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Strictly Personal

World Bank’s reality check on Nigeria, and other stories by Adaoha Ugo-Ngadi

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Two unrelated developmental issues jolted me into reality a little over a week ago, March 22, to be precise. One of the events had a continental flavour to it, and the other touched on Nigeria’s deepening paradox of rich country, poor people.

Both issues had been of particular interest to me, as I had, over the years, developed a keen eye for subjects relating to changing patterns in Human Development Index (HDI).

It had been a long season of trying to catch some rest after months of poring through loads of documents in pursuit of venture opportunities. But it was also a tough call to completely resist the urge of rummaging the economic space in search of fresh developments.

So, here I was, on March 22, making the most of a new World Bank report titled, ‘A Better Future for All Nigerians: Nigeria Poverty Assessment 2022,’ which had just been released. The bank said that its findings had been the product of a two-year engagement on relevant data and analytics relating to poverty and inequality generated by Nigeria’s National Bureau of Statistics (NBS).

According to the report, as many as 4 in 10 Nigerians live below the national poverty line. It added that just 17 percent of Nigerian workers held the wage jobs best able to lift people out of poverty.

Indeed, the NBS in 2020 had reported that 40% or 83 million Nigerians lived in poverty while projecting that that the number of poor people would increase to 90 million, or 45% of the population, in 2022.

Now, the huge shame is that Nigeria has proved analysts right by maintaining its position as the poverty capital of the world, with 93.9 million of Africa’s most populous country currently living below the poverty line.

Every patriotic Nigerian must be genuinely concerned at this unenviable badge that has continued to portray our country as a bad example in leadership. Not even a promise by the Muhammadu Buhari-led administration to lift 100 million Nigerians out of poverty in ten years has brought some succour.

In fact, the picture is looking even more gloomy with Nigeria’s unemployment rate said to have risen to 35 percent in 2021, according to a report by credit rating agencies. Earlier in 2019, the estimated youth unemployment rate in Nigeria was put at almost 17.69 percent, just about half of the total population of the unemployed.

The bulging figures are not helped by latest data which have partly linked unemployment in Nigeria to the growing phenomenon of school graduates with no matching job opportunities.

The paradox of our existence is that while Nigeria remains celebrated for its natural endowments and human capital, a reality check has shown that inept leadership and corruption are the major reasons why poverty is at such a high rate in the country.

A journey in time clearly shows that our country’s bad run with poor leadership has its foundation in the enthronement of mediocrity, and primordial sentiments above excellence.

The anomaly has seen rational economic decisions supplanted for unrewarding political initiatives that yield little good to the larger society.

A radical departure from this dysfunctional system has become a national emergency or the country would hasten its steps towards a failed state. One way to avoid this pitfall is to build a culture of excellence, as exemplified in the global successes recorded by Nigerian youths who have seized the fintech space by storm.

In the other news, Dakar, Senegal, also took centre-stage as the world gathered to mark the 9th World Water Forum. Reports had noted that it was the first time the forum, the largest international water-related event, would be held in sub-Saharan Africa.

Organizers said the meeting would seek to identify, promote and implement concrete responses and actions for water and sanitation in an integrated way. The event which is in its 29th year has as its 2022 theme, ‘Groundwater, making the invisible visible.’

But this appears to be where the cheery news stops. A source of concern is the troubling stats which put the number of people living without access to safe water at 2.2 billion globally. Sadly, available records suggest that half of the people who drink water from unsafe sources live in Africa.

Indeed, in Sub-Saharan Africa, only 24% of the population have access to safe drinking water, and 28% have basic sanitation facilities that are not shared with other households. Any surprise then that open defecation and life expectancy remain embarrassing issues in most parts of Africa?

Beyond the fanfare in Dakar, African leaders must, therefore, take responsibility and be deliberate in their quest to reinvent their societies for sustainable development.

Let it be said that unless the sad tale of Africa’s underdevelopment is systematically reversed, its cohort of visionless leaders would have to brace for upheavals that may set their economies back into the dark ages.

 

Strictly Personal

Air Peace, capitalism and national interest, By Dakuku Peterside

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Nigerian corporate influence and that of the West continue to collide. The rationale is straightforward: whereas corporate activity in Europe and America is part of their larger local and foreign policy engagement, privately owned enterprises in Nigeria or commercial interests are not part of Nigeria’s foreign policy ecosystem, neither is there a strong culture of government support for privately owned enterprises’ expansion locally and internationally.

The relationship between Nigerian businesses and foreign policy is important to the national interest. When backing domestic Nigerian companies to compete on a worldwide scale, the government should see it as a lever to drive foreign policy, and national strategic interest, promote trade, enhance national security considerations, and minimize distortion in the domestic market as the foreign airlines were doing, boost GDP, create employment opportunities, and optimize corporate returns for the firms.

Admitted nations do not always interfere directly in their companies’ business and commercial dealings, and there are always exceptions. I can cite two areas of exception: military sales by companies because of their strategic implications and are, therefore, part of foreign and diplomatic policy and processes. The second is where the products or routes of a company have implications for foreign policy. Air Peace falls into the second category in the Lagos – London route.

Two events demonstrate an emerging trend that, if not checked, will disincentivize Nigerian firms from competing in the global marketplace. There are other notable examples, but I am using these two examples because they are very recent and ongoing, and they are typological representations of the need for Nigerian government backing and support for local companies that are playing in a very competitive international market dominated by big foreign companies whose governments are using all forms of foreign policies and diplomacy to support and sustain.

The first is Air Peace. It is the only Nigerian-owned aviation company playing globally and checkmating the dominance of foreign airlines. The most recent advance is the commencement of flights on the Lagos – London route. In Nigeria, foreign airlines are well-established and accustomed to a lack of rivalry, yet a free-market economy depends on the existence of competition. Nigeria has significantly larger airline profits per passenger than other comparable African nations. Insufficient competition has resulted in high ticket costs and poor service quality. It is precisely this jinx that Air Peace is attempting to break.

On March 30, 2024, Air Peace reciprocated the lopsided Bilateral Air Service Agreement, BASA, between Nigeria and the United Kingdom when the local airline began direct flight operations from Lagos to Gatwick Airport in London. This elicited several reactions from foreign airlines backed by their various sovereigns because of their strategic interest. A critical response is the commencement of a price war. Before the Air Peace entry, the price of international flight tickets on the Lagos-London route had soared to as much as N3.5 million for the  economy ticket. However, after Air Peace introduced a return economy class ticket priced at N1.2 million, foreign carriers like British Airways, Virgin Atlantic, and Qatar Airways reduced their fares significantly to remain competitive.

In a price war, there is little the government can do. In an open-market competitive situation such as this, our government must not act in a manner that suggests it is antagonistic to foreign players and competitors. There must be an appearance of a level playing field. However, government owes Air Peace protection against foreign competitors backed by their home governments. This is in the overall interest of the Nigerian consumer of goods and services. Competition history in the airspace works where the Consumer Protection Authority in the host country is active. This is almost absent in Nigeria and it is a reason why foreign airlines have been arbitrary in pricing their tickets. Nigerian consumers are often at the mercy of these foreign firms who lack any vista of patriotism and are more inclined to protect the national interest of their governments and countries.

It would not be too much to expect Nigerian companies playing globally to benefit from the protection of the Nigerian government to limit influence peddling by foreign-owned companies. The success of Air Peace should enable a more competitive and sustainable market, allowing domestic players to grow their network and propel Nigeria to the forefront of international aviation.

The second is Proforce, a Nigerian-owned military hardware manufacturing firm active in Rwanda, Chad, Mali, Ghana, Niger, Burkina Faso, and South Sudan. Despite the growing capacity of Proforce in military hardware manufacturing, Nigeria entered two lopsided arrangements with two UAE firms to supply military equipment worth billions of dollars , respectively. Both deals are backed by the UAE government but executed by UAE firms.

These deals on a more extensive web are not unconnected with UAE’s national strategic interest. In pursuit of its strategic national interest, India is pushing Indian firms to supply military equipment to Nigeria. The Nigerian defence equipment market has seen weaker indigenous competitors driven out due to the combination of local manufacturers’ lack of competitive capacity and government patronage of Asian, European, and US firms in the defence equipment manufacturing sector. This is a misnomer and needs to be corrected.

Not only should our government be the primary customer of this firm if its products meet international standards, but it should also support and protect it from the harsh competitive realities of a challenging but strategic market directly linked to our national military procurement ecosystem. The ability to produce military hardware locally is significant to our defence strategy.

This firm and similar companies playing in this strategic defence area must be considered strategic and have a considerable place in Nigeria’s foreign policy calculations. Protecting Nigeria’s interests is the primary reason for our engagement in global diplomacy. The government must deliberately balance national interest with capacity and competence in military hardware purchases. It will not be too much to ask these foreign firms to partner with local companies so we can embed the technology transfer advantages.

Our government must create an environment that enables our local companies to compete globally and ply their trades in various countries. It should be part of the government’s overall economic, strategic growth agenda to identify areas or sectors in which Nigerian companies have a competitive advantage, especially in the sub-region and across Africa and support the companies in these sectors to advance and grow to dominate in  the African region with a view to competing globally. Government support in the form of incentives such as competitive grants ,tax credit for consumers ,low-interest capital, patronage, G2G business, operational support, and diplomatic lobbying, amongst others, will alter the competitive landscape. Governments  and key government agencies in the west retain the services of lobbying firms in pursuit of its strategic interest.

Nigerian firms’ competitiveness on a global scale can only be enhanced by the support of the Nigerian government. Foreign policy interests should be a key driver of Nigerian trade agreements. How does the Nigerian government support private companies to grow and compete globally? Is it intentionally mapping out growth areas and creating opportunities for Nigerian firms to maximize their potential? Is the government at the domestic level removing bottlenecks and impediments to private company growth, allowing a level playing field for these companies to compete with international companies?

Why is the government patronising foreign firms against local firms if their products are of similar value? Why are Nigerian consumers left to the hands of international companies in some sectors without the government actively supporting the growth of local firms to compete in those sectors? These questions merit honest answers. Nigerian national interest must be the driving factor for our foreign policies, which must cover the private sector, just as is the case with most developed countries. The new global capitalism is not a product of accident or chance; the government has choreographed and shaped it by using foreign policies to support and protect local firms competing globally. Nigeria must learn to do the same to build a strong economy with more jobs.

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Strictly Personal

This is chaos, not governance, and we must stop it, By Tee Ngugi

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The following are stories that have dominated mainstream media in recent times. Fake fertiliser and attempts by powerful politicians to kill the story. A nation of bribes, government ministries and corporations where the vice is so routine that it has the semblance of policy. Irregular spending of billions in Nairobi County.

 

Billions are spent in all countries on domestic and foreign travel. Grabbing of land belonging to state corporations, was a scam reminiscent of the Kanu era when even public toilets would be grabbed. Crisis in the health and education sectors.

 

Tribalism in hiring for state jobs. Return of construction in riparian lands and natural waterways. Relocation of major businesses because of high cost of power and heavy taxation. A tax regime that is so punitive, it squeezes life out of small businesses. Etc, ad nauseam.

 

To be fair, these stories of thievery, mismanagement, negligence, incompetence and greed have been present in all administrations since independence.

 

However, instead of the cynically-named “mama mboga” government reversing this gradual slide towards state failure, it is fuelling it.

 

Alternately, it’s campaigning for 2027 or gallivanting all over the world, evoking the legend of Emperor Nero playing the violin as Rome burned.

 

A government is run based on strict adherence to policies and laws. It appoints the most competent personnel, irrespective of tribe, to run efficient departments which have clear-cut goals.

 

It aligns education to its national vision. Its strategies to achieve food security should be driven by the best brains and guided by innovative policies. It enacts policies that attract investment and incentivize building of businesses. It treats any kind of thievery or negligence as sabotage.

 

Government is not a political party. Government officials should have nothing to do with political party matters. They should be so engaged in their government duties that they literally would not have time for party issues. Government jobs should not be used to reward girlfriends and cronies.

 

Government is exhausting work undertaken because of a passion to transform lives, not for the trappings of power. Government is not endless campaigning to win the next election. To his credit, Mwai Kibaki left party matters alone until he had to run for re-election.

 

We have corrupted the meaning of government. We have parliamentarians beholden to their tribes, not to ideas.

 

We have incompetent and corrupt judges. We have a civil service where you bribe to be served. Police take bribes to allow death traps on our roads. We have urban planners who plan nothing except how to line their pockets. We have regulatory agencies that regulate nothing, including the intake of their fat stomachs.

 

We have advisers who advise on which tenders should go to whom. There is no central organising ethos at the heart of government. There is no sense of national purpose. We have flurries of national activities, policies, legislation, appointments which don’t lead to meaningful growth. We just run on the same spot.

 

Tee Ngugi is a Nairobi-based political commentator

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