Feature

THE NIGERIAN ECONOMY: WHERE ARE WE NOW?

Published

3 years ago

February 4, 2022

By Matthew Eloyi

As Nigeria’s economic fortunes seem to be waning below expectations, it may not be out of place to question the country’s economic pathway.

For several years, the catchphrase of ‘economic diversification’ has been strolling about in Nigerian government’s lexicon but despite several reforms, restructuring programmes and international loans, millions of Nigerians still live in abject poverty plus an unabated monolithic dependency on oil. The recent coronavirus pandemic complicated by the growing debt profile of the country and falling Gross Domestic Product (GDP) give new urgency to this issue.

Since the discovery of Oil in 1956 at Oloibiri in the Niger Delta, Nigeria has not gotten it right in getting value for the product. Instead, the government has solely relied on selling the crude oil only to import refined petroleum products for domestic use amidst subsidy outrage and uncertainty as to the total number of litres being used for domestic purpose, among other concerns.

According to experts, Nigeria’s economic potential is hindered by many operational issues, including obstacles to investment, inadequate infrastructure, tariff and non-tariff barriers to trade, limited foreign exchange capacity, and lack of confidence in currency valuation. Many are also of the opinion that Nigeria’s economic growth is held back by insufficient electricity generation capacity, which results in a lack of a reliable and affordable power supply.

Economic experts and other stakeholders have also stressed the need for the government to create policies and implementation strategies to tackle the challenges posed by the coronavirus pandemic while providing an enabling environment for investments to thrive. According to them, these would enable Nigeria to quickly come out of recession and improve the standard of living for the citizens.

The current issues causing hyper-inflation

One of the ultimate goals of a modern economic system is to keep prices of goods and services stable at rates that would not be injurious to the economic system. This is one goal that Nigeria has been finding difficult to attain as prices of goods and services keep rising continuously, thereby encouraging hoarding of unspent income, increasing the cost of borrowing and constraining investment spending by businessmen.

It is no longer news that the Nigerian economic environment is currently experiencing inflationary episodes and this has raised questions on the credibility and efficacy of the country’s monetary policy. According to experts, inflation can emanate from several sources including the ability of labour unions to use market power to demand for wage increases in order to correct parts of the profits accruable to entrepreneurs. Inflation is also said to be caused by developments in the product markets because of the existence of monopolistic market structures. It also occurs as a result of some form of internal or external shocks that may be driven by either exchange rate depreciation or an upward surge or spike in the prices of commodities. According to reports and expert opinion, however, the upsurge of COVID-19 pandemic has been the major cause of inflation since 2020 till date.

Despite the obvious continuous increase in prices of goods and services, the National Bureau of Statistics reported that the annual inflation rate fell for the eighth straight month to 15.40% in November 2021, from 15.99% in October. Meanwhile, the yearly core inflation rate, excluding the prices of agricultural produce, rose to 13.85% in November, from 13.24% in the prior month.

COVID-19 and downward spiral of the economy

Since the entrance of coronavirus (COVID-19) into Nigeria on February 27, 2020, the Nigerian economy seemed to have witnessed a lot of commotion. Few days after the importation of the virus from Italy, specifically on March 11, it was declared a global pandemic by the World Health Organisation (WHO). As the virus continued to spread globally and became more alarming, governments at all levels seemed to focus mainly on curtailing the spread within the country by imposing social isolation policies, which include closure of schools and businesses, movement restriction, etc. The shutdown of work and businesses as a way of curtailing the virus seems to have worsened the plight of Nigerians, as many were and are still struggling to afford food and meet other basic needs. According to reports, the palliatives provided by state and federal governments reached only a fraction of the vulnerable.

Most of the major effects of the COVID-19 pandemic on Nigeria have been economic, rather than health related. The earlier phase of the pandemic led Nigeria to its worst recession since the 1980s, with services and industry hit especially hard. This relatively stemmed from lockdown policies constraining people’s ability to go to work. As if that is not enough, the price of oil – which is more than 80 percent of Nigeria’s exports and more than 50 percent of government revenues – dropped more than 60 percent between February and May 2020.

In the later phases of the pandemic, even though economic activities began to recuperate, inflation started stepping in, especially for food items that are vital for consumption. By impeding economic activities, COVID-19 has worsened pre-existing operational distortions that were already causing inflation, even before the pandemic hit.

Monolithic dependency on oil and the imperative for diversification

Africa’s most populous nation, Nigeria, is blessed with numerous natural resources spread across different geographical States in the country. Agriculture and Extractive Minerals were the country’s major source of revenues in the 1950s but this soon changed after the discovery of oil in 1959.

According to research, the origin of oil exploration and exploitation in Nigeria started in 1959, at Oloibiri in present day Bayelsa State where the first oil well was discovered and the subsequent increase in demand of oil in the world market made the country to neglect agriculture, extractive minerals and other viable sectors of the economy, leading to over-reliance on crude oil. Today, oil and its associated products account for about 90% of Nigeria’s export revenue, and funds over 80% of the national budget.

With the ever-growing uncertainty of global crude oil prices and sluggish growth of the Nation’s economy, much opportunity to move away from underdevelopment despite its well established and abundant natural and human resources endowments has been lost due to varying reasons. Consequently, federal government inflow has been on a steady decline resulting from declining global oil prices, expanding population, slower economic activity, and hence leading to lower corporate taxes, declining consumption, lower value added taxes, exchange rates adjustments, lower trade related tariff revenues, as well as reduced portfolio and foreign direct investment accretion.

Diversification of the Nigerian economy remains the only way out of its present economic predicament and the best viable strategic option for the country in light of her many developmental challenges. The need for diversification is nothing new, as there has been a sustained push for several years to further grow and diversify the country’s economy, with the aim of improving the revenue base towards unlocking sustainable development.

Nigeria as a country must develop new ways to grow its economy by encouraging more investment and drawing attention to the non-traditional oil base to the Agricultural and Solid Mineral sectors, increasing its range of products for the international market and engaging new economic and trade Partners distinction to oil. As a matter of urgency, the Federal Government of Nigeria must encourage the diversification of its economy, as it is the only alternative and sustainable means to survive the international economic vagaries with the persistent volatility of global crude oil price with its attendant drop in net oil price over time. It is important that the nation must not accept erroneously the myth that oil provides a never-ending source of revenue as usual.

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Feature

Hon. Olushola Olofin: A Visionary Leader for the Nigerian Social Insurance Trust Fund (NSITF)

Published

3 weeks ago

January 24, 2025

Matthew Eloyi

By Zachariah C.H

The appointment of Hon. Olushola Olofin as the new Board Chairman of the Nigerian Social Insurance Trust Fund (NSITF) by President Bola Ahmed Tinubu on January 24, 2025, marks a new dawn for the organization. Hon. Olofin is a seasoned professional with an impeccable track record in Information and Communication Technology (ICT) and management, boasting over 20 years of experience both within Nigeria and internationally. His unique blend of expertise, visionary leadership, and unwavering commitment to excellence positions him as the ideal leader to steer NSITF toward greater heights.

Hon. Olofin has been a driving force behind Nigeria’s digital transformation. As an ICT and management expert, he has consistently demonstrated the ability to harness cutting-edge technology to address complex challenges, fostering innovation and efficiency in every organization he has led. As a Fellow of the Chartered Institute of Management Consultants, his strategic insights have revolutionized operations across sectors, leaving a legacy of progress and sustainability

Hon. Olofin’s extensive leadership experience spans multiple industries. He has served as Board Chairman, Managing Director, and Executive Director of prominent organizations, including Aquasilica Limited and Enrich Systems Limited. Currently, he serves as the Managing Director/CEO of SatCom Integrated Resources, a globally acclaimed ICT company, where his innovative leadership has propelled the company to new heights in the global marketplace. His ability to build, manage, and transform organizations makes him uniquely suited to lead the NSITF into a new era of accountability, transparency, and service delivery.

Hon. Olofin’s academic and professional credentials underscore his capability to excel in this pivotal role. He holds a Bachelor’s degree in Business Administration from the University of Abuja and a Master’s degree in Management Information Systems from the University of Espoo, Finland. Additionally, he has earned numerous professional certifications from world-renowned institutions, including:

•London Graduate School: Business Management

•AIRBUS SLC: Core Skilled Engineer and Programmer

•Certified SALTO Engineer: Spain

•Microsoft Certified Solutions Expert (MCSE)

These certifications reflect his commitment to continuous learning and staying ahead of global trends in technology and management.

Hon. Olushola Olofin’s appointment comes at a critical time for the NSITF, an organization tasked with providing social insurance to Nigeria’s workforce. His extensive expertise in ICT and management will undoubtedly drive the modernization of the NSITF’s operations, ensuring efficient service delivery and increased accessibility. His leadership will foster innovation, strengthen transparency, and enhance the Fund’s impact on Nigerian workers and employers alike.

As a forward-thinking leader with a proven track record of excellence, Hon. Olofin is poised to transform the NSITF into a world-class institution, setting new benchmarks for social security administration in Nigeria. With his wealth of experience, strategic acumen, and passion for service, the NSITF is on the cusp of a brighter, more impactful future.

The Nigerian workforce can look forward to enhanced trust, efficiency, and innovation under the capable leadership of Hon. Olushola Olofin.

Africa

Customs hands over illicit drugs worth N117.59m to NDLEA

Published

3 months ago

November 22, 2024

Matthew Eloyi

Customs hands over illicit drugs worth N117.59m to NDLEA

The Nigeria Customs Service (NCS), Ogun Area 1 Command, has handed over illicit drugs worth N117.59 million to the National Drug Law Enforcement Agency (NDLEA).

The Comptroller of the command, Mr James Ojo, disclosed this during the handing over of the drugs to Mr Olusegun Adeyeye, the Commander of NDLEA, Idiroko Special Area Command, in Abeokuta, Ogun, on Friday.

Ojo said the customs handed over the seized cannabis and tramadol tablets to the Idiroko Special Command for further investigation in line with the standard operating procedures and inter-agency collaboration.

He said the illicit drugs were seized in various strategic locations between January and November 21, 2024, in Ogun State.

He added that the illicit drugs were abandoned at various locations, including the Abeokuta axis, the Agbawo/Igankoto area of Yewa North Local Government Area, and Imeko Afton axis.

Ojo said that the seizure of the cannabis sativa and tramaling tablets, another brand of tramadol, was made possible through credible intelligence and strategic operations of the customs personnel.

“The successful interception of these dangerous substances would not have been possible without the robust collaboration and support from our intelligence units, local informants and sister agencies.

“These landmark operations are testament to the unwavering dedication of the NCS to safeguard the health and well-being of our citizens and uphold the rule of law,” he said.

He said the seizures comprised 403 sacks and 6,504 parcels, weighing 7,217.7 kg and 362 packs of tramaling tablets of 225mg each, with a total Duty Paid Value of N117,587,405,00.

He described the height of illicit drugs smuggling in the recent time as worrisome.

This, he said, underscores the severity of drug trafficking within the borders.

“Between Oct. 13 and Nov. 12 alone, operatives intercepted a total of 1,373 parcels of cannabis sativa, weighing 1,337kg and 362 packs of tramaling tablets of 225mg each,” he said.

Ojo said the seizures had disrupted the supply chain of illicit drugs, thereby mitigating the risks those substances posed to the youth, families and communities.

He lauded the synergy between its command, security agencies and other stakeholders that led to the remarkable achievements.

Ojo also commended the Comptroller General of NCS for creating an enabling environment for the command to achieve the success.

Responding, Adeyeye, applauded the customs for achieving the feat.

Adeyeye pledged to continue to collaborate with the customs to fight against illicit trade and drug trafficking in the state.

Africa

Ann-Kio Briggs Faults Tinubu for Scrapping Niger Delta Ministry

Published

3 months ago

November 22, 2024

Matthew Eloyi

Prominent Niger Delta human rights activist and environmentalist, Ann-Kio Briggs, has criticised President Bola Tinubu’s decision to scrap the Ministry of Niger Delta, describing it as ill-advised and detrimental to the oil-rich region.

Briggs expressed her concerns during an appearance on Inside Sources with Laolu Akande, a socio-political programme aired on Channels Television.

“The Ministry of Niger Delta was created by the late (President Umaru) Yar’Adua. There was a reason for the creation. So, just removing it because the president was advised. I want to believe that he was advised because if he did it by himself, that would be terribly wrong,” she stated.

President Tinubu, in October, dissolved the Ministry of Niger Delta and replaced it with the Ministry of Regional Development, which is tasked with overseeing all regional development commissions, including the Niger Delta Development Commission (NDDC), North-West Development Commission, and North-East Development Commission.

Briggs questioned the rationale behind the restructuring, expressing concerns about its feasibility and implications. “But that’s not going to be the solution because who is going to fund the commissions? Is it the regions because it is called the Regional Development Ministry? Is it the states in the regions? What are the regions because we don’t work with regions right now; we are working with geopolitical zones,” she remarked.

She added, “Are we going back to regionalism? If we are, we have to discuss it. The president can’t decide on his own to restructure Nigeria. If we are restructuring Nigeria, the president alone can’t restructure Nigeria, he has to take my opinion and your opinion into consideration.”

Briggs also decried the longstanding neglect of the Niger Delta despite its significant contributions to Nigeria’s economy since 1958. “The Niger Delta has been developing Nigeria since 1958. We want to use our resources to develop our region; let regions use their resources to develop themselves,” she asserted.

Reflecting on the various bodies established to address the region’s development, Briggs lamented their failure to deliver meaningful progress. She highlighted the Niger Delta Basin Authority, the Oil Mineral Producing Areas Development Commission (OMPADEC), and the NDDC as examples of ineffective interventions.

“NDDC was created by Olusegun Obasanjo…There was OMPADEC before NDDC. OMPADEC was an agency. Before OMPADEC, there was the Basin Authority…These authorities were created to help us. Were we helped by those authorities? No, we were not,” she said.

Briggs further described the NDDC as an “ATM for failed politicians, disgruntled politicians, and politicians that have had their electoral wins taken away from them and given to somebody else.”

Her remarks underscore the deep-seated frustrations in the Niger Delta, where residents continue to advocate for greater control over their resources and improved governance.