this same direction, looking at the Nigerian example and using a special case study.

And you know, interestingly, it comes back to us all, the banks, the SMEs and the economy.  It works well, and we all benefit; a vibrant economy, more jobs, people off the street and yes, a safer world.

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EconomyFront Page

AfCFTA’s Deals And Nigeria’s Economic Growth. Manasseh Paul- Worika

‘Let me state unequivocally that trade is important for us as a nation and to all nations. Economic progress is what makes the world go round. Our position is very simple; we support free trade as long as it is fair and conducted on an equitable basis. Africa therefore needs not only a trade policy, but also a continental manufacturing agenda. Our vision for intra-African trade is for the free movement of Made in Africa goods. That is, goods and services made locally with dominant African content in terms of raw materials and value addition’.

Those where the words of President Muhammadu Buhari after signing the African Continental Free Trade Area (AfCFTA) Agreement at the Mid-year coordination meeting of the African Union and 12th Extraordinary summit on AfCFTA held in Niamey, Niger Republic recently.

The AfCFTA came into force in May 2018 after clearing a key procedural hurdle before ratification by the parliaments of 24 countries. It aims to bring all 54 members of the African Union (AU) together in a single market of 1.2 billion people by removing trade barriers such as tariffs across Africa.

The deal is expected to boost regional trade and allow companies to expand and enter new markets. Manufacturing industry currently accounts for only about 10% of the African Union’s combined GDP of $3.4 trillion and the trade deal could make the sector more competitive and productive.

All says that the African Continental Free Trade Area (AfCFTA) will create the world’s largest free trade area. It also estimates that implementing AfCFTA will lead to around a 60% boost in intra-African trade by 2022.

It is important to get it clear and in simple terms that free trade agreements are designed to cut trade tariffs between member countries. Tariffs are a form of tax, like a border tax placed on goods coming into a country for a range of reasons, sometimes to try and protect a home-made product. The “purest” Free Trade Agreement (FTA) removes all border taxes or trade barriers on goods. They get rid of quotas too. So there is no limit to the amount of trade to be done.

FTA’s also helping make a country’s exports cheaper and give easier entry to other markets. They come in all sorts of forms and with different rules but in short, they make trade between countries as liberal as possible and allow for more rules-based competition.

Nigeria had initially refused to commit, saying it needed to consult with domestic stakeholders before making a decision. Various concerns were raised which included the exposure of the already struggling local manufacturing sector to undue competition. According to the Manufacturers Association of Nigeria (MAN), the agreement will lead to job losses and increase unemployment amongst others.

The Federal Executive Council (FEC) last year approved the signing of the deal, which it said would boost the country’s export, spur growth and boost job creation as well as eliminate barriers against Nigeria’s products and provide a dispute settlement mechanism for stopping the hostile and discriminatory treatment directed against Nigerian natural and corporate business persons and other Africa countries. The President’s decision to initially put off signing the framework agreement for establishing the AfCFTA following protests by Major Labour Unions, last year, was on the heels of the warning that the deal would harm the economy.

A year and four months after his refusal to sign the agreement, upon due considerations with relevant stakeholders the president declared through the senior special Assistant to the President on Media and Publicity, Mallam Garba Shehu, that he would be signing the phase one of the AfCFTA agreement at the Mid-Year Coordination Meeting of the Africa Union and 12th Extraordinary Summit of the African Union in Niamey, Niger Republic.

Shehu, in a statement, said Buhari approved the recommendations of the Presidential committee on the Impact and readiness Assessment of the AfCFTA, agreement.

The statement read, “By this, he will be signing the phase one of the agreement in the course of his attendance at the Mid-year coordination Meeting of the African union and 12th Extraordinary Summit on AfCFTA in Niamey, Niger Republic. A country that signs the first level will then go into country level discussions leading to treaties after safeguards are agreed to”:

X-raying the unique essence of the framework agreement for establishing the AfCFTA, it is noteworthy that the AfCFTA is a brainchild of the African Union to deepen regional integration. It had been in the works since January 2012 – with Nigeria as one of its major promoters. However, local labor unions and big corporations have always been against it.

The agreement entered into force on 30th May 2019, within 14 months after its signature on 21 March 2018 in Kigali. It was negotiated in just over two years. Whilst the motivation towards closer economic integration is poised to change Africa forever, some experts see the entry into force of the AfCFTA as a truly momentous event.

The irony is stark, that amidst current global trade wars, Africa is now the torch bearer of multilateralism and open economic. However, African economic integration is developmental integration, designed to promote structural transformation, rather than being a traditional free trade area (FTA) obsessed primarily with market liberalization.

AfCFTA seeks to cover goods and services and has complementary programmes for infrastructure, industrialization, agriculture modernization, small scale trade, as well as innovation, intellectual property, competition and investment.

There has never been a better time to invest and trade in Africa. With a combined GDP of US $ 6.7 trillion in purchasing power parity, business and consumer spending at US S 4 trillion, over 400 companies with revenues of over US$ 1 billion, 60 per cent of the world’s arable land and vast strategic minerals, Africa seems ready to truly take off.

For African political, private sector and-intellectual leadership, the call of duty and question on the lips of all is that, does the framework guarantee or ensure that this trajectory is irreversible, and that decent jobs and incomes are equitably generated from increasing trade and investment.

Dissecting the benefits of the framework and what Nigeria must do to lead the pack in Africa, Dr. Jonah Akekere of the Department of Economics at the Niger Delta University, Bayelsa State said Nigeria has a large market and hence stands to benefit from the AfCFTA. Furthermore, Akekere believed Nigerian businessmen and entrepreneurs would have access to the African market, where they can buy and sell.

“As the largest concentration of black people in the world, Nigeria must lead by example in championing the cause for trade among African countries as well as pave the way for the continent to industrialize through trade. AfCFTA provides an opportunity for Nigeria’s private sector to explore and exploit the African market,” he said.

However, Akekere, noted that the downside is that Nigeria may be either a dumping ground for products from emerging economies or may be a point of re-exporting goods from China. He tasked public officials to ensure strict compliance with the rules and regulations governing trade in Nigeria, suggesting that policies must be put in place to ward against “dumping”.

In the words of Akekere, “Given the huge amount of smuggling into the Nigerian market, it is unlikely that import barriers would save uncompetitive Nigerian companies from the potential competition from other parts of Nigeria.”

In his analysis, Dr. Freeman Oigoli, of the Department of Political Science (Political Economy major), at the Niger Delta University noted that while the main benefit of AfCFTA to Nigeria is opening up most of the African market to companies based in Nigeria, the flip side is that companies from other parts of Africa will have nearly unrestricted access to the Nigerian market.

Oigoli cautioned; “With most trade barriers reduced, Nigerian companies would need to be very cost effective and competitive with their Africa 1 counterparts if they are to gain, rather than lose market share.”

“This is where the Nigerian government would need to quickly remove internal barriers that make operating in this country expensive. Issues like steady and cost effective power supply, efficient ports, good roads and rail transport, lower corporate and local taxes etc. Unless these barriers are eliminated, many Nigerian companies might struggle to hold on to their local, protected market and loose share to new entrants from Africa,” he added.

Beyond the signing, would Nigeria and its leaders truthfully harness this crop and build a sustainable inter-generational institutional memory for Nigeria that will keep the impetus into the future.

Concerning implementation, “the government must ensure that there are qualified officials with the provision of continuous training. Furthermore, this provides the need for recruiting competent hands to drive the implementation of the free trade arrangements,” Oigoli posited.

According to experts, before trade can actually happen under AfCFTA, the following should be in place; trade documents, tariff schedules, rules of origin and a system for addressing non-tariff barriers.

Countries need to be able’ to issue and process especially the new AfCFTA customs declarations and certificates of origin. And the private sector including the logistics industry needs to be familiar with and have confidence in these documents.

This is in addition to the universal trade documents, and product-specific regulatory documents, especially for agricultural and chemical products. Tariff schedules should be in place. Without them, one would not know the payable customs duties under AFTA on the 5,000 or so tradable products.

It is envisaged that bilateral negotiation of tariff offers would be too complex and take an overly long time. Every member state/customs territory would therefore be compelled to just produce a tariff schedule without further delay, covering 90 per cent of the products on which the tariff phase down is to commence immediately.

Nigeria, as the continent’s most populous nation and largest economy, has an important role to play as the “engine room” of the intra-Africa trade. For Nigeria, agreeing to sign this agreement will be of great benefit to all Africans.  With the elimination of trade barriers under this treaty, Nigeria will have the opportunity to harness most of its own resources that might be needed in some other African countries.

In 2017, export to other African countries accounted for 12 percent of Nigeria’s total export and only 4 percent of its impact came from other African countries, according to Nigerian government data. Nigeria mainly exports petroleum to other African countries. South Africa has been Nigeria’s largest trade partner in Africa, both in import and export. 

The country mainly imports polymers, fertilizers, prepared binders, and frozen fish from other African countries that are not members of the Economic Community Of West African States, of which Nigeria is the powerhouse. These products are subject to import duties.

With the removal of trade barriers through this treaty, Nigeria stands to gain a lot from new markets for its product. But to gain more from the AfCFTA, government must focus on investing in the industrial sector to ensure that goods and services manufactured in Nigeria meet up international standard.

Furthermore, focus has to placed on empowering local industries to ensure that local industries are not placed on undue competition with manufacturers from other African countries. This will enable the production and exportation of standard products. At large, the fear of Nigeria being a “dumping” zone for other African produced goods and services can be checked.

It is vital that Nigeria commit to continue improving institutional capacities to efficiently tax and redistribute the gains from the CFTA. This includes integrating and harmonizing regulatory measures, eliminating non-tariff barriers to trade and investment, and facilitating the entry into the formal economy.              

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BusinessEconomy

Seaports Shut As Maritime Workers Begin National Strike

The Maritime Workers Union of Nigeria, MWUN, has directed its members to withdraw their services and commence a nationwide industrial action over unpaid wages to dockworkers, among other issues.

The action is expected to substantially shut down ports operations leading to huge losses in terms of revenue to government and organizations especially in the upstream oil and gas operations.

Addressing officials and a cross section of dockworkers at the Dockworkers’ Branch of MWUN, Lagos, president general of the union, Adewale Adeyanju, threatened that the industrial action would not be suspended until all outstanding payments accumulated for over a year were fully liquidated along with the resolution of other workers’ welfare issues.

MWUN had on June 11, 2019, issued a 14-day ultimatum to the Federal Government to compel the International Oil Companies, IOCs, to pay all outstanding wages to Dockworkers, among other issues or face nationwide industrial unrest.

 The leaders of the Union had, last week, set up a strike coordinating committee and directed its officials in all port formations nationwide to begin a massive mobilization of members ahead of the planned strike.

Explaining why the Union had resorted to industrial action, Adeyanju contended that non-payment of government-appointed stevedores/dockworkers by the IOCs contravened Nigerian Maritime Administration and Safety Agency, NIMASA, Act 2007.

He lamented that several efforts made to get the IOCs to comply including the stakeholders’ meeting organised by the Nigerian Ports Authority, NPA, failed. 

 He stated: “Some of the affected dockworkers have passed on prematurely due to economic hardship, while those that are alive have been forced to live like destitute. As a responsible union, we cannot continue to hold our arm and watch our members die prematurely because of the nonchalant attitude of the IOCs toward the welfare of our members.

In view of the foregoing, we gave a 14-day ultimatum/notice to the Federal Government, through the Permanent Secretary, Ministry of Transportation to prevail on the IOCs to do the needful by paying our members. Ahead of the expiration of the ultimatum, which was Friday, June 28, 2019, we issued a reminder letter dated June 27, 2019.

\”The three days’ reminder elapsed and we are, therefore, directing that all ports operations nationwide should be shut and our members should begin an indefinite strike until all payments are made and other issues resolved. That is, if at the close of work today, (yesterday) no evidence of payment is seen, our members shall withdraw services in all the nation’s seaports until all issues in contention are resolved.”

Part of the complaints of the Union in the letter to the government says, “It is on record that on June 1, 2018, the NPA appointed stevedoring contractors to provide stevedoring services at various off-shore jetties and on-shore locations to the International Oil Services and other operators. It will be necessary to inform you that NPA had held several meetings with these operators to grant access to the government appointed stevedoring contractors, process their invoices and effect payment. Unfortunately, the operators have refused to comply with the NPA directive after one year that the stevedoring contractors were appointed.

 “We commend the managing director of Nigerian Ports Authority for the NPA management has made to compel the IOCs to engage the services of appointed stevedoring and registered dockworkers in their stevedores and registered dockworkers in their stevedoring operators.

In fact, at stakeholders meeting held on February 28, 2018, organised by the NPA at Victoria Island, Lagos, to sensitise stakeholders, i.e., IOCs, jetty owners and terminal owners, that the NPA appointed stevedores and registered dockworkers are empowered by law to solely handle discharged and loading operations at the ports, jetties and oil platforms.

“The position of the operators on NPA directive is worrisome and very surprising because the same operators had processed and paid the former stevedoring contractors since 2010 through a foremost terminal operator. So, why are they refusing to cooperate with the newly appointed stevedoring contractors since the modus operandi remains the same?

 “The Maritime Workers Union of Nigeria, MWUN, has been monitoring the chain of events on this matter since last one year, and noted that the implication of the operators defiant attitude amongst others is untimely death of some dockworkers while awaiting the payment of their wages, because they could not meet their family obligations like payment of house rent, children school fees and hospital bills, to mention but few. We can no longer continue to watch our members die prematurely because of the defiant attitude of the IOCs.

“Consequently, we are constrained to give the Ministry of Transportation that superintends the appointment of stevedores two weeks (14 days) to prevail on the management of the IOCs to pay all outstanding bills to our members, failing which we will be compelled to withdraw our services and shut down operations in all the Nations Sea Ports.”

Although the  NPA, yesterday claimed it was holding a meeting with the union leadership in the bid to avert the strike, President General of MWUN,   Adeyanju denied knowledge of such meeting.

The General Manager, Corporate Communications of NPA, Mr Adams Jatto, said the Authority had called the Union for dialogue earlier yesterday morning. He stated: “There was a meeting, the meeting is not over, but even if the Union decide to go ahead, NPAs operations will not be affected because the issue is with the IOC, and I believe the strike will only affect the upstream. This ultimatum has been hanging and those directly involved have failed to respond. It is not the Authority’s problem in the actual sense, we are only trying to mediate.”

 But Adeyanju denied any meeting, insisting that only evidence of payment of the outstanding wages would stop the strike, saying all four branches of the Union, comprising of Dockworkers, Seamen, Ship Chandelling and NPA would comply fully as they had been mobilised for an effective nationwide strike from today.

 In the reminder letter addressed to the Permanent Secretary of the Federal Ministry of Transportation, the Union lamented that there was no evidence that the issues raised were being addressed.

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