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Coronanomics: Nigeria Needs Economic Pragmatism and Robust Institutions – Dr. Temitope Oshikoya

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Temitope Oshikoya

Nigeria needs to achieve economic pragmatism with the support robust institutions to achieve economic stability amidst the COVID-19 pandemic that has recorded over 230 cases in the country.

Dr. Temitope Oshikoya an economist and CEO of Nextnomics Advisory disclosed this on the WebTV Coronanomics Watch program.

He described the recent N500bn intervention plan of the Federal Government as a good step; a critical one at a time of a viral pandemic, even as Nigeria has also engaged Multilateral Development Banks (MDBs) like the World Bank, International Monetary Fund and the Islamic Development Bank amongst other.

According to him it was important to strengthen Nigeria’s healthcare infrastructure and delivery systems, because good health leads to economic wealth.

Oshikoya emphasized the need for effective governance measures through institutions and pragmatism from policy makers, to navigate the challenges arising from the coronavirus disease.

According to him sustainable economic development depends on productivity and productivity depends on incentives, robust institutions and innovation.

Speaking further, he said that Nigeria needs ‘Economic Pluralism’ which will adopt a combination of financial market roles and efficiency of government institutions.

On the fiscal support from the Federal Government for states, the economist said, “We need an efficient information system to monitor distribution and disbursement which means we need an efficientdatabase”.

“We need to work with the NBS, ICT digital economy information ministry in order to build our infrastructural data base and reach out to the poor and most vulnerable. We need stabilizers from social security arrangements, the insurance sector, and pension administration which the USA is building upon. The local government apparatus is equally very important”.

Taking on the issues further in the area of state intervention, he stressed that the issue of decentralization from each state was important, and equipping the healthcare sector should start from the local government  level.

He noted that, “the local government apparatus is very important and strengthens the state’s capacity to handle healthcare, insurance  and educational matters competently and efficiently. The focus should be at the local government not federal level”.

He cited Germany as an example of a country that is effectively driving the state decentralization process through strategic interventions at the Federal, State and Local Government levels which is evident in the reduced cases of COVID-19.

The economist acknowledged Nigeria’s high debt and low revenue base with a low tax base characterized by tax revenues constituting only 7% of GDP, compared to Africa’s average of 15%  and a tax to GDP ratio of 25% in OECD countries.

“In the short term, we need to support the government in the fiscal space but over the long term we need to build public institutions to enable the government to widen the base for tax revenue”, he said.

In terms of key areas for the Nigerian government to  focus on Oshikoya highlighted the following areas:

We need to manage our debt very carefully over the medium term

.we need to mobilise more revenue by improving efficiency in the collection of taxes and reduce corruption

.In  terms of public expenditure, we need to focus on more things that government would imply a greater impact of fiscal spending per capita and improved growth of the productive real sector of the economy

(TEMITOPE WAHEED OSHIKOYA is an Assistant Professor of Economics at the University of New Brunswick, Canada, and a former Economics Consultant to the World Bank)

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Economy

Dead! Barkindo, OPEC Sec-Gen, Hours After Meeting President Buhari

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Mohammad Sanusi Barkindo, secretary-general of the Organisation of Petroleum Exporting Countries (OPEC), is dead.

Mele Kyari, group managing director of the Nigerian National Petroleum Company (NNPC) Limited, announced his demise in a tweet in the early hours of Wednesday.

Kyari said he died at about 11p.m on Tuesday few hours after delivering a speech to oil and gas stakeholders at the ongoing 2022 Nigerian oil and gas conference and exhibition in Abuja.

After the event, he met with President Muhammadu Buhari at the statehouse alongside a delegation from the OPEC secretariat.

He was aged 63.

He described his departure as a great loss to his immediate family, NNPC Nigeria, OPEC and the global energy community.

“We lost our esteemed Dr Muhammad Sanusi Barkindo. He died at about 11 pm yesterday 5th July 2022. Certainly a great loss to his immediate family, the NNPC, our country Nigeria, the OPEC and the global energy community,” Kyari tweeted.

“Burial arrangements will be announced shortly.”

Barkindo is the third ex-NNPC GMD to have passed on in two years — Maikanti Baru died in May 2020 and Joseph Dawha in August 2020.

His second term at OPEC ends on July 31, 2022.

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Economy

Emefiele Not Sacked – CBN Spokesman

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Contrary to viral reports to the effect that the federal government has sacked the governor of the Central Bank of Nigeria, Godwin Emefiele,  Head of corporate communications of the Bank, Osita Nwanisiobi has said that rumours of a purported sack are not true.

Osita denied the rumours in a phone conversation with Nairametrics stating that “he is not aware of any sack of the CBN Governor”. Nairametrics also understands the CBN Governor is in Davos on official assignment.

Several online media blogs have published reports of a purported sack of the Governor of the Central Bank of Africa’s largest economy with some mentioning that “it was unconfirmed” even though they went ahead to publish.

Nairametrics also contacted other sources close to the presidency and the CBN Governor to confirm if the rumours are true. All our sources claim no knowledge of a purported sack.

Meanwhile,the CBN Governor has been under pressure since he declared interest in running for president of the Federal Republic of Nigeria.

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NPA : Panel Clears Hadiza Bala Usman of Fraud

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Hadiza Bala Usman, the former managing director of the Nigerian Ports Authority (NPA), has been cleared of allegations of failing to remit N165 billion operating surplus to the coffers of the federal government, according to a report by TheCable.

However, the 11-member committee set up by the ministry of transportation to probe the alleged fraud decided to shift its attention to allegations of insubordination to Rotimi Amaechi, the minister.

She was accused of ignoring ministerial directives and communicating directly with President Muhammadu Buhari.

Usman was originally suspended in May 2021 by the minister over an allegedly missing N165 billion but the committee did not find any evidence in its account reconciliation.

TheCable understands that when Amaechi presented the report to Buhari and asked for permission to remove Usman based on to “insubordination”, the president refused to give approval but instead directed the minister to issue a query to the former NPA MD.

Amaechi, presidency sources told TheCable, said Usman had already defended herself before the committee, but Buhari insisted that she be allowed to respond to the report before any further action is taken.

“A visibly disappointed Amaechi then directed Magdalene Ajani, the permanent secretary, to issue the query,” the source said, adding that Buhari refused to be presented with a “fait accompli”.

Conspicuously missing in the 10 items of query is the original reason for her suspension — the allegation that N165 billion was not remitted to the treasure single account (TSA) which made the headlines.

QUERY AND REPLY

An official of the ministry of transportation, who spoke to TheCable but pleaded to be “shielded” for fear of victimisation, said Usman responded to the query within one week as stipulated.

“She said that she did not have access to some important documents because she was on suspension but I would say she did justice to the query,” the official said.

Mohammed Bello-Koko, who acted as NPA MD during her suspension, was a bank’s accounts officer to the Rivers states government when Amaechi was governor.

Bello-Koko was on Tuesday officially appointed the MD.

In the query dated January 26, 2022, Ajani said the committee accused Usman of the following acts of insubordination.

  • Disregard for ministerial directive in respect of the Bonny/Port Harcourt and Lagos port channel management contract
  • Unlawful procurement of the operation of truck transit park for port bound trucks (e-callup) with the non-payment into TSA
  • Unilateral execution of a supplemental agreement in respect of the Lekki Deep Seaport concession project
  • Breach of the channels of the communication in the public service
  • Unilateral and improper use of the emergency procurement mode to procure vehicles
  • Waiver, rebates and tariffs granted by NPA without requisite approval
  • disobedience of court order in respect of pilotage contract between NPA and Intels
  • Disregard of court order in the matter between NPA and BUA ports and terminal limited in respect of the concession of Terminal B Rivers ports complex.
  • Breach of presidential/ministerial directive in the matter of the LADOL/Samsung dispute
  • Lease of Koko Port to Messers Creek Shore Jetty and Terminal Ltd

In her response, she denied all the allegations.

On the renewal of the Bonny/Port Harcourt and Lagos port channel management contract for which she was said to have disregarded ministerial directive, she said she conveyed the directive to the Bureau for Public Procurement (BPP) which it clarified that it was an extension of an existing contract and such extensions do not require the attention of either the ministerial tenders board or the federal executive council.

Usman said, with regards to the operations of the e-callup system, that “it is practically impossible to have the e-Wallet account domiciled with the TSA as the amount standing to the credit of the transporters’ wallets still belong to the customers. In addition, the owners of the satellite parks and pre-gates used for gating trucks before their callup into the ports need to be paid weekly from the wallet account based on how many bookings were made for their parks”.

She denied unilaterally executing a supplemental agreement in respect of the Lekki Deep Seaport concession project, stating that it was operational in nature and does not alter any major aspect of the concession agreement “as it only rescheduled construction timeframe for a berth and allowed other players to partake in the development of dry bulk since the company was constrained to embark on the construction”.

The former NPA MD said presidency communicated directly with her seeking information and clarifications on the activities of the authority and she responded and she was not at any informed that her responses should have gone through the ministry since presidency did not communicate with her through the ministry.

Usman denied “unilateral and improper use of the emergency procurement” to procure vehicles to replace the ones burnt by the End SARS rioters, quoting public procurement laws to back her decision and pointing out that NPA got a provisional “no objection” certificate for the purchases.

She insisted that she did not disobey court orders on Intels and BUA, and that no presidential or ministerial directive was breached in the LADOL/Samsung dispute.

On the lease of Koko Port to Messrs Creek Shore Jetty and Terminal Ltd, she said she acted the legal limits of NPA as provided by the enabling laws.

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