₦airaland Forum

The Enugu State House of Assembly in today's session voted to sack the Deputy Governor, Sunday Onyebuchi from office.
The Assembly had earlier accused Mr. Onyebuchi of operating a commercial poultry farm at his official residence.

It did not help matters that Ghana did not treat her neighbours such as Nigerians kindly during their years of abundance.
I recall all the obstacles the Ghanaian government put along the way to dissuade potential Nigerian investors. I’m sure now they wish they hadn’t done so, but again, the damage is done, for I can’t see those Nigerians rushing out to rescue Ghana from itself.
Not so long ago, Ghana was the poster child of everything that could go right about sub-Saharan Africa, and this wasn’t anything new; the country has always been ahead of the pack. In spite of the agitation for independence by people like Herbert Macaulay and Nnamdi Azikiwe, both of Nigeria, Ghana managed under Kwame Nkrumah to obtain its independence from Britain in 1957, three years ahead of Nigeria and most other African countries. In recent years, Ghana became the place to be in Africa. The economy was booming, the country stable with successive peaceful and transparent democratic successions. They had steady power supply, low inflation, and new offshore oil discoveries that portend vast riches.
Ghana became the number one destination for black Americans and Jamaicans for resettlement and for investment. Even Nigerians began flooding the streets of Ghana for business and leisure, while many more simply sent off their children to schools there.
In the past few days, however, Ghanaians have taken to the streets in protest about the state of their economy, rising inflation, and the declining value of their local currency, the cedi. The Ghanaian President, John Muhama, recently indicated that Ghana was about to seek financial bailout from the IMF. Isn’t it amazing how times have changed for Ghana, and rather suddenly because just a couple of years ago Ghana was still recognized as the shining example of stability in West Africa? Only last year, the country celebrated ten years of uninterrupted power supply, something most Nigerians can only dream about. About six months ago, I heard of the first signs that all was not well with Ghana’s economy. At first, I thought it might be just a minor hiccup, perhaps a small or rather soft-landing of an overheated economy, or maybe that it was only an unfounded rumour without any merit. Unfortunately, everything I heard turned out to be true, and even worse.
I have since wondered what happened to Ghana, how could a well-managed economy with seemingly less corruption than its neighbour Nigeria suddenly take a nose dive? The answer is still blowing in the wind, but there are a few pointers that might lead us to where the problem began. First, sometime ago Ghana decided to revalue the cedi. The central bank applied a reverse split that ultimately brought the formerly weak currency to par with the US dollar. For example, if one had one million cedi in the bank, after the reverse split the person may now end up with a thousand cedi, but that cedi will have the same purchasing parity with the US dollar. I recall publishing an article in the US when Ghana did this, warning that the country was embarking on a never-ending slippery slope. At the time I cited countries like Mexico that have tried doing this with their Peso and how they have revisited that valuation more than once.
In 2007, Nigeria’s Central Bank Governor, Chukwuma Soludo attempted a similar revaluation of the naira, and I published an article (Go East, to China, young man) in which I cautioned against that move. I reposted that same article in March last year, cautioning Sanusi.
Fortunately for Nigeria, but for political reasons, the Umaru Musa Yar’adua government stopped Soludo from carrying on the revaluation. I believe that Ghana has re-valued its currency more than once since the first time, and currently the cedi has lost 50% of its value this year alone, making it the worst performing currency in the world so far in 2014. As the cedi depreciates, so does the cost of buying products from overseas, which is passed on to the consumers and consequently inflation in Ghana has now topped 15% this year. As mentioned, Ghana celebrated ten years of uninterrupted power supply last year. It was as if Nigeria, which has failed to achieve even a day of uninterrupted power supply, decided to rein in on their parade. Nigeria supplies most of the gas used to power the electric plants in Ghana, and lately as Nigeria experienced stoppages due to gas pipeline vandalism, the supply to Ghana was finally affected. And suddenly Ghana began to experience rolling blackouts and just downright power failures that sometimes last for weeks in some neighbourhoods. Well, I say to them, welcome to the Nigerian world.
Surely lack of power must have accounted for significant drops in manufacturing and other business activities, especially for people that have grown accustomed to steady power supply through the years; and some might have failed to make necessary provisions for alternative source of power as most Nigerians do. But the major measurable source of decline is about the price of gold. Gold represents about 45% of Ghana’s export, and gold prices have declined in recent times, undoubtedly affecting that nation’s income. Cocoa has equally been on the decline, though Ghana has significantly reduced its dependency on cocoa export since the commodity was the dominant foreign exchange earner for it back in the fifties and sixties. Apparently overreliance on one product as it is with gold in this case has come to bite Ghana harder than they expect. As bad as it is for Ghana that gold represents 45% of their export, can you now imagine what could happen to Nigeria if and when oil prices crash as oil represents well over 90% of our export revenue? The potential outcome is simply unfathomable, yet no one in Nigeria’s government has taken out time to think seriously about its potentially devastating effects.
A few years back, Ghana discovered oil in their offshore waters and they have spent quite a bit of money to develop those oil wells. Its planning on what to do with the oil revenue was more structured and acclaimed to be something of a forward thinking approach. But in the end, the amount of oil being tapped has fallen far short of expectation. Amid all these shortages here and there, the government of Ghana has become highly stretched, and are now desperately struggling to make up for these shortfalls, but it appears that the damage has been done, and anything short of a major bailout would mean doom for the country.
Ghana has come a long way; in 2007 it became the first country in sub-Saharan Africa other than South Africa to issue international bonds. Today, it’s unlikely that issuing more international bonds would be part of the solution as those international investors are now fleeing in droves. It did not help matters that Ghana did not treat neighbours such as Nigerians kindly during the years of abundance. I recall all the obstacles the Ghanaian government put along the way to dissuade potential Nigerian investors. I’m sure now they wish they hadn’t done so, but again, the damage is done, for I can’t see those Nigerians rushing out to rescue Ghana from itself.
The bottom line is that Ghana is not quite like Nigeria. The economy of Lagos and Akwa Ibom combined is greater than that of Ghana, and its population is under 30 million. But there are lessons here for Nigeria. If this can happen to Ghana, it surely can happen to Nigeria. Our over reliance on oil for export revenue is one thing that makes Nigeria overexposed to the risk of price fluctuations or, worse, a crash in price. Our inability to provide constant power supply continues to be a drain on the cost of doing business in Nigeria. Our cost of supporting the naira is unaffordable to this economy, and I have written about this issue before.
There is no doubt that corruption has played some role on what is going on in Ghana, I am certain that we have far greater corruption in Nigeria. And finally, we must always keep our doors open; this is America’s best kept secret. Open doors mean a constant flow of hungry immigrants that are willing to work harder than the otherwise settled population. We have repeatedly flaunted how Nigeria is growing at 7% annually; this is no longer true. Last year, Nigeria’s economy grew at just under 6% but I am sure that your political leaders won’t tell you this.
And finally, as the champagne begins to flow in Abuja and across most state capitals in anticipation of next year’s election, I hope we still keep our eyes on the ball…on the economy of Nigeria before we suddenly hear stories as it is happening in Ghana today.
Nnebe, an author, is a former Wall Street Investment banker

here and there, the government of Ghana has become highly stretched, and are now desperately struggling to make up for these shortfalls, but it appears that the damage has been done, and anything short of a major bailout would mean doom for the country.
Ghana has come a long way; in 2007 it became the first country in sub-Saharan Africa other than South Africa to issue international bonds. Today, it’s unlikely that issuing more international bonds would be part of the solution as those international investors are now fleeing in droves. It did not help matters that Ghana did not treat neighbours such as Nigerians kindly during the years of abundance. I recall all the obstacles the Ghanaian government put along the way to dissuade potential Nigerian investors. I’m sure now they wish they hadn’t done so, but again, the damage is done, for I can’t see those Nigerians rushing out to rescue Ghana from itself.
The bottom line is that Ghana is not quite like Nigeria. The economy of Lagos and Akwa Ibom combined is greater than that of Ghana, and its population is under 30 million. But there are lessons here for Nigeria. If this can happen to Ghana, it surely can happen to Nigeria. Our over reliance on oil for export revenue is one thing that makes Nigeria overexposed to the risk of price fluctuations or, worse, a crash in price. Our inability to provide constant power supply continues to be a drain on the cost of doing business in Nigeria. Our cost of supporting the naira is unaffordable to this economy, and I have written about this issue before.
There is no doubt that corruption has played some role on what is going on in Ghana, I am certain that we have far greater corruption in Nigeria. And finally, we must always keep our doors open; this is America’s best kept secret. Open doors mean a constant flow of hungry immigrants that are willing to work harder than the otherwise settled population. We have repeatedly flaunted how Nigeria is growing at 7% annually; this is no longer true. Last year, Nigeria’s economy grew at just under 6% but I am sure that your political leaders won’t tell you this.
And finally, as the champagne begins to flow in Abuja and across most state capitals in anticipation of next year’s election, I hope we still keep our eyes on the ball…on the economy of Nigeria before we suddenly hear stories as it is happening in Ghana today.
Nnebe, an author, is a former Wall Street Investment banker

disgrace to Nigeria's military

What about the missing the 20 billion dollar?

Well done

Right on go fight for it !....

Suit be make sense for oga Jona body o

Idrismusty97: Sanusi abeg step down before them kill all your people!

Hmmmmm bros abeg go check urself o

Waiting for die hard fans of Oga Jona to comment about this

op is suffering from schizophrenia

wow

Nigeria has been getting a lot of bad press lately, owing largely to the militant Islamist group Boko Haram’s abduction of more than 200 schoolgirls in April, part of a brutal campaign of kidnappings, bombings, and murder. But while these developments certainly merit international concern, they should not be allowed to obscure Nigeria’s recent achievements – or spur the outside world to turn its back on the country.

What is lost in most discussions about Nigeria today is the strong economic record that it has established over the last decade. In fact, a recent year-long study of the country by the McKinsey Global Institute (MGI) showed that, over the next 15 years, Nigeria has the potential to become a major global economy.

With roughly 170 million inhabitants, Nigeria has Africa’s largest population. But it has only recently been acknowledged as having the continent’s largest economy – 26th in the world – following the release of “rebased” data putting GDP at $510 billion last year.

MGI estimates that, in 2013-2030, Nigeria could expand its economy by more than 6% annually, with its GDP exceeding $1.6 trillion – moving it into the global top 20. Moreover, if Nigeria’s leaders work to ensure that growth is inclusive, an estimated 30 million people could escape poverty.

The problem is that Nigeria remains subject to outdated assumptions, which are limiting its prospects, especially among foreign companies and investors. For example, many believe that Nigeria is a petro-economy, wholly at the mercy of the world oil market. But the resources sector accounts for only 14% of GDP – meaning that, while oil production remains a critical source of revenue and exports, the Nigerian economy is far more diverse than many assume.

A related myth is that Nigeria’s economic growth is unstable, with large and unpredictable shifts in performance from year to year. In fact, as Nigeria has diversified its economy and detached public-spending plans from current oil prices (part of a 2004 budget reform), it has become increasingly stable, both economically and fiscally. Indeed, in recent years (2010-13, in “re-based” terms), GDP has grown by a steady 6-7%, owing more to rising productivity than to favourable demographics.

Finally, there is a general misunderstanding about the Nigerian economy’s evolution. Despite widespread poverty and low (though improving) productivity in almost all industries outside of the resources sector, Nigeria has a rapidly growing consumer class that will play an increasingly important role in driving growth.

By 2030, more than 34 million households, with about 160 million people, are likely to be earning more than $7,500 annually, making them aspiring consumers. This implies a potential rise in consumption from $388 billion annually to $1.4 trillion – a prospect that is already attracting investments by multinational consumer-goods producers and retailers.

Nigeria’s prospects are enhanced further by its strategic location, which will enable it to take advantage of booming demand across Africa and other parts of the developing world. Add to that a large and growing population and an entrepreneurial spirit, and the future looks bright.

In order to unleash this potential and ensure that the next decade of growth brings sharp reductions in poverty, Nigeria’s leaders must pursue reforms aimed at increasing productivity, raising incomes, and delivering essential services like health care and education more efficiently.

For example, to increase productivity and incomes in the agricultural sector, the government could pursue land title reform aimed at opening more farmland without deforestation; expand the use of fertilizer and mechanized equipment; and support a shift to more profitable crops. Moreover, improvements in distribution and marketing would allow farmers to keep more of the proceeds from the sale of their crops.

In urban areas, productivity suffers from a high degree of informal employment, sometimes even by major corporations. This keeps too many Nigerians in low-skill, low-paying jobs and deprives the economy of the dynamism that competitive small and medium-size enterprises create. The spate of internet startups that have emerged in Nigeria demonstrates that the skills are there, and tapping Nigeria’s diaspora can augment that talent pool.

To make it easier to do business in Nigeria, the government also will need to streamline processes for registering and running a legal business and, together with aid agencies and the private sector, increase investment in infrastructure. It will also need to intensify its fight against endemic corruption, which represents a tax on all businesses.

Finally, to promote inclusive growth – essential to relieving human suffering and mitigating social and political tensions – Nigeria must improve public service delivery dramatically. The fact that Nigeria lags behind countries that spend comparable amounts on public services proves that it has scope to improve. All that is needed to ensure that assistance – from seed subsidies to immunization – reaches those who need it most, regardless of where they live in the country, is a strong commitment from Nigeria’s leaders to build more effective and transparent government agencies.

Nigerians do not need sympathy or even outrage from the global community. What they need is support and encouragement. Only with stable and inclusive growth can Nigeria escape the clutches of brutal forces like Boko Haram and give its citizens the security and prosperity that they deserve.

Published in collaboration with Project Syndicate.

Authors: Paul Collier is Professor of Economics and Public Policy at the Blavatnik School of Government, Oxford University and a member of the World Economic Forum’s Global Agenda Council on Governance for Sustainability.

Acha Leke is director of McKinsey & Company and a member of the MGI Council, Africa. He is a member of the World Economic Forum’s Global Agenda Council on Africa.

delete asin kill abi?..op deris god o

nice one

no wir to hid

Op u forget to add dat u must know Oga at d top! Very important o

wow!

Na which one dey wan buy, na old one or na new ones?

This war between boys and girls for nairaland..Na who go win?

Na AA dey work so

Airtel! dey be 419 o

Every family get their own family problems joor

ichidodo: [color=#1980BC] A copy cat technology culled from the US Patriot Missile System...Isrealis aren't that smart..... [/color]

Israelis and u.s work hand in hand when it come to security

This one nor be news na....Na normal tin for 9ja

Poverty nor good o

Guy wake up

I just dey watch NFF FG and FIFA with my Google glass

[quote author=]you think so?[/quote]Android L is d New android os dropping very soon

Pdp na just dey cus problem for this country o

dre11: Abeg na who get pin mouth charger for here

Abeg go find woods use o ...just do am freestyle

What is going on in Ghana...Obama plz come to Ghana to help them o

Na crime to ask question again?