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Nigeria moves up by 15 places to rank 131 in ease of doing business 2020

From its 146th position in the previous ranking, Nigeria has moved up 15 places to rank 131 out of 190 nations in the latest World Bank’s ease of doing business ranking released Thursday.

The country scored 56.9 as against 52.9 it scored in the previous ranking.

“Nigeria has embarked on a comprehensive reform journey following the example of Kenya. The motivation for reform in Nigeria, Tajikistan and Togo was part of the developmental achievements of their neighbours,” the report said.

Doing business ranking is based on quantitative indicators on regulation for starting a business, dealing with construction permits, getting electricity, registering property, getting credit, protecting minority investors, paying taxes, trading across borders, enforcing contracts and resolving insolvency.

Doing Business acknowledges the 10 economies that improved the most on the ease of doing business after implementing regulatory reforms. In Doing Business 2020, the 10 top improvers were Saudi Arabia, Jordan, Togo, Bahrain, Tajikistan, Pakistan, Kuwait, China, India, and Nigeria.

“These economics implemented a total of 59 regulatory reforms in 2018/2019, accounting for one-fifth of all the reforms recorded worldwide. Their efforts focused primarily on the areas of starting a business, dealing with construction permits and trading borders,” the report said.

According to the report, Nigeria appears to be one of the top 10 improvers for the second time.

 

Culled from Business Day

Food security and all that

Food security lies at the foundation of national power. Bonaparte famously observed that an army “marches on its stomach”. A viable state is not only one that is able to keep the common peace but also one that secures the lives and properties of citizens while feeding the population and upholding the rule of law.

During the first decade of independence, agriculture was the mainstay of our economy. We were relatively self-sufficient in food. According to economic historians, the only time Nigeria experienced real famine was in Sokoto, Katsina and Kano during the 1950s; in the aftermath of the Second World War, when colonial agricultural policy was redirected towards serving the British war effort rather than the needs of our people.

The other time was during the Civil War, when an economic blockade by the federal government led to a devastating famine in Biafra. The heart-breaking pictures of kwashiorkor-stricken children of Biafra continue to haunt me to this day. The debate on the morality of the blockade raises the same moral dilemmas as the decision by the Truman administration in the US to drop atomic bombs on the Japanese cities of Hiroshima and Nagasaki in1945. The blockade of Biafra was a humanitarian catastrophe; but the brutal fact is that it also brought the war to a speedy end in January 1970.

The discovery of oil changed everything. Oil windfalls provided funding for roads and other infrastructures. More clinics, hospitals, schools and universities were built. But it also led our political elites into behaving like drunken sailors. We were afflicted with what economists term “the Dutch Disease syndrome”, characterised by high exchange rates and a shift of all productive forces into the import sector to the detriment of agriculture and industrialisation.

The commanding heights of the economy were geared towards catering for the appetites of the urban elites. Local food production became unattractive. It made more sense to import food from abroad than to cultivate it locally. The import-licensing system became the vehicle for massive corruption and rent-seeking. The cement scandals of the post-war era became the metaphor for our collective folly.

Oil has proved to be bad for democracy. A system anchored on collecting rents from international oil companies means that the rulers feel no sense of accountability to the citizenry. Political theory has established some correlation between democratic accountability and the extractive capacity of the state. When the state imposes taxes on citizens and they willingly pay, it serves to reinforce the social contract obligations underpinning popular liberal democracy.

From the seventies to our day, all sorts of schemes have been put in place to promote food security; from Operation Feed the Nation (OFN) to the Directorate for Food, Roads and Rural Infrastructures (DFRRI). Most have failed.

Last week our presidency gave an order to the CBN to cease provision of foreign exchange for importation of all food items. The directive was based on the presumption that our country is already self-sufficient in food. During a recent TV interview, I described it as a “primitive” way of making policy, as it was seemingly based on a whim rather than a proper technical-scientific study.

Whilst it is true that we have made significant progress in rice production, with the import bill having fallen by more than 70 percent over the last 3 years, it is a logical fallacy to jump to the conclusion that we are now a food self-sufficient country.

Truth is, there is hunger in the land. Recently, there was an outbreak of famine in some of the IDP camps in Borno. Famine would have broken out throughout the country today were it not for the extravagantly costly Anchor Borrowers’ Programme launched by the CBN. Unfortunately, government has sabotaged its own policies by conveniently looking away as murderous herdsmen militias ravage the countryside. Many farmers are keeping away from their farms for fear of being attacked by rampaging herdsmen militias.

While I applaud government’s drive towards food security, it must be made clear that no country can be said to be totally self-sufficient in every material particular. International trade theory since David Ricardo establishes that global welfare is best enhanced when countries concentrate on producing those goods in which they enjoy the highest comparative advantage. Even if we could produce temperate products such as wheat, grapes and apples, the costs might be prohibitive. There are cases where it is cheaper to import than to produce locally.

I also suspect that the new directive aims to take the wind out of the sails of states such as Akwa Ibom and Rivers that have decided to import cattle in order to revitalise their ranching industries. Some local notables have allegedly been bribed to acquiesce to the iniquitous Ruga policy. Blocking access to foreign exchange for food imports may therefore be in furtherance of more sinister objectives than we imagine.

Government also has no business dishing out diktats to the CBN. I know that central bank autonomy is a delegated privilege granted by parliament to ensure it works for the long-term common good rather than short-term electoral-political calculations. Today, I am led to believe that our apex bank has all but lost its autonomy as enshrined in the CBN Act 2007; captured by vested interests in government and the private sector.

Multiple exchange rates exist to cater to the selfish avarice of vultures. We hear these days that they are allegedly forced to pander to all sorts of shadowy people; including hiring staff whose principal qualification is that they are children of high notables while children of nobodies with first class honours are wandering the streets.

I innately dislike breathing down the necks of my former colleagues who often have to operate under difficult conditions. But I humbly submit that a central bank is not worth the name if it is not manned by the best brains that we have. The CBN that some of us knew was a world-class merit-based national institution. Today, the glory has departed. How are the mighty fallen!

Culled from Business day

Nigeria raises hope on Africa free trade deal, commits to signing pact

Nigeria, the largest economy on the continent, was one of the last countries that had not committed to signing the deal and its decision to join the bloc will significantly bolster its clout.

The African Continental Free Trade Agreement (AfCFTA) aims to eliminate tariffs between member states, creating a market of 1.2 billion people with a combined GDP of more than $2.2 trillion.

Apart from Nigeria, only Eritrea and Benin have chosen not to join the zone. President Muhammadu Buhari had expressed concern it could allow neighboring countries to inundate Nigeria with low-priced goods, and confound efforts to encourage moribund local manufacturing and expand farming.

But a panel set up to assess the impact of joining the bloc recommended last week the president “should consider joining.”

“Our position is very simple, we support free trade as long as it is fair and conducted on an equitable basis,” the Twitter feed quoted Buhari as saying.

It added Nigeria would sign onto the deal at an upcoming African Union summit in Niamey, Niger. The agreement with the other signatories came into force on May 30.

Culled from businessday.ng

Latest in Trade and Investment

According to World Bank Group: Globally, investment liberalization and promotion measures continue to predominate over restrictive policies, reflecting a more globally contestable market to attract FDI, especially efficiency-seeking investment.

 

Nigeria: Afreximbank Urges Economic Cooperation to Counter Trade Uncertainties

Nigeria: Afreximbank Urges Economic Cooperation to Counter Trade Uncertainties

Bali, Indonesia — African Export-Import Bank (Afreximbank), has called for greater cooperation among south economies to deal with the uncertainties resulting from the current global trade environment.

President, Afreximbank, Prof. Benedict Oramah, made the call yesterday, on the sidelines of the 2018 International Monetary Fund (IMF), and World Bank Group Annual Meetings, in Bali, Indonesia.

Speaking during a Panel discussion on, “The Growing Importance of South-South Cooperation Amid Trade Tensions and Global Financial Market Volatility,” Oramah said the rising sentiment of anti-globalism and the push back on multilateralism by the some global powers had put Africa at the periphery, with only three per cent global trade.

He noted that many South economies were in the same situation, adding that with the largest and youngest population and the fastest growing middle class, the economies of the South had all the ingredients to drive economic growth.

As a result, he said developing economies must work together to negotiate in concert at the global level.

In this regard, Oramah disclosed that Afreximbank is building partnerships and developing frameworks that will attract South-South investment and trade into Africa, as trade with the South has become dominant in the continent.

According to him, Africa-South trade has reached 56 per cent of the continent’s total trade against 16 per cent in the early 1990s.

In a related development, IMF Managing Director, Ms Christine Lagarde, in her opening remarks at a Trade Conference on: How Global Trade Can Promote Growth for All, also encouraged more cooperation among world economies to improve and expand trade.

“We need to work together to de-escalate the current trade disputes and enter into a constructive discussion.”

She noted that “Today’s generation of policymakers will be measured by their ability to help create a lasting bond of union and friendship, a trade system that works for all.”

Quoting Adam Smith, who once said: “Commerce, which ought naturally to be among nations, as among individuals, a bond of union and friendship, has become the most fertile source of discord and animosity,” Lagarde said: “These lines from

The Wealth of Nations could have been written today–for they remind us that building a better trade system has never been an easy task.”

Additionally, she reiterated the need to join hands to fix and modernize the global trade system, not destroy it .

“This means looking at the distortionary effects of state subsidies, improving the enforcement of intellectual property rights, and taking steps to ensure effective competition–to avoid the excesses of market-dominant positions.

“We need to implement domestic policies to ensure that global trade is more effective in delivering for people–all people. We know that trade has helped transform our world–by boosting productivity, spreading new technologies.”

Earlier at the panel discussion organised by the Indonesia Eximbank, the Vice Minister, Finance, Indonesia, Mardiasmo Wamenkeu, said the current isolationist rhetoric was not helpful and had a negative effect on global economic outlook.

He argued that the current economic challenges could be addressing through further collaboration among southern countries through trade agreements.

Source; The Guardian

 

Intra-Africa Trade: West Africa to interlink payment system

Mrs Ngozi Egbuna, Director-General, West African Monetary Institute (WAMI) says West African countries have joined forces to interlink their payment system to make trading between African countries easier.

Egbuna disclosed this on Sunday in an interview with the News Agency of Nigeria (NAN) on the sideline of the IMF/WB Annual Meetings in Bali.

She revealed that with funding from the African Export-Import Bank, the Institute was currently working to link the payment system of Gambia, Guinea, Ghana, Liberia and Nigeria.

She said that once the linkage was done, West African States would be closer to achieving their dream of migrating to a single currency, known as the ECO.

Egbuna said that the linkage was the second phase of the Institute’s payment systems infrastructure project in the region.

She recalled that between 2012 and 2016, the African Development Bank funded the creation of payment systems in Sierra Leone, Guinea, Liberia and Gambia, who at the time, did not have.

“The West Africa Monitoring Zone which is made out of six countries; The Gambia, Guinea, Ghana, Liberia, Nigeria and Sierra Leone will be used to pilot the Payment Systems Infrastructure.

“Interlinking our payment systems will make it possible for us to quote and trade in our local currencies.

”So if you have Naira and you want to buy in Guinea or any of these countries you can buy and settle in Naira.

“We are working in conjunction with the Central Banks as co-settlement and payment institutions, not that Central Banks will bring their money, but they will only oversee the trading platforms,” she said.

Egbuna said that the success of the West African linked payment system would also convince countries that were still cautions of the single currency plan, of its importance in boosting intra-trade.

The Director-General gave reasons why for so many years, West Africa was still unable to have a convergence of its Monetary indices, which is a core criteria for the establishment of a single currency in the region.

“Since the convergence criteria was set up, each of our countries sometimes meet or miss some, but we have not been able to meet them consistently on a sustainable basis.

”But before the global financial crisis, we met them and then the crisis came and the second round effect of it which is the fall in commodity prices hit all of us.

“As we were about to get settled, the Ebola hit almost all the countries except for Ghana and for about three years the world was shut out of all our countries.

“Nothing was moving and there was no economic activity. As if that wasn’t enough, in August 2017 we had the flooding in Sierra Leone.

“So you see a series of shocks have made it impossible to meet those criteria.”

On the fiscal side, she said that the habit of over spending during election was having negative impact on the West African states.

“On the fiscal side, we have not been able to meet it on a sustainable basis.

“This is mainly because most of our countries over-spend when on election.

“We just had an election in Sierra Leone and Liberia and the Nigerian election is on the way.”

NAN reports that WAMI is an institution of the West African monetary zone set up to ensure the economic and financial integration of the zone.

NAN recalls that West Africa currently have the goal of creating a common currency for the region by year 2020.

For the currency to be implemented, 10 convergence criteria was set out by WAMI must be met.

The four primary criteria to be achieved by each member country include single-digit inflation rate at the end of each year and fiscal deficit of not more than three per cent of the GDP.

Also a central bank deficit-financing of not more than 10 per cent of the previous year’s tax revenues and gross external reserves that could cover a country’s import bill for a minimum of three months were proposed.

There are also six secondary criteria which had to be achieved by each member country.

They include the prohibition of new domestic default payments and liquidation of existing ones, tax revenue should be equal to or greater than 20 per cent of the GDP.

Also, wage bill to tax revenue should be equal to or less than 35 per cent, public investment to tax revenue equal to or greater than 20 per cent and a stable real exchange rate as well as a positive real interest rate. (NAN)

CULLED FROM NAN

AFRICA: SEIZE THE OPPORTUNITY OFFERED BY AFRICA’S FREE TRADE AREA

The United Nations Industrial Development Organisation convened a high level event in New York on the margins of the 73rd session of the United Nations General Assembly. The event aimed to further foster the implementation of the Third Industrial Development Decade for Africa (IDDA III). Below is a message from Mr Li Yong, the Director General of UNIDO.

Since the turn of the millennium, Africa has experienced a steady and unprecedented economic growth. However, poverty continues for people across the continent, especially in the sub-Saharan region. Unemployment and inequality have remained high. The rural population and the urban poor, women and youth have not benefited from economic growth.

African policymakers realise that, for the benefits of growth to be shared by all, there needs to be a structural transformation of the economy. Specifically, there is an acknowledgement that its composition should change, with increased shares of manufacturing and agro-related industry in national investment, output, and trade.

Manufacturing, thanks to its multiplier effect on other sectors of the economy, has always been one of the most important drivers of economic development and structural change, especially in developing countries. Manufacturing is an “engine of growth” that enhances higher levels of productivity and greater technical change, thus creating more jobs with higher wages for both women and men.

Recognising this, the United Nations has proclaimed the period 2016-2025 as the Third Industrial Development Decade for Africa (IDDA III) in order to increase global awareness and encourage partnerships to achieve inclusive and sustainable industrialization.

Today, Africa has exceptional opportunities for industrialisation. In the next few decades, Africa will become the youngest and most populous continent in the world with a working age population expected to grow by 450 million people or close to 70 per cent of the total, by 2035.

With a rapidly growing population, and one of the world’s highest rates of urbanisation, the middle class is on the rise too. This will drive consumption of consumer goods, creating a market worth $250 billion, set to grow at an annual rate of 5 per cent over the next eight years.

Industrialisation, diversification and job creation in Africa, however, cannot happen without continental economic integration. The recent signing of the historic agreement for an African Continental Free Trade Area (AfCFTA) by 49 out of 55 countries, creates an opportunity for inclusive and sustainable economic development, moving away from structural stagnation and commodity-based economics. The AfCFTA agreement will create the world’s largest single, integrated market for goods and services, and a customs union that will enable free movement of capital and business travelers in Africa.

This will provide great business opportunities for trading enterprises, businesses and consumers, unlocking trade and manufacturing potential and further enhancing industrialisation in Africa. With the AfCFTA agreement, exports of processed or intermediate goods will increase rapidly, further opening the way to Africa’s economic transformation to dynamically-diversified economies and globally competitive industrial production locations.

Higher trade among African countries will also strengthen African regional value chains, making it easier for local small and medium size enterprises, which account for about 80 per cent of Africa’s businesses, to build competitiveness, supply inputs to larger regional companies, and participate in and upgrade to global value chains.

This will give unprecedented opportunities to exploit the full agri-business potential of the continent. Strengthening the continent’s agro-industries can generate high social and economic returns, create jobs in rural areas and for young women and men, as well as responding to the urgent need to ensure food security and poverty reduction.

By taking bold actions in advancing the agenda of the AfCFTA, using it as one of the best means of promoting industrialization, African countries are well-positioned to build an Africa that can become a strong link in today’s interdependent global economy. Structural transformation, however, is never automatic. Political goodwill and commitments are a first important steps, but a multi-pronged, action-based approach with partnerships at the heart, along with concrete industrial policies, is needed for this to become a reality.

That is why UNIDO has developed an innovative country-owned, multi-stakeholder partnership model to provide governments with a platform to bring together various stakeholders, including development finance institutions and the private sector, to mobilize large-scale resources, accelerate industrialization and achieve a greater development impact.

Using this Programme for Country Partnership (PCP) approach, and helping governments to identify priority sectors based on prospects for job creation, strong links to the agricultural sector, high export potential and capacity to attract investment, UNIDO has already started assisting Ethiopia, Senegal, Morocco and other countries in Asia and Latin America in achieving their export goals and enabling the manufacturing sector to compete on the increasingly globalized market.

Now more than ever, such innovative schemes and mechanisms for enabling partnership building and resource mobilization for sustainable industrial development are needed to address the urgent need for structural transformation in Africa and seize the opportunities offered by the AfCFTA.

My Yong is the Director General, United Nations Industrial Development Organisation.

Culled From Monitor 

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