Nigerian Refineries Need a Commonsense Solution

The four state-owned refineries in Nigeria are on their knees. Though refineries in Nigeria should be consistently out-performing the average utilization rates of refineries across the globe, their performance is characterised by very low utilization and incessant downtime. This owes to the fact that they are owned and run by the government of Nigeria and, are caught within the ‘crossfire’ of corruption, persistent attacks on pipelines by oil thieves as well as the slow progress in the full-liberalization of the refining sector of the petroleum industry.

Recently, the Nigerian National Petroleum Corporation (NNPC) announced that it had commenced discussions with the original builders to carry out a major overhaul of the refineries. NNPC said, Chiyoda would be contracted to handle the rehabilitation of the 110,000 barrel per day Kaduna refinery, Italian firm Saipem would handled the repairs of the 125,000 bpd Warri Refinery, while Japan’s JGC Group, which built the 150,000 bpd New Port Harcourt refinery in 1988, had nominated Tecnimont to take charge of repairs of one of the two refineries in Port Harcourt.

The resolve of the government to heed the age-old suggestion of inviting the original builders to handle the Turn Around Maintenance (TAM) of the refineries is a very good and a well-thought out decision. The hope is, the refineries would witness a genuine Turn Around Maintenance (TAM), and not the usual ones they have been witnessing which has not brought any improvement on their ‘health’. The general consensus among experts in the oil and gas industry is that the fastest and cheapest way to get more volumes of refined petroleum products into the growing Nigerian market at lower cost is to rehabilitate these existing refineries. However, the big question is, after rehabilitating the refineries, what’s next?

In addition to the proposed Turn Around Maintenance by the original builders, which should also include optimization of the refineries to achieve a high Nelson Complexity Index - any refinery with a Nelson Complexity Index of 10 or above is considered a complex refinery with potential in value addition and high value products. When that is achieved, a 4-way approach is also needed to position the refineries and tackle the continuing difficulty of establishing private refineries in Nigeria. Before the completion of the Turn Around Maintenance, with the hope it would be sincerely done as promised, government should consider these four well-known commonsense approaches: grant full autonomy to the refineries, but they still remain government-owned; lease the refineries to oil companies/inventors/communities/etc; outright privatization of the refineries with highly attractive incentives, which should be extended to genuine investors willing to establish private refineries.

Being the oldest, Warri Refining & Petrochemical Company Limited can be retained by the government, but should be granted full autonomy to cater for itself- pay its bills and dividend to the government. Kaduna Refining & Petrochemical Company can be leased to any oil company or group of investors with interest in the petroleum products refining. The Port Harcourt Refining Company Limited should be fully privatized. The old complex should be sold to oil producing communities, while the new complex to interested buyers with technical and financial capacity.

This 4-way approach will take care of all the interests and schools of thought on how to revive Nigeria’s state-owned refineries. Nigerians would know which method best suites the running of the refineries. In addition, it will trigger investors’ interests in the refining sector of the Nigeria oil and gas industry.

However, implementation has to be systematic as well as systemic. i. e. experts from various disciplines should sit-down to develop win-win modalities for the approach to be acceptable to all stakeholders, especially ordinary Nigerians.


With the right approach, coupled with the available cheap and easily accessible crude oil; competent manpower and funds, Nigeria’s refineries would operate at near 100 per cent utilization with minimal downtime. Moreover, a speedy and sustainable increase in Nigeria’s refining capacity that achieves Gross Refining Margins (GRMs) that are consistently at par with Asian benchmark of ‘Singapore Complex Margins’ will generate thousands of jobs and boost the potential of the economy. This way, Nigerian refineries can compete with any refinery in the world including the world biggest refinery with Nelson Complexity Index of nearly 14 - the 1.3 million barrels per day (bpd) Jamnagar Refinery in India.


Zayyad I. Muhammad writes from Jimeta, Adamawa State, zaymohd@yahoo.com, 08036070980.

Time For North To Get More Revenue

Gov. Babangida Aliyu, Chairman Northern Governors Forum

At present, all the 19 northern states cannot effectively function without the monthly allocation from the Federation Account. But can the 19 northern states ever survive without the monthly allocations from the Federation Account? - Certainly yes; if the region can wake-up from its slumber.   

The thirst of northern Governors for more revenue from the Federation Account stems from the age-long scramble for easy oil money by the Nigerian political class. It is also an indication of the poverty of ideas on how to free the region from the ‘slavery’ of   increasing reliance on the Federation Account as well as poor creativity in new ways of generating revenue apart from oil. In addition, northern leaders are not enthusiastic about utilizing the vast agricultural land and the human capital of the region.

 

Nonetheless, it is hightime northern states initiated new ways of generating more revenue. The new ways have to take cognizance of agriculture and human resources.

In a world where land has become a scarce resource- Northern Nigeria encompasses about 75% of Nigeria’s 993,773km2 of land area, with climatic conditions favourable for agriculture. The region has more than 400,000km2 of large array of flora and fauna, naturally fertile and arable land, water bodies and large number of populace with potentials to be agricultural entrepreneurs. Why, then does agriculture suffer setback in the region? Many factors can be said to be responsible for this, few among them are: indolence created by heavy reliance on the easy oil money; neglect and lax assessment of the place of agriculture in regional development; poor implementation of agricultural programmes and schemes; non involvement of rural dwellers, youths and real farmers in the agricultural programmes. And   lack of well-defined roles between governments at all levels. 

The North, being blessed with favourable climate for agriculture needs to redefine the implementation strategies of its agricultural programmes and policies in such a way that youths and rural famers will be the central focus.   

This writer once advocated a  ‘youth/rural farmers-centered’  agricultural programme  that  will employ an all inclusive technique where youths, local communities, local councils, states, and the private sector (financial institutions and private investors) will be active and major participants. Financial institutions and private investors will act as financiers; governments at all levels will have well-defined roles, while the youths and rural farmers will be the main targets. In addition, the programme will be designed to be four-pronged- ‘export oriented’, ‘large’, ‘medium’ and ‘small’ scales. How will it be implemented? 

Northern states collectively (through any of their regional agencies) act as guarantor of fund to be provided by financial institutions or private investors. This will be done through the issuance of either callable, par value or coupon rate bonds. The scheme will involve local councils and state governments providing lands and other logistics. The private investors or financial institutions who participate in the scheme are not to give money directly to the governments in order to receive the bond-certificates. Rather, it would a kind of batter arrangement; the investor (either financial institution or private individuals) will set up farms and put in place all structures required in  modern farms. After which a bond certificate equivalent to the cost which would have been consented to by both parties will be issued to them. This will help reduce financial irresponsibility- the main reason for the failure of most good programmes in Nigeria, as far as the scheme is concerned.

As a way of encouraging investors to participate in the scheme, the investor would take a prescribed stake, between 5% and 10% in any of the farm they setup before the maturity of the bond. This is an added value to investors since, in addition to the interest they will get from their bond when it is redeemed, they will have shares in the farm’s profit. However, after the maturity of the bond, their stake in the farm will be transferred to the host communities.

Despite the seeming complexity of such a scheme; if experts in various fields are engaged in designing its workability, it can be experimented as a tool for the implementation of numerous government programmes. It will accelerate agriculture as a source of growth for regional and national economy; improve its capacity as a provider of investment opportunities for the private sector; and a prime driver of agriculture-related industries.

There is a huge hole on the health of the education sector in northern Nigeria. Hence, a need for a shift in the way the sector is run in the north. This shift will put in place a system that provides adequate funding, help in improving standard and   quality of both teachers and students, a system that completely aids in shifting away from the status quo where- government is the provider, administer, monitor and assessor of how funds are utilized. 
 

This writer is a strong advocate of greater participation of the private sector in managing of public schools. However, not a ‘bulldozer’ kind of participation, where government will entirely surrender these schools to private entrepreneurs.  States in the north can introduce a ‘measured’ public-private partnership in the education sector. Where government builds new schools, equips old ones,  then take a benchmark from a well-run private school on what it costs per student head in running a school;  then a gradual entrusting of public schools to private sector, where government provides the funds, taking into cognizance  cost per student; as it is in private schools, while the private sector manages it especially in the area of infrastructure maintenance, provision of teaching tools, management of training programmes for teachers etc. 

Ideas development is also an excellent way to create employment for skilled manpower in the north, and the region can use it to generate more revenue i.e. using the well known concept of: Innovate-Create-Invent-Invest. Experts have maintained that it is the most difficult but the most effective way of creating long-term employment and wealth. Despite the seemingly low literacy level in the north, the region churns out thousands of graduates yearly. States in the north should establish innovation and invention centres across the region and in tertiary institutions. The centres should work in such a way that, graduates with technical skills and entrepreneurship passion, will have access to facilities and environment that support thinking for invention and innovation. There are many government and non-governmental agencies that can play vital roles in such a scheme. Moreover, private investors can also be major participants, as they can be fund providers for any invention or innovation with great market potentials. With this kind of scheme, it is possible to see new industries surface; the economy gradually grows and lots of good paying jobs are created.

Northern Governors should utilize the region’s agricultural potentials and human capital to generate more revenues and wealth for the region, instead of the crave for more easy oil money- which seems to be grease that runs corruption, poor creativity in revenue generation and low national productivity in Nigeria.

Zayyad I. Muhammad writes from Jimeta, Adamawa State, zaymohd@yahoo.com, 08036070980.

Thinking of a Nigeria without oil

Easy oil wealth is the grease that runs corruption and low national productivity in Nigeria . Any rise in the price of crude oil in the international market or removal of fuel subsidy will bring more monies to all the three tiers of government in Nigeria , thus, more corruption and increased poor creativity in the revenue-generation at federal, states and local government levels? 

 

Easy oil money has confused and turned Nigerian leaders into wasteful spenders; it has turned men that society trust into men with low political and moral values, it has also helped in the distortion of Nigeria ’s federal system.  Could have Nigeria been better-off without easy oil money?  Or is it a “curse” that Nigeria and Nigerians have to live with, and life goes on? Pessimists are of the view that Nigeria has already missed the opportunities to utilized oil monies  for national development- they argue that, Nigeria’s leaders, without any remorse has been eating up the  ‘future’ of the next generations. However, optimists are of the view that, the country still has chances to amend the mistakes of the past and take a cue from other nations.

 

Here is the big question- which of the two is the biggest challenge for Nigeria ? – is it the country’s heavy dependence on crude oil as the major  source of revenue; or the massive corruption in the country  triggered by the availability of easy petro-dollars, including the shady management of the now  controversial fuel subsidy regime?

 

There is no doubt that corruption is the monster subjecting most Nigerians to life full of pains. However, Nigeria’s sole dependence on oil as its major source of revenue and the only business that makes billionaires overnight is of greater harm- because it has promoted lack of creativity in revenue generation at all the levels of government; it is killing human capital development efforts and promoting laziness in the Nigerian society, in addition to making Nigeria’s political leadership indifferent to the plight of Nigerians either intentional or unintentional. 

 

It is indeed true that corruption facilitated by easy oil money has polluted the minds of  many Nigerians to the extent that the quest to hold political position or be close to the corridors of power is mainly use as an avenue to get rich. However, Nigeria ’s sole dependence on oil has promoted poverty of new ideas on governance and makes Nigeria vulnerable to any slight change in other country’s economy. 

 

The assertions that oil money has promoted corruption and lack of creativity in developing other avenues for revenue generation is not new, it is indeed yesterday’s news. But the current challenge is, when will  Government at all levels start to see oil money as a mere temporary ‘stipend’ that would one day disappears. For instance, the much hullabaloo by the Federal government and the Governor’s forum on the removal of fuel subsidy as the only avenue for government to get more revenue is clearly an end result of the continuing lack of feasible initiatives and creativity by government at all levels to create new ways of getting revenue apart from that of oil’s. 

 

Time has indeed come for Nigeria to invent new ways to get more revenue from other sources. The new ways has to be original and one which will well suit the peculiarity of the Nigerian state and its people. Though, it may contain some little elements of successful initiatives of other nations. One of the greatest mistakes policy makers in Nigeria do is- they often forget that any policy or programme that will drain the pockets of the populace; will face strong public resentment nonetheless the amount of revenue it would generate for government. That is why the removal of the fuel subsidy triggered nationwide public protests.  So, Nigeria ’s revenues generation drives (either subsidy removal or any other) must be synchronize with believable models that will create an enabling environment and uplift citizens’ living standard as well as provide ways to assist them turn their dreams into reality.

 

Nigeria’s leaders, policy formulators and implementers should develop a new revenue generation model, whereby the country  should  systemically and systematically reduce cost of governance, reinvigorate  her agricultural sector, promote small scale industrialisation;  develop human capital and efficient taxation, duties/tariffs, licenses and fees collection system.That is, putting in place a process through which the country’s economy can be transformed, and placing the country in a position that her citizens can take advantage of the vast opportunities today’s world economy offers.

 

It is good that President Goodluck Jonathan has started the process of cutting government’s recurrent expenditure. It must be transparent and seen to be implemented by all officials of governments from federal, states and local government levels.

 

Nigeria should redefine the implementation strategies of her agricultural programmes and policies. The development of the agriculture sector is imperative for Nigeria to remain economically viable. The new agricultural approach should not deviate from government’s current agricultural goals of alleviating poverty and hunger, promoting sustainable agricultural development, improved nutrition and food security, but the programme should also imbibe an all inclusive participatory techniques- where youth, communities, local councils, states, the federal government and the private sector (financial institute and private inventors) will be active and major participants. Financial institution and private investors shall be the financiers; governments at all levels will have well-defined roles, while the youths and communities shall be the targets. In addition, the programme should be designed to be in four categories- ‘export oriented’, ‘large’, ‘medium’ and ‘small’ scales.

 

Small scale industrialisation is another way government can generate revenues as well as increase the purchasing power of the poor. Though Industrialisation entailed both technology and profound social development, Nigeria can develop a small scale industrialisation programme which will steer resources into the productive process. Nigeria can tie her small scale industrialisation to agricultural output in the country. Nigeria has a total area of 910,768 km² of arable land, 13,000 km² water; and twenty-one (21) agricultural institutions, in addition to generation millions of tons of recyclable wastes every day. This will help in sustaining and developing the agricultural sector, boost export of finished or semi-finished goods as well as reduce unnecessary importation of items like razor blades, pine needles, envelopes, keys and padlocks, cotton buds, toys, shoelaces, safety matches umbrellas, doormats, office square clips, treasury tags, table flags,  carpets etc . Most of these items are produced from agricultural outputs and recyclables wastes by small industries setup with small amount of capital and powered by solar panels or small wind turbines. Most of these industries are owned and run by a family of two or three in Shanghai , Taipei , Manila or Bombay . If properly modelled, small scale industrialisation can bring more revenue to government and lift thousands of people from the bottom ladder of poverty. For example, The Bank of Industry, the Central bank of Nigeria , NAPEP and the ministry of Trade and Investment should ensure that Nigerian small-scale industries and interested individuals have easy access to intervention funds and soft loans.

Human capital development has played a vital role that has led to significant socio-economic progress and improvement in the lives of large number of people in many countries, noteworthy is the rapid and long sustainable high growth performances of East Asian economies. Nigeria can utilise her human capital for economic development. Though, economists are of the view that, for human capital to spawn a perceptible impact on economic development, a nation needs to have a minimum of at least 70 per cent literate population. Though Nigeria ’s literacy level is low, but Nigerians are a very creative and dynamic people. Despite the absence of strong formal support, Nigerians have made sport, music, art, Information technology and the film industries promising. Nigerian government can take advantage of this and use these industries to create jobs and generate wealth, by hunting for top quality talented Nigerians, provide them with world–class training.  In addition to assisting private entrepreneurs to establish well-equipped record companies, modern film studios, sport development enterprises and remove every obstacle that hampers the flourishing of these industries.   

 

Nigeria’s government and Nigerians place more emphasis on oil as the major source of revenue and the only lifeline of the nation- this has led to poverty of ideas in revenues generation, laziness, corruption and widening inequality in the society. Easy oil money has taken over the once creative, industrious, upright, competitive and gallant Nigerian society.  Let’s start thinking of a Nigeria without oil.

Zayyad I. Muhammad writes from Jimeta, Adamawa State, zaymohd@yahoo.com, 08036070980.

Re: Where Are The Jobs?

In his Friday column in the Thisday newspaper of Friday 9th September 2011, Malam Nasir El-Rufai, drawn the attention of Nigerians to an issue that is very important for the success of President Goodluck Jonathan’s transformation agenda.

What strongly grabbed the attention of this writer was the proposal made by El-Rufai that “there is an urgent need to reform the various agencies involved in creating employment and alleviating poverty”. How can Nigeria tackle the high rate of unemployment in the country? - by creation of productive employment for its millions of unemployed citizens and those engaged in unproductive-manual jobs.

Nigeria needs to redesign her jobs and wealth creation programmes for better results. This will go a long way in increasing national output that will speed up and sustain economic growth, as well as, encourage the youth, private sector and the rural poor to be strong participants in the economy. Futhermore, there is need for the elimination of what experts call ‘disguised unemployment’- which prevails especially in the Nigerian agricultural sector.

The Federal Government on Tuesday 12th April, 2011 organised a presidential summit of job creation, which agenda includes, small and growing business, entrepreneurship, vocational education and job centres; graduate employment and business process outsourcing, public work and local content development and innovation. There is need for these to be implemented in such a way that they encourage the youth, rural dwellers and the poor to participate in and benefit from the process, while also complementing them with lower taxes, reduction of interest rates as well as incentives to businesses.

One of the most important strategies to tackle unemployment is an agricultural entrepreneurship programme for youth. It is good news that the Federal Government is already looking at that direction. The Government should go into partnership with private sector to establish poultry, fisheries, dairy, snellnaries farms, plantations etc in various locations in the country. The pilot phase should start with youth corpers. They should be trained-on-the-job on how to manage farms. After passing-out from the NYSC scheme, the farms should be transferred to them for management as entrepreneurs. The scheme should work in such a way that local councils and state governments should provide lands and other logistics, the private sector provides the fund while the federal government stands as the guarantor of fund. This will be done through the issuance of either callable, par value or coupon rate bonds. The private investors or financial institutions who will participate in the scheme are not to give money directly to the governments in order to receive the bond-certificate, but it would be a kind of batter arrangement; where the investors- either financial institution or private individuals would setup farms, in addition to putting in place all structures required in a standard farms. After which a bond certificate equivalent to the cost, which is to be determine by both parties and experts will be issued to them. The youths, to whom the farms are to be transferred, should gradually refund the monies back to the government; so as to make the scheme a revolving one, as well as to eliminate any form of mismanagement or corruption.

Ideas Development is also an excellent way to create employment for Nigerians i.e. the well known concept of: Innovate, create, invent and invest. Though experts say it is the most difficult but the most effective way to create long-term employment. Nigeria churns out thousands of graduates- engineers, computers programmers, architects, operations researchers, chemists, surveyors, designers etc yearly. The Nigerian government should establish additional innovation and invention centres across the country and in universities. The centres should work in such a way that, graduates with technical skills and entrepreneurship passion, will have access to facilities and environment that support thinking for invention and innovation. The Raw Material Research and Development Agency, National Technology Incubation Centre, Small and Medium Enterprise Development Agency of Nigeria [SMEDAN], National Office for Technology Acquisition and Promotion, National Poverty Alleviation Programme, National Directorate of Employment (NDE) as well as Bank of Industries will play a vital role in such a scheme. Moreover, private investors can also be major participants, as they can play the role of fund providers for any invention or innovation that has market potentials. With this kind of scheme, it is possible to see new industries surface; the economy gradually grow and lots of good paying jobs created.

The setting-up of small scale industries is also a good way to create jobs. This can be done through systemic as well as systematic approach- i.e. steer resources into the productive process as well as tied it to the aforementioned two ways to create employment- agricultures and ideas development. Goods produced from the farms and the technologies developed from the R&D centres will serve as raw materials for the industries. The Nigerian markets are overflowing with imported products, such as razor blades, pine needles, envelopes, keys and padlocks, cotton buds, toys, shoelaces, safety matches, umbrellas, doormats, office square clips, treasury tags, table flags, carpets. Though, no country is free from imported products. However, most of these items are produced from agricultural produce and simple technologies developed by graduates and under-graduates and manufactured by small industries owned and run by a family of two or three in Shanghai, Taipei, Manila or Bombay. These small industries can be powered and run by solar panels or small wind turbines. Nigeria has the resources and human capital to develop such small industries.

The waste to wealth programme has been a much talked about issue in Nigeria. However, no concentrated government effort has been put in place for Nigeria to take advantage of the enormous wastes the country generates. The waste to wealth approach is another way to create productive employment for Nigeria. This can be tied to small scale industries development. All the three tiers of government should establish or support private efforts in wastes processing centres for plastics, scrap steel, paper, organic waste etc.

Another way to create more jobs and wealth for Nigerians is through the strengthening and supporting the already existing industries, which were developed outside any formal support. These include sport, music, art, fashion design and the movie industries. Nigerian government can use these industries to create jobs and generate wealth, by hunting for top quality talented Nigerians, provide them with world–class training through assisting private entrepreneurs to establish well-equipped recording studios, sport development enterprises and remove every obstacle that hampers the flourishing of these industries. The federal government recent 200 million dollar entertainment industry intervention funds, as well as CBN’s aggressive support to private businesses are good steps.

The electricity sector reform is ongoing. However, the government is not talking about a very important aspect of it- how common Nigerians can be major players in the industry. PHCN still sells electricity credit voucher directly to consumers. A system similar to the telecommunication industry should be established, so that ordinary Nigerians can start selling PHCN electricity vouchers to consumers. This will create more jobs as well as ease the purchase of the electricity credit vouchers.

No employment and wealth creation programmes or project can succeed without adequate funding; availability of efficient and reliable electricity, as well as good planning. Nigeria is not a super-rich nation and is also facing a daunting electricity crisis. Does that mean the country has to wait until it solves these problems before embarking on a workable job creation project? Certainly, no. Funding can be sourced through public-private partnership. Governments at all levels can also offer big establishments tax incentives- Tax relief for jobs – government should grant tax relief for businesses in return for the employment and support to individuals in the area of research and ideas development. Another way to source for funds includes an aggressive drive in getting lottery taxes paid- because lottery is now a huge business in Nigeria. For instance, most of the telecom operators are big lottery players- so the government can get substantial funds if every lottery player pays the right tax. The proposed investment of the unclaimed shares’ dividend is another way to generate funds for such a scheme. Lastly, another way to generate fund is via states’ partnership – where two or three states come together contribute funds monthly, bi-monthly or tri-monthly to fund any of the suggested ways to create employment. This should go round each of the contributing state within the chosen period.

Apart from the issues of funding and poor infrastructure; adhoc planning has been a major factor that contributes to failure of most efforts by government to tackle the high rate of unemployment in Nigeria.

As suggested by Mallam El-Rufai, the activities of job and wealth creation agencies of government should be streamlined in such a way that each agency will focus on a specific field or medium of job creation. For example, NAPEP should concentrate on supporting artisans to develop and improve their skills; SMEDEN should concentrate on job creation via small scales industries; National Office for Technology Acquisition and Promotion via ideas development, NDE on job creation through agriculture; while the NYSC should be revitalized to also function as graduates’ job creation agency.

Zayyad I. Muhammad writes from Jimeta, Adamawa State, zaymohd@yahoo.com, 08036070980

Let the Local Governments Start Working

The local government system in Nigeria is not working. The reason being that, some states government overwhelming control the third tier of government through the operation of the unpopular joint accounts, in addition to massive bribery, extortion, embezzlement, graft, nepotism and political patronage prevalent in the system.

The founders of the Nigerian local government system and the crafters of the Nigerian constitution envisaged a local government system that will bring development along the local people’s culture

and expectations. But sadly, the system is today a true reflection of the decay in the Nigeria state. It has been forgotten in Nigeria’s development equation- Nigerians put more expectation and emphasises on the President and the Governors, rather than the local authorities.

There is a school of thought that suggests that more constitutional reforms are needed to strengthen the local government system. However, the fourth schedule of the 1999 Nigerian constitution coupled with some important judgements made by the Supreme Court on issues affecting the local government system are good enough to strengthen the system.

The fourth schedule of the Nigerian constitution has clearly spelt out the functions of a local government council, but they have been abused and neglected. Imagine the local councils performing some of their functions as stated in the Nigerian constitution, for example: construction and maintenance of roads, streets, street lightings, drains and other public highways, parks, gardens, open spaces, or such public facilities; provision and maintenance of public conveniences, sewage and refuse disposal; establishment, maintenance and regulation of slaughter houses, slaughter slabs, markets and motor parks; assessment of privately owned houses or tenements for the purpose of levying such rates as may be prescribed by the House of Assembly of a state, collection of rates, radio and television licences, establishment and maintenance of cemeteries, burial grounds and homes for the destitute or infirm,naming of roads and streets and numbering of houses; registration of all births, deaths and marriages; control and regulation of out-door advertising and hoarding, movement and keeping of pets of all description, shops and kiosks, restaurants, bakeries and other places for sale of food to the public, laundries, and licensing, regulation and control of the sale of liquor. Regrettably, most state governments have systematically taken over some of these functions , especially as it relates to tax collection. For instance, the power to control and regulate out-door advertising and hoarding and other tax sources which are under the prerogative of local governments have been cleverly usurped by most states government, who make huge revenues from it.

As earlier mentioned, the operation of the joint account between states and local government councils, corruption and the poor attention the public and civil society organisations pay toward the situation in the local governments are major factors that are contributing to the inefficiency of the system. A saying goes thus: The less involved we are in our local community politics, the less aware we are of corruption in the system. Instead of serving as channels through which development and government's policies impact on the local people, as well as serve as a political training centre to afford future leaders opportunity to learn the art of good governance, the system has been transformed into breeding ground for bad leaders.

Time has come for the reinvigoration of the local government system through the elimination of the operation of the joint account. The elimination of the joint accounts will bring relief to the councils and enhance their capacity, as well as reduce the burden of public expectation on governors. It will also make local councils to be responsive to their constitutional duties. Due to the operation of joint account, most local councils in Nigeria are only able to pay salaries.And when they are able to, what is left is always too small to spend on development and it ends up in officials’ personal pockets. Though, the idea behind the joint account was to eliminate corruption in the local governments, it has eventually turned out to be the worst thing that has ever happened to the local government system.

Local council should prioritise their needs and the general public should pay more attention to the operations of the local government. People should also be more involved in who occupies executive and legislative positions in the local councils. More public attention should be geared toward, not only investigating where public funds are spent, but assessing whether projects or programmes executed benefit local people. That is, if projects are relevant to a community or are executed in order to enrich someone’s pocket?

Local councils should start implementing joint projects so as accelerate development and make funds easily available- two or three local councils should come together and contribute funds monthly, bi-monthly or tri-monthly to fund development projects. This should go round each of the contributing council within a chosen period. Another way by which local councils would boost their internally generated revenues (IGR) is through taxation. For instance, the advertising industry is today a viable source of revenue for government, and advertising taxes are under the purview of local governments. Commercial motorcycles and tricycles, which have become parts of the Nigerian system, are employing thousands of youth. Local councils collect taxes from the operators, thus it has become a good source of IGR, which need to be fully and judiciously utilized.

Monies meant for local governments should directly go to them. However, each council should be accountable for every kobo spent. The election of local officials is very skewed; once one belongs to the ruling party in the state; his or her election into any office in the local government is assured. The considerable electoral reform Nigeria witnessed recently, should also get to the local level. This will bring legitimacy and accountability to the councils, as well as enhance democratic decision-making at the local level and the social and economic wellbeing of local people.

The local councils are very important agents for economic development. This is because, 26% of national revenue goes to them, and being a well-defined entity, i.e. each has a ward with a councillor, the needs of communities within a ward are easily identified. Responsible people should vie for local councils positions; states government especially Governors and State Houses of Assembly should relax their tight grip on the councils; the public, NGO’s and activists should equally start paying attention to the local council’s activities. With these, the local government system will start working.

Zayyad I. Muhammad writes from Jimeta, Adamawa State, zaymohd@yahoo.com, 08036070980.

Jonathan and the Presidential Summit on Job Creation

President Goodluck Jonathan; top government officials and leaders of the private sector, on Tuesday 12th April, 2011, attended a presidential summit of job creation, organised by The National Economic Management Team (NEMT). The summit brainstormed on areas like small and growing business and entrepreneurship, vocational education and job centres; graduate employment and businesses process outsourcing, public work and local content development and innovation. Pessimists see the summit as the usual ploy by Nigerian politicians to get votes during election time, while optimists see it as good step in the right direction.

Whichever way one sees it, the truth is, widespread unemployment is the grease that smoothens the spread of abject poverty and insecurity in Nigeria. Indeed, the hallmark of poverty and crimes in Nigeria is the high level of unemployment among her active-age citizens. If Nigeria can tackle the high rate of unemployment in the country by creation of productive employment for its millions of unemployed citizens and those engaged in unproductive-manual jobs, doors to prosperity in the land will open.

Even in developed countries, unemployment rates may be high and availability of jobs also tends to fluctuate, creating periods of high joblessness. However, most stable and promising countries have systems in placed to cushion and tackle such situations. Nigeria being a country with high population, an unemployment level of only a few percentage means that millions of working-age people will be unemployed and unable to earn adequate income for a decent living. This should be an issue of great concern to the political leaders and managers of Nigeria’s economy, because, one of the basic ingredient in the reduction of crimes and attainment of sustainable general social order in any society, is the availability of jobs for majority of the working population- especially the youth.

The National Economic Management Team (NEMT), the organisers of the summit, should have it on their minds that various Nigerian governments have organised many summits; established quite a number of employment creation programmes, projects and policies, including the setting-up of the National Directorate of Employment and various states’ agencies. However, the unemployment rate in Nigeria is growing astronomically. The big question is- what went wrong? Two issues of course: The old notion among policy formulators and managers of Nigeria’s economy that unemployment is wage unemployment and that it is an urban phenomenon. Second to this is, the near failure of most of the employment and poverty eradication programmes to encourage the youth, rural dwellers and the poor to participate in and benefit from the process.

Nigeria needs to redesign her jobs and wealth creation programmes for better results. This will go a long way in increasing national output that will speed up and sustain economic growth, as well as, encourage the youth, private sector and the rural poor to be strong participants in the economy. Futhermore, there is need for the elimination of what experts call ‘disguised unemployment’- which prevails especially in the Nigerian agricultural sector.

The summit’s agenda, which include, small and growing business, entrepreneurship, vocational education and job centres; graduate employment and business process outsourcing, public work and local content development and innovation are excellent. However, there is need for these to be implemented in such a way that they encourage the youth, rural dwellers and the poor to participate in and benefit from the process, while also complementing them with lower taxes, reduction of interest rates as well as incentives to businesses.

One of the most important strategies to tackle unemployment is an agricultural entrepreneurship programme for youth. It is good news that the Federal Government is already looking at that direction. The Government should go into partnership with private sector to establish poultry, fisheries, dairy, snellnaries farms, plantations etc in various locations in the country. The pilot phase should start with youth corpers. They should be trained-on-the-job on how to manage farms. After passing-out from the NYSC scheme, the farms should be transferred to them for management as entrepreneurs. The scheme should work in such a way that local councils and state governments should provide lands and other logistics, the private sector provides the fund while the federal government stands as the guarantor of fund. This will be done through the issuance of either callable, par value or coupon rate bonds. The private investors or financial institutions who will participate in the scheme are not to give money directly to the governments in order to receive the bond-certificate, but it would be a kind of batter arrangement; where the investors- either financial institution or private individuals would setup farms, in addition to putting in place all structures required in a standard farms. After which a bond certificate equivalent to the cost, which is to be determine by both parties and experts will be issued to them. The youths, to whom the farms are to be transferred, should gradually refund the monies back to the government; so as to make the scheme a revolving one, as well as to eliminate any form of mismanagement or corruption.

The summit also discussed Ideas Development as a way to create employment for Nigerians i.e. the well known concept of: Innovate, create, invent and invest. Though experts say it is the most difficult but the most effective way to create long-term employment. Nigeria churns out thousands of graduates- engineers, computers programmers, architects, operations researchers, chemists, designers etc yearly. The Nigerian government should establish additional innovation and invention centers across the country and in universities. The centers should work in such a way that, graduates with technical skills and entrepreneurship passion, will have access to facilities and environment that support thinking for invention and innovation. The Raw Material Research and Development Agency, National Technology Incubation Centre, Small and Medium Enterprise Development Agency of Nigeria [SMEDAN], National Office for Technology Acquisition and Promotion as well as Bank of Industries will play a vital role in such a scheme. Moreover, private investors can also be major participants, as they can play the role of fund providers for any invention or innovation that has market potentials. With this kind of scheme, it is possible to see new industries surface; the economy gradually grow and lots of good paying jobs created.

The setting-up of small scale industries is also a good way to create jobs. This can be done through systemic as well as systematic approach- i.e. steer resources into the productive process as well as tied it to the aforementioned two ways to create employment- agricultures and ideas development. Goods produced from the farms and the technologies developed from the R&D centres will serve as raw materials for the industries. The Nigerian markets are overflowing with imported products, such as razor blades, pine needles, envelopes, keys and padlocks, cotton buds, toys, shoelaces, safety matches, umbrellas, doormats, office square clips, treasury tags, table flags, carpets. Though, no country is free from imported products. However, most of these items are produced from agricultural produce and simple technologies developed by graduates and under-graduates and manufactured by small industries owned and run by a family of two or three in Shanghai, Taipei, Manila or Bombay. These small industries can be powered and run by solar panels or small wind turbines. Nigeria has the resources and human capital to develop such small industries.

The waste to wealth programme has been a much talked about issue in Nigeria. However, no concentrated government effort has been put in place for Nigeria to take advantage of the enormous wastes the country generates. The waste to wealth approach is another way to create productive employment for Nigeria. This can be tied to small scale industries development. All the three tiers of government should establish or support private efforts in wastes processing centres for plastics, scrap steel, paper, organic waste etc.

Another way to create more jobs and wealth for Nigerians is through the strengthening and supporting the already existing industries, which were developed outside any formal support. These include sport, music, art, fashion design and the movie industries. Nigerian government can use these industries to create jobs and generate wealth, by hunting for top quality talented Nigerians, provide them with world–class training through assisting private entrepreneurs to establish well-equipped recording studios, sport development enterprises and remove every obstacle that hampers the flourishing of these industries. The federal government recent 200 million dollar entertainment industry intervention funds, as well as CBN’s aggressive support to private businesses are good steps.

The electricity sector reform is ongoing. However, the government is not talking about a very important aspect of it- how common Nigerians can be major players in the industry. PHCN still sells electricity credit voucher directly to consumers. A system similar to the telecommunication industry should be established, so that ordinary Nigerians can start selling PHCN electricity vouchers to consumers. This will create more jobs as well as ease the purchase of the electricity credit vouchers

No employment and wealth creation programmes or project can succeed without adequate funding; availability of efficient and reliable electricity, as well as good planning. Nigeria is not a super-rich nation and is also facing a daunting electricity crisis. Does that mean the country has to wait until it solves these problems before embarking on a workable job creation project? Certainly, no. Funding can be sourced through public-private partnership. Governments at all levels can also offer big establishments tax incentives- Tax relief for jobs – government should grant tax relief for businesses in return for the employment and support to individuals in the area of research and ideas development. Another way to source for funds includes an aggressive drive in getting lottery taxes paid- because lottery is now a huge business in Nigeria. For instance, most of the telecom operators are big lottery players- so the government can get substantial funds if every lottery player pays the right tax. The proposed investment of the unclaimed shares’ dividend is another way to generate funds for such a scheme. Lastly, another way to generate fund is via states’ partnership – where two or three states come together contribute funds monthly, bi-monthly or tri-monthly to fund any of the suggested ways to create employment. This should go round each of the contributing state within the chosen period.

Apart from the issues of funding and poor infrastructure; adhoc planning has been a major factor that contributes to failure of most efforts by government to tackle the high rate of unemployment in Nigeria. The activities of job and wealth creation agencies of government should be streamlined in such a way that each agency will focus on a specific field or medium of job creation. For example, NAPEP should concentrate on supporting artisans to develop and improve their skills; SMEDEN should concentrate on job creation via small scales industries; National Office for Technology Acquisition and Promotion via ideas development, NDE on job creation through agriculture; while the NYSC should be revitalized to also function as graduates’ job creation agency etc. This writer elaborated on how the NYSC can be galvanized to play such role in a piece published in the Thisday of March 10, 2009, Page 18 and the Daily Trust of Feb 26, 2009, Page 12.

The Presidential Summit on Job Creation recommendations should be a Nigerian project- it should be a true reflection of its theme- Putting Nigerians to Work For Nigeria. It implementation should be productive and beneficial to the Nigeria society for years to come. This will assure both pessimists and optimist that it is a clear leap forward for job creation- especially for the youth.

Zayyad I. Muhammad writes from Jimeta, Adamawa State, zaymohd@yahoo.com, 08036070980.

 

Northern Nigeria New Challenge

The politics of who gets what shouldn’t be of much concern to northern Nigeria, but the growing sectarian violence of a frightening magnitude, fuelled by economic crisis and wide gap in social–order. It’s northern Nigeria’s 21st century new challenge. Despite the fact that this recurrent violent conflict has its roots in the social and economic turmoil arising out of the region’s age-long challenges of absolute poverty, illiteracy, ethnic and religious differences, two others factors have also helped to escalate the crisis to its present terrifying point. The two factors are: the continuing decline in the patriotic zeal of north’s political class to free the region from the prison of underdevelopment. And, the growing ‘We’ and ‘They’ feeling that is gradually defining life in the north.

In every instance, the region’s poor, the weak and rural dwellers are often the victims. Their self-help efforts to battle and surmount these challenges always met brick walls. Indeed, the common people’s efforts seem not enough and their hope of feasible solutions from the constituted authorities has always been dashed. It thus seems, the political class in the north has failed the masses.

Notwithstanding the locations, magnitude, as well as the victims of this growing violent conflict, everyone, including the political, religious, traditional and the business classes, in their comfort zones, must get ready to take up a political, legal and ideological war against this recurrent violence. In fact, the elites of the north must realize that outsiders’ perception of the north, which they claim leadership over, has changed. Reason being that, other Nigerians and the world see what is happening in the north as an extension of global terrorism. The world would now pay more attention to northern Nigeria and the region will increasingly be in the news, negatively, and as it appears, it might be there for a long time.

This is a big challenge to northern Nigeria political, traditional and religious class; because the world and the indeed the Nigerian state demand a lot from them. Good leaders are always expected to proffer quick and timely solutions to their society’s nagging problems. But is the leadership in the north ready to confront this new challenge head-on? Or are we in for the usual Nigerian political leader’s habit of ignoring problems with a wave of hand, thinking it will naturally die-out? Ignoring this crisis is costing the north a lot. It is time for a rethink. Northern leaders should turn things around because the situation we are is not where we ought to be.

The recent bomb explosions and flashes of gruesome attacks in some parts of the north have given an international dimension to a local ethno-religious-economic conflict hitherto being fought with words–of-mouth, machetes, swords, bows and arrows. Some observers are of strong opinion that international terror groups have infiltrated Nigeria’s shores. If this assumption is established to be true, then, the political class in the north and indeed Nigeria, should remind themselves that since the 9/11 attacks on the United States, the war on terror has taken a different dimension, it is now presented as military, political, legal and ideological war against regimes, regions and organizations that has ties with or shows any signs of being potential terrorists sleeper cell. Is northern Nigeria and Nigeria as a whole ready to face this big challenge? The answer is anybody’s guess.

Terrorism has become increasingly common among those pursuing extreme goals throughout the world. Thus, fighting it has become a herculean task; it requires intensive intelligent gathering, as well as cross-border cooperation. Terrorism being a conflict that often dazzles authorities; when it rears its head, the nature may not be fully realised. And criminal activity may be mistaken for terrorism, or the other way round. So, authorities, especially the political class in the north should tackle this new challenge via two ways: first is development that will align with the expectations of the people, while the second is enlightening and educating the populace through honest engagement.

The basic causes of poverty in northern Nigeria are the absence of an enabling environment that will free the people from the prison of poverty; unequal distribution of resources; lack of basic education and infrastructure, in addition to the absence of employment opportunities that would raise peoples’ living standard and provide ways to assist them turn their dreams into reality. The north can fairly get wealthy by simultaneously developing her agricultural sector, small scale industries and human capital. That is, putting in place a process through which the region’s economy is transformed over defined period, by the revitalization of the agricultural sector, propelling small scale industrialisation and placing the region in a position so that her citizens can take advantage of the vast opportunities the Nigerian and the world economies offer. More importantly, the development plan should be tied to creating employment opportunities for the youth through education, training and reliable micro-finance systems.

The aforementioned second way to confront this violence is enlightening the people. This should be skewed towards the use of the radio. Radio is an important medium of reaching majority of the people in the north. In fact, almost everybody in the region listens to the radio in the morning before going work, afternoon and in the night before going to sleep. State governments should collaborate with local radio stations, NGOs and more importantly, the western world owned radio stations like the BBC, VOA, Deutsche Welle, Radio France International, etc, they have a very large listenership of their Hausa programmes in the north.

Quality leadership will also a have strong impact on finding a solution to this crisis. For instance, despite being in primary school, this writer can still vividly remember how quality leadership skills were used to quench the 15th Feb. – 2nd March 1984 Maitatsine revolt in Jimeta-Yola, Adamawa State. In particular, the Late Lamido, Dr. Aliyu Mustafa and then Military Governor of old Gongola State, who is now the Emir of Gwandu, Alhaji Muhammad Bashir Illiyasu, showed quality leadership skills in bringing together community people of diverse background to defend their wards. For instance, in my ward, Clerks Quarters, a cosmopolitan area in Jimeta-Yola, where the Professor Emeritus, Okey Ndibe grew up, was defended by men of diverse ethnic and religious background. One of the groups was led by an Igbo man.

The north is in a crisis with itself, and it now seems the region has been infiltrated by forces outside the shores of Nigeria, as a result of the crisis. This is a challenge to the region, but a bigger one to her political, tradition, religious and business leaders. They have to return the region to her earlier, simple and brotherly way of life.

Zayyad I. Muhammad writes from Jimeta, Adamawa State, zaymohd@yahoo.com, 08036070980.

It’s Time to Reduce Poverty in Nigeria

The average Nigerian is a poor man. Indeed, Nigeria is a country of riches and poverty- splendid wealth in few hands and extreme abject poverty at most people’s doorsteps. The problem of poverty is colossal and pervasive in the country and it has many causes. The number of people living in poverty has increased due to rising disparities in the distribution of resources in the country. However, the basic cause of poverty in Nigeria is the absence of an enabling environment that will free the people from the prison of poverty; uplift their living standard and provide ways to assist them turn their dreams into reality.

It is a fact that primary factors that lead to poverty, such as overpopulation, unequal distribution of resources, lack of basic education, absence of employment opportunities, as well as environmental degradation are quite intractable and not easily eradicated, but the average Nigerian can leapfrog the ladder of prosperity; once the routes to achieving basic living standards are smoothened. Who should create these conditions? - The government at all the three levels. How? By imbibing the political will that propels new thinking within the political class as well as brings sustained all-inclusive economic growth.

In most cases, government actions and inaction create a good number of the causes of poverty. Therefore, the government that contributed in making people poor must also create conditions that will bring opportunities for prosperity. For the 50 years of the Nigeria’s existence, various governments have put in place poverty eradication programmes and policies. Yet, the average Nigerian is worse-off. The National Poverty Eradication Programme (NAPEP), the primary agency of government charged with the responsibility of coordinating and monitoring all poverty eradication activities has designed many programmes and policies meant to reduce poverty, one of these is The Village Economic Development Solutions Programme, a community based programme aimed at encouraging mass participation in the economic development process through the establishment of anchor economic activities at the grassroots, helping peasant farmers get ready markets for their farm produce. This is a good initiative, but it cannot in anyway reduce poverty, because, subsistence farming and unproductive manual jobs cannot remarkably improve a country’s GDP. And, a country’s level of poverty can depend greatly on its mix of population density and agricultural productivity. Bangladesh, for example, has one of the world’s highest population densities, with 1,078 persons per sq km. A large majority of the people of Bangladesh engage in low-productivity manual farming, which contributes to the country’s extremely high level of poverty. However, some of the smaller countries in Western Europe, such as The Netherlands and Belgium, have high population densities as well. But these countries practice mechanized farming and are involved in high-tech and small industrialization; therefore have high standards of living.

If we claim that such initiative by NAPEP cannot reduce the abject poverty in Nigeria. Then what needs to be done? It is embracing of holistic and reductionistic approaches in tackling developmental issues-this is the time Nigeria needs both approaches– approaches that will tackle poverty by uplifting individual and at the same time develops systems and processes, while also strengthening the structures on ground. For example, in recent decades, some nations have become fairly wealthy by developing their economies with small scale industries, simple technologies and more importantly, by creating employment opportunities for their citizens through education, training and reliable micro-finance systems. Nigerian can benchmark such ideas.

The hallmark of poverty in Nigeria is the high level of unemployment. If Nigeria can tackle the high rate of unemployment in the country; then one of the most important ways to smoothen the path for prosperity in the land has been found- thus, the goals of vision 20:2020 can be achieved easily. We must acknowledge that even in developed countries, unemployment rates may be high and availability of employment also tends to fluctuate, creating periods of high joblessness. Nigeria being a country with high population, an unemployment level of only a few percentage means that millions of working-age people will be unemployed and unable to earn an adequate income. This should be an issue of great concern to the political leaders and managers of Nigeria’s economy.

Nigeria can create productive employment for its millions of unemployed citizens and those engaged in unproductive-manual jobs through various means. The country has artisans such as shoemakers, fashion-designers, carpenters, goldsmiths, woodcrafters, welders and technicians, etc., who have the skills but lack the resources to setup productive and sustainable businesses. Offering assistance to such group of people will have huge impact on the country’s economy. For example, Turkey, Morocco and Iran are enjoying huge foreign exchange from handmade carpets made by small firms owned by individuals living in urban, semi urban and rural areas of these countries.

Equally, there are thousands of graduates in Nigeria who never dream of a pay-job either from the government or private sector, but their zeal is to be entrepreneurs. Government can assist such group of young people. The CBN’s N500bn intervention fund designed to boost the operational capacities in the manufacturing, small and medium enterprises and the power sectors as well as the recently announced Creative Industry Fund by President Goodluck Jonathan are good steps toward the empowerment of the citizens. The accessibility of such funds should be flexible and part of it should be used in developing many sector including the movie, music, I.T. sport, advertising, farming and technology-invention industries. For instance, there are hundreds of illegal solid minerals mine fields in Nigeria; government can organize the people who engage in such activities into smaller organized firms. This will create legitimate wealth and employment, in addition to more revenue for the government.

We shouldn’t forget the fact that, it is a little bit difficult to determine the poverty threshold of Nigeria because of many factors including lack of reliable data and statistics; however, there is general agreement among Nigerians that the hallmark of absolute poverty in the country is the high level of unemployment that cut across the nation. If the level of unemployment can be reduced by half of its current standing, Nigeria’s vision 20:2020 will be achieved. In fact, the country will be the fifth member of the BRICs. This thought should be close to the hearts of Nigerian leaders. They should start dreaming with the people on the streets, because it is time to reduce poverty in Nigeria.

Zayyad I. Muhammad writes from Jimeta, Adamawa State, zaymohd@yahoo.com, 08036070980.