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CBN’s Import Ban and Nigeria’s Looming Maize Crisis

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Ikechukwu Kelikume maize imports

By Ikechukwu Kelikume

Nigeria, like many other African countries that rely on the agricultural sector for their food sustenance and employment generation, is experiencing unfolding events in the country since the World Health Organization (WHO) declared the COVID-19 outbreak a global pandemic on February 28, 2020.

Following the shutdown directive by the federal government and the restriction of movement across the states in the country, agricultural production, processing and distribution have been severely affected. One such area which has been adversely affected is the production and processing of maize.

Farmers across the maize value chain, especially those operating in the poultry segment, are experiencing a tough time in finding maize to buy.

Maize, which constitutes over 50 per cent of poultry feed, is currently very scarce and prices are rising every day. The scarcity of maize and the continuous rise in its cost has dire consequences, on not only the poultry farmers but on all associated sectors that are linked directly or indirectly to the poultry value chain.

An earlier report published on June 29, 2020, in Agribusiness Newsletter, narrated the plight of poultry farmers in Nigeria.

According to the report, Chief Alfred Mrakpor, the Delta State Chairman of Poultry Association of Nigeria, summed up the plight of poultry farmers, stating emphatically that, “the rising cost of maize is threatening the livelihood of small businesses in Nigeria.

“It is not only poultry farmers’ investment that is threatened but also other players in the value chain, such as feed producers, chicken and egg vendors, processors, grain traders’, veterinary doctors and other related sectors.”

The Central Bank of Nigeria (CBN) on July 13, 2020, directed all authorized dealers to discontinue the processing of Form M for the importation of maize/corn with immediate effect.

This directive, according to the apex bank, is done in continuation with its effort to increase local production in the country, stimulate rapid recovery, safeguard rural livelihood and grow jobs.

The implementation of the CBN directives of withdrawal of Form M for maize importation puts immediate and significant pressure on the sector already burdened with the scarcity of maize-a fall out of the adverse effects of the COVID-19 pandemic.

Maize is considered the second most consumed cereal in the country next only to cassava. The importance of maize can be seen directly in the total area currently under cultivation in Nigeria.

According to FAOSTAT, 2018 report, maize is the second most cultivated crop in Nigeria with an estimated harvested area of 4.8 million hectares next only to cassava that has a total area cultivated of 6.7 million hectares.

Current Concern for Maize farmers, Poultry Operators and Feed Millers in Nigeria

At the beginning of the farming season, maize sold for between N70,000 and N80,000 per ton. Its current selling price is between N165,000 per ton and N175,000 per ton, which is now considered very high. The projection is that the price will rise further to about N200,000 per ton in the coming months.

The current hike in the amount of maize is the result of its scarcity, due, on the one hand, to the border closure across the country and on the other hand to low maize/corn productivity in the country. Added to the unknown factors that have created a shortfall in maize production are the unpredictable weather conditions and the adverse effect of the COVID-19 pandemic.

The disruption in production, distribution, transportation, marketing and free movement of farmers and labour coincided with the maize planting season in both the northern and southern part of Nigeria.

These notable changes imply that Nigeria cannot meet over 12 million metric tons of maize needed to supply the feed millers, the poultry farmers and to meet the household demand.

Figures from FAOStat (2018) put Nigeria’s maize yearly production in 2019 at 11 million metric tons while the annual maize consumption estimate is 11.4 million metric tons, creating a gap of over 400,000 metric tons of maize which is made up for by importation.

The projected demand for 2020 is that the country will need an additional 100,000 metric tons of imported maize to augment local production.

With the disruption of business activities and the restriction of movement across the country in the first quarter of 2020, maize cultivation, processing and distribution were adversely affected.

Short-term Measure to Curb Maize Shortages

There is no doubt that the CBN policy of Agric, Small and Medium enterprise scheme and the Anchor Borrowers Programme (ABP) have been very successful in opening up the agricultural sector in the country. Both policies have worked effectively in closing the productivity gap in the farming sector.

But the current decision of the apex bank to discontinue the processing of Form M for the importation of maize/corn will roll back the gains of the intervention in the sector.

The current reality is that maize prices will continue to spike in the coming months, as evident in the data published by the National Bureau of Statistics (2020). The spike in the price of maize reflects its current scarcity, as corn grain reserves stored from last season has been fully depleted, leading to a shortage of the product.

The situation spells doom for poultry farmers across the country who are beginning to cut down on production because of the high cost of feed and imported medication for the birds.

A negative spillover effect of the high cost of feed is the scarcity of eggs and a consequent rise in the price of eggs across the country. The implications of the current challenges in the maize value chain are that the gains of employing more people in the agricultural sector will be rolled back in the coming months.

As it stands, there is no alternative for the poultry farmers as the poultry sector will face a catastrophic shortage of feeds, a critical input in their business. This situation will render tens of thousands of them unemployed and undo all the gains made by this sector in the past five years.

Thousands of poultry businesses will shut down in the face of high operating costs, leaving business owners and their employees without a means of livelihood.

As a matter of necessity, the CBN’s decision to discontinue the processing of Form M for the importation of maize/corn must be revisited. It is expedient at this time for the central bank to allow importers of maize to import it through the CBN foreign exchange window, to close the gap in maize shortage while preparing for phased discontinuation of maize importation in the country.

The total shortfall is just around 100,000 metric tons, which translates to an import bill of less than $20 million. This cost is a negligible import burden even in the current tight FX situation and a small price to pay to salvage the poultry sector.

The time to act is now. The government must put its mechanism in place to import maize into the country as a temporary measure to plug the pending scarcity that is imminent in the last quarter of the year 2020. Nigeria has a high production potential for maize. Notwithstanding, the current challenge is that the production and supply bottleneck in the sector have first to be checkmated for any meaningful import restriction measure to be effective.

Dr Ikechukwu Kelikume is the Head of Department of Finance, Accounting and Economics at the Lagos Business School. He also is the programme director of LBS agribusiness programme: ikelikume@lbs.edu.ng

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X-Raying Oragwu’s Suggestions on Nigeria’s Science and Technology Dilemma

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map of nigeria

By Jerome-Mario Utomi

As a response to a recent intervention entitled Historical Perspectives on Nigeria’s Tertiary Education which among other things chronicled how Nigeria’s tertiary education originally got into trouble and with solutions on ways out of the debacle, I got several reactions/emails from esteemed readers.

Indeed, all contributions were well appreciated, but two qualified as outstanding.

The first queried; why can’t we as people forget the past and face the present/future? Why are you always in the habit of making reference to history?

In my response, I started by quoting EH Carr’s observation that history is an unending dialogue between the present and the past that assists the anxious inquirer in improving the present and the future based on a clearer understanding of the mistakes and achievements of the past. I submitted that it is only a society that has lost belief in its capacity to progress in the future will quickly cease to concern itself with the progress (or retrogress) in the past.

While the above query added a sidelight to the conversation, the second, though a mixture of private and public concerns was not only thought-provoking but strategic as it opened a vista that stemmed from new intervention.

It was an email from Professor Felix N.C Oragwu, Former Head of R&D Planning Division/Coordinator of Technological Services of the Technological Aspects of the Industrial War Machine that operated in the defunct State of Biafra, 1967-1970, Director in Charge of Industrial Research and Technology Innovation in NSTDA, Federal Government Cabinet Office, Lagos, 1977-1979.

It reads; Hello,/Dear Jerome-Mario, Thank you and congratulations on your masterpiece on Historical Perspectives on Nigeria’s Tertiary Education now characterised by Certificate Acquisition without the relevant knowledge needed for its use/application in national development. This is well illustrated by the over 120 existing universities each with Faculties of Science, Engineering and Technology, and we cannot make a pin or produce/manufacture any technology/globally competitive industrial goods in our economy, both for domestic use and for export to the global market for foreign revenue. This is the consequence of our poverty, insecurity and criminality now ravaging Nigeria and nobody is asking questions. I hope Nigeria’s leadership, in particular those in politics and in government, will find time to read your wonderful writings and internalise their message. Congratulations again and my best wishes. Felix Oragwu, FSAN.

He did one more thing.

In his real zest to establish how Nigeria’s economy can move away from near-total dependence on imported technologies and imported industrial goods, to become a technology exporting nation, as the status of the economy of any nation is a function of the agricultural/mineral commodity endowment and the endogenous domestic capacity to produce modern technologies and industrial goods in the economy, he forwarded some materials to me out of which, his address titled: The Challenges of Science and Technology in Nigeria’s Economy: The Way Forward, delivered in March 2018 at Eagle Square, Abuja, the nation’s capital, during an event organised by the National Agency for Science and Engineering Infrastructure (NASENI), has emerged the focal point of this intervention.

At this point, critics may ask; what is spectacular about a keynote address? Haven’t we seen in the past more superlatively written, and creatively delivered addresses?

Indeed, these questions are all deserving but there are, however, many reasons that characterise the address as a vital road map. Aside from the public good consideration, others include the fact that it laid out how technological activities could be used as a key instrument for realizing Nigeria’s proposed Economic Recovery and Growth Plan (ERGP) points out how the nation has paid little attention to history, and lip service to science and technology, failed to learn from the highly successful technological innovations experience that took place in the defunct state of Biafra, 1967-1970: It more than anything else visibly spread out challenges posed by the inherited Lord Fredrick Lugard’s policy for S&T, Industrial/Economic Development in Nigeria.

Against this backdrop, as a demand by the intellectual property law which creates propriety rights over intangible assets, before further dissection of the address, this writer directs every credit to Oragwu as the greater paragraphs/plot of this writing is chiefly from the aforementioned keynote address.

However, with this alighted, it needs to be underlined also that sharing this priced information is predicated on informing those in the position of authority to such an existing road map which is part of my obligation as a citizen.

Beginning with the historical perspective of what set the groundwork for the present predicament science and technology suffers in the country, the keynote address pointed out how Lord Fredrick Lugard, first Nigeria’s Governor-General, 1914-1918, in his book titled The Dual Mandate of Europe in Tropical Africa, 4th Edition, London, 1929, enunciated the S&T policy for economic development in Nigeria on what he called a mutual agreement said to be existing between Britain and the colonised Nigeria.

In this so-called “agreement”, Nigeria is to export or supply Britain with primary agricultural commodities such as cocoa, palm oil/palm kernel, rubber, cotton, livestock hides and skins which Britain required for her once-famous textile industry and her leather and leather products industry, and to supply Britain with unprocessed natural minerals (solid, liquid and gaseous), which Nigeria has in abundance and which are of interest to Britain for the production and manufacture of technologies and industrial goods in the British economy.

Britain on her part is to “provide or export at costs to Nigeria, all the modern technologies and industrial goods that Nigeria needs to sustain her own economic growth and development”. Lord Lugard further stated in his book that that was the prime objective of the British colonization of Nigeria.

‘With this dual policy, a balance of trade between Nigeria and Britain was established. This policy means in effect that Nigeria should not develop any domestic capacity to produce and manufacture modern technologies and globally competitive industrial goods in Nigeria’s economy during the British colonial rule as that could undermine or compromise the mutual agreement.

This is when the rain of underdevelopment in science and technology began to beat Nigeria, apologies to Chinua Achebe, Nigeria’s internationally acknowledged novelist of Things Fall Apart.

This Lugard’s policy, he added, is recently alluded to in an article discussing Infrastructure and Africa’s Development and Prosperity: The Imperative of Public-Private Partnership (PPP), held in Abuja, Nigeria, on May 15-16, 2017, by one Engr. Chidi K. C. Ijuwa, of the Presidency, Abuja, Nigeria, made the following interesting observations, namely, (a) “the price of cocoa is declining in the world market but never the price of chocolates, (b) “the price of cotton may fall but never the price of clothes and garments, and (c) “the coffee farmers may face declining prices in the world market, but the coffee grinders and Starbucks will smile all the way to the banks”.

To make assurance doubly sure that the dual mandate was fully implemented, Britain, he noted, established only one University College, at Ibadan in 1948, coupled it with the Senate of the University of London. The University College was not allowed to offer courses in Engineering, Technology and professional courses but allowed full complement of courses in Latin and Greek (Classics), English History, Zoology, Botany, Geography, Organic Chemistry (initially no Physical Chemistry), Classical Physics, Agricultural Commodity Sciences, Mathematics (of 19th Century, G. Hardy of Cambridge University School of Mathematics who swore never to be alive to see his Mathematics applied), and Divinity respectively from 1948-1960.

Britain also made sure that during the British colonial rule, there were no Polytechnics, no Colleges of Technology and no Technical Colleges to train and develop skilled technical and professional manpower for technology and industrial goods production in Nigeria’s economy as that may breach the dual mandate.

There were also no Research and Development (R&D) institutions for technology production and industrial goods manufacture in Nigeria’s colonial economy. Has Nigeria’s leadership elite ever asked questions on these developments since 1960?

However, primary Agricultural Scientific Research Institutions, the address submitted were established for British West Africa including Nigeria such as West Africa Cocoa Research Institute with headquarters in Accra, Ghana, West Africa Oil Palm Research Institute with headquarters in Benin Nigeria, West Africa Trypanosomiasis Research Institute to address tsetse fly menace against cattle livestock, the source of raw hides and skins for leather and leather products industries in Britain,

Earlier in 1899, Britain established an Agricultural Experimental Scientific Research Station at Moor Station in Ibadan to experiment on primary cotton production in Southern Nigeria. Kano in Northern Nigeria produced abundant primary cotton but there were no roads and no railways then for use in transporting the raw cotton produce to Lagos seaport for onward shipment to Britain and Europe.

To be continued.

Utomi Jerome-Mario is the Programme Coordinator (Media and Policy), Social and Economic Justice Advocacy (SEJA), Lagos. He could be reached via jeromeutomi@yahoo.com/08032725374.

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Resilience of Labour Markets During COVID-19

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Labour Markets

By Gregory Kronsten

It is said by some analysts that COVID-19 is responsible for irreversible changes in our economies, including patterns of employment.

It was, therefore, a revelation to read the latest national income dynamics study-coronavirus rapid mobile survey (NIDS-CRAM) from South Africa.

Based upon a sample of 10,000 individuals, wave 3 (the most recent published data) shows that active employment in the country in October was just 0.15 per cent lower than the level in pre-COVID February.

The recovery has been strong. In April, when the domestic lockdown was at its height, employment was 40 per cent lower than in February and in June, when most restrictions had been eased, it was still 20 per cent down.

Additionally, the data suggests that the recovery has been in all forms of employment, and not just part-time posts created by employers nervous about future economic prospects.

The three academic authors of the section of the surveys covering the labour market, two based in the US and one in the UK, noted similar trends in other emerging markets (EMs): from the low point in April, the recovery was well underway by June in Brazil and Mexico and by August in India and Ghana.

Closer to home, we refer to COVID-19 impact monitoring, a series of publications by the National Bureau of Statistics (NBS) in partnership with the World Bank.

The narrative is similar to the sixth and latest instalment of this smaller survey, which covers 1,950 households: 87 per cent of respondents were employed in October, compared with 86 per cent at the pre-COVID base (mid-March).

Reflecting the structure of the economy, households are divided between urban and rural. Employment was a little behind March for the former, a little ahead for the latter.

A clear trend is apparent across selected emerging markets. There is a familiar lag in the release of data from academic sources, research foundations and official statistical bodies. Job losses may have picked up again in South Africa due to the resurgence of COVID-19 and the reimposition of some restrictions in late 2020/early 2021. This does not detract from our broader argument that these economies display resilience in employment terms once controls are eased.

We are not looking for parallels with advanced economies because of a point we have often made in these columns: that they have fiscal and other resources on a scale of which emerging market governments can only dream.

You can close down the economy and pay your employed citizens not to work through a furlough scheme in an advanced economy. You can then reopen the economy and subsidize meals out for the family. In EMs your choices are far more limited.

A core tool of the South African government, for example, is its social relief of distress grant, which is received by 35 per cent of all households.

Three other conclusions from the three waves of NIDS-CRAM are worth highlighting.

First, the employment trends are consistent with monthly production data from Statistics South Africa, the local counterpart of the NBS. This is true of mining, manufacturing and retail but not, for obvious reasons, of tourism.

Second and tentatively, there has been an unusual increase in jobs in sales and services.

Thirdly and again cautiously, earnings may have risen slightly between February and October.

If we attempt to read across to Nigeria, we do not have the data for the first two conclusions while the fourth instalment of COVID-19 impact monitoring noted that two-thirds of households surveyed reported a fall in earnings.

Gregory Kronsten is the Head of Macroeconomic and Fixed Income Research at FBNQuest

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Post-UTME Crisis and UNILAG’s New Found Image

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UNILAG Post-UTME Crisis

By Jerome-Mario Utomi

If there is any occurrence in recent time that accurately supports the correctness of the time-honoured belief that ‘every adversity comes with an equal opportunity, it is the recent crisis that hit the University of Lagos occasioned by the inability of some candidates that wrote from their various locations, as introduced by the management during the just concluded University’s Unified Tertiary Matriculation Examination (UTME), conducted in the school from Monday, February 15 to Tuesday, February 23, 2021.

To help those that are unaware of what transpired in the past week, a while ago, the management of UNILAG came up with a cloud-based computer testing solution for the conduct of the 2020/2021 post UTME.

An initiative globally perceived as a versatile, easy to use tool for conducting online computer-based examinations and assessments that allow candidates to write the test from any location of their choice. This elicited happiness and viewed by many as not just innovative leadership but a total departure from the old other.

Trouble, however, started when mid-way into the exercise, an appreciable number of candidates’ encountered varying level/degree of challenges. Problem areas identified include but not limited to; the inability of candidates to log into the school portals, systems non-responsiveness, endless loading throughout the entire examination time, etc.

Expectedly, they (candidates) were particularly concerned about how such hitches will negatively affect their 2020/2021 admission opportunities to the school. This brought about heated debates among stakeholders, tempers and innumerable complaints from parents flowed freely.

Within this milieu, the university management, to the astonishment of candidates and their parents, during a press briefing, announced to the watching world that the school successfully captured about 90 per cent of the candidates and went ahead to give the school a pass mark.

Both parents and candidate wondered where and how the school got the statistics, figure and courage!

But then, the most amazing thing that signalled a new order happened after that announcement. The school management did something that is not only extraordinary, different and historic but characterized as alien to public institutions in Nigeria.

From the ashes of confusion and denials, the school quietly rescheduled and organized examinations for the teaming candidates that experienced the reported hitches.

It was indeed a turning point!

Save for the belief in some quarters that what the school management overtly denied, they covertly admitted, there is in the opinion of this piece, torrent of reasons to celebrate Professor Oluwatoyin Ogundipe’s led administration for this new order.

By this act, the University of Lagos has proved to be both responsible and responsive. And demonstrated an institution that is neither willing nor ready to allow any issue embarrass nor ridicule the enviable academic excellence attained in the past decades of its existence.

In reputation terms, there are more reasons to applaud the institution but one that easily comes to mind is that globally, a public institution is viewed as an establishment conducted with the approval, and from the funds of the public. And whenever such an institution ceases to have public support; it forfeits its right to exist.

But until now, what existed in this part of the world was a direct opposite.

Institutions maintained on permanent public funds in Nigeria, are reputed for, and often found to ignore public opinions, and are frequently responsible for acts contrary to it. They mastered how to ignore criticisms and advice from experts even the ones that are beneficial and the centres on how a society should develop. Even when they claim to listen, they do so without being attentive.

Now, let’s examine the end result of UNILAG’s prompt response to the public’s outcry on her image.

It has been reasonably argued that a leader/organization’s image is an amalgam of a variety of factors, and followers must at intervals evaluate these perceived factors in order to dictate if they are in positive or negative lights. Particularly, as the image is capable of saying much more about a leader than any of his long speeches and verbal declarations. Also very unique is that once established, the image becomes not just the leader’s picture but remains highly durable.

Indeed, by his empathetic behaviour in managing the post-UTME crisis, Professor Ogundipe has developed a spectacular identity for himself that is worthy of emulation. In the same vein, the institution’s responsible and responsive attitude, similar to complex but conventional business environments, has created a connection or ‘hyper ‘relationship between the school and students; Portrayed itself as a good corporate citizen while increasing its corporate visibility and reputation in the estimation of the right-thinking students/parents.

The media also need to be applauded in this whole scenario for reporting the development to the world.

As the fourth estate of the realm, they have again affirmed that they are ‘to watch and not to be watched over. They are to watch over crimes, injustices, malpractices, and every other act that is deemed unfair and unlawful. They have proved to the world that professionally, they are competent to carry out their duties…. They are not the kinds of dogs with ropes tied round about their necks. The fact that they are watchdogs means they know what to do, where they are going, and how to discharge their duties as when due’.

However, even as we celebrate this feat, there are in the opinion of this peace, more work to be done and more reforms to be made. To truly and thoroughly make the experience of the past weeks a dynamic and cohesive way of earning a higher height of excellence, there are however ingrained lessons to be learned from the exercise that we must not allow go with the political winds.

Most fundamental is that it takes a prolonged effort to administer an institution well and change the backward habits of the people. UNILAG and of course other institutions of higher learning in Nigeria must learn how to inculcate and reinforce positive internet-related exposures, social and cultural attitudes among their students while creating a mood in which students become keen to acquire skills and disciplines of developed nations.

Above all, as noted in the previous intervention, another urgent reason why the school authority and of course the Federal Ministry of Education must reassess this process is the threat that keeping brilliant children on the waiting list for university admission for too long could pose to the nation.

Idleness could make them take to the street. As we know, the streets are known for breeding all sorts of criminals and other social misfits who constitute the real threat such as armed robbers, thugs, drug abusers, drunkards, prostitutes and all other social ills that give a bad name to the society.

Jerome-Mario Utomi is the Programme Coordinator (Media and Policy), Social and Economic Justice Advocacy (SEJA), Lagos. He could be reached via jeromeutomi@yahoo.com/08032725374

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Nano, Micro, Small, and Medium-sized Businesses in Lagos State, Way Forward

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Timi Olubiyi Businesses in Lagos

By Timi Olubiyi, PhD

Small and Medium-sized Enterprises (SMEs) are generally regarded as the engine of economic growth in any developing economies.

Similarly, a large concentration of SMEs, including micro and nano businesses, are easily noticeable in Lagos State, the economic hub of Nigeria.

The state enjoys a high presence of SMEs, micro and nano businesses, more than any state in Nigeria. Why is that? The simple metric to this is that Lagos State has a population size of about 15 million, according to the United Nations (UN) projections and it appears like a country within a country considering the strength of economic activity and populace.

In fact, without a doubt, Lagos State has a population estimate that is higher than some West African countries namely Guinea (13,132,795), Benin (12,123,200), Togo (8,278,724), and Sierra Leone (7,976,983).

Even the population of the state is higher than that of some developed countries such as Finland (5,540,720), Belgium (11,589,623), Sweden (10,099,265), Denmark (5,792,202), and Ireland (4,937,786).

Supportably, the population is even higher than the combined population of Liberia (5,057,681), Mauritania (4,649,658), Gambia (2,416,668), Guinea-Bissau (1,968,001) as of February 27, 2021.

However, the painful reality is that over 60% of the residents of Lagos State are poor and live in various high density and informal settlements scattered across the state.

These residents lack proper sanitation, power, and other basic services, and most of them heck a living from small businesses which includes nano and micro-businesses most importantly.

A visible reference usually includes the operators of kiosks, commercial tricycles, motorcycles and many other informal business operations in the state.

The estimated figure of micro-businesses in Lagos State is 3,224,324 and to add to this, over 11,663 SMEs operate in the state, according to a recent statement from the Lagos Ministry for Commerce, Industry, and Cooperatives.

In my opinion, this data is underreported and does not reflect the large informal economy that exists in the state particularly the nano businesses.

From reliable data, the informal economy employs about 5.5 million people in Lagos State if not more. So, a reliable database is necessary for adequate planning in the State.

The small business economic activities in Lagos State can contribute largely to the growth of the non-oil sector, employment generation, and the creation of sustainable entrepreneurship. These can largely be driven by businesses in the formal and informal sector in the state.

Arguably, small businesses represent over 90 per cent of private businesses in the state and contribute to more than 50 per cent of employment in the state. Yet, the state government has not duly recognised the significance of this sector in the economic development of the state.

For instance, the popular computer village in Ikeja, Ladipo spare part market in Oshodi and Balogun market in Lagos Island all consist of clusters of mostly micro-businesses with huge economic engagements but the government of Lagos state is yet to facilitate their formality and capacity building with the required policy and incentive considerations.

The novel Coronavirus (COVID-19) and the harsh economic climate currently with us have made many of these businesses struggle and some have shut down due to these challenges which include perennial issues; from infrastructure deficits (power, road, technology, and so on) to inconsistent government policies, security problems, multiple taxations, regulatory burdens, stiff competition from large companies, the entrepreneurial attitude of operators, huge financial and funding problems, lack of meaningful structure, longevity and succession plan among others.

SME operators and entrepreneurs strive with different strategies and tactics to absolve many of these challenges and shocks to make any meaningful balance with little or no external support.

However, the government needs to realise and recognise that small businesses are crucial to job creation, economic diversification, innovation, poverty reduction, wealth creation, and income redistribution in their policy-making activities. If this sector is well harnessed in Lagos State it can be a huge catalyst in transforming the State economically.

The vivid truth is that a well-functioning SME sector would add more value to the economic fortunes of the state, sustain livelihoods, reduce poverty by creating more job opportunities in the economy than any other sector.

Therefore, proper monitoring and evaluation of this sector are crucial for the economic development of Lagos State. When businesses survive, there will be a reduction in market failures and the more businesses are without survival threats the government can equally benefit from their growth and development. It can increase tax receipts and accelerate the growth of industrialisation in the state.

Therefore, the Lagos State government should focus more on policies and programs to widen the SMEs’ involvement in the formal sector particularly the micro and nano businesses.

The state government through the appropriate Ministry can implement policies that will enhance ease of doing business in the state to attract operators from the huge unregulated informal sector to the formal sector.

The informal sector in Nigeria refers to economic activities in all sectors of the economy that are operated outside the purview of government regulation. Therefore, policies to attract business formality should be considered and formulated, and also the capacity and sustainability of these SMEs, micro and nano businesses should be enhanced because if all these are set in place it will encourage the development of the formal sector of the SME sector in the state.

That said, key stakeholders such as the Small and Medium Enterprise Development Agency (SMEDAN), Nigerian Association of Small & Medium Enterprises. (NASME), Association of Small Business Owners of Nigeria (ASBON), Nigerian Association of Chambers of Commerce, Industry, Mines and Agriculture (NACCIMA), Association of Micro Entrepreneurs of Nigeria (AMEN), the Lagos Chamber of Commerce and Industry (LCCI), Manufacturer Association of Nigeria (MAN), the financial technology (FINTECH) associations, and groups in the Organised Private Sector (OPS) advocate for ways government can create innovative measures to improve business formality, enable secured environment, improve on rule of law, encourage public-private initiatives, invest in infrastructure, and consider policies as the needed.

Corruption has also remained a very serious problem that needs to be genuinely addressed because it can threaten any development policies and programs of the state.

The support of these teeming small, micro, and nano businesses is also imperative and strategies to sustain their business operations should be key in the decision-making process of the government of Lagos State.

The National Bureau of Statistics (NBS) suggested that many of the Nigerian youth are unemployed, majority of them can be meaningfully absorbed into this sector through self-employment, startups, and financial technology (FINTECH) if the SME sector is made viable with an adequate enabling environment.

In conclusion, the Lagos State government should get more involved in the growth, development, and sustainability of SMEs within the state.

More so, the state government needs to ensure the development and patronage of locally produced goods and content while putting in place adequate infrastructures.

Besides corroboration with experts and consultants in the provision of external advice to government and these teeming small businesses on a range of topics such as strategy, having a business and organisational structure for business continuity, financial literacy, technology, and role of innovation to increase their output is equally significant.

Concisely, going forward policies and programs of the government in the State should be rooted in deep rule of law, accountability, creation of a database on small business and uphold strict fiscal discipline. Good luck!

How may you obtain advice or further information on the article?

Dr Timi Olubiyi is an Entrepreneurship & Business Management expert with a PhD in Business Administration from Babcock University Nigeria. He is also a prolific investment coach, seasoned scholar, Chartered Member of the Chartered Institute for Securities and Investment (CISI), and Securities and Exchange Commission (SEC) registered capital market operator. He can be reached on the Twitter handle @drtimiolubiyi and via email: drtimiolubiyi@gmail.com, for any questions, reactions, and comments

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African Leaders Must Prioritise Climate Risks—Verkooijen

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Professor Patrick Verkooijen Climate Risks

By Kester Kenn Klomegah

In this insightful and wide-ranging interview, Professor Patrick Verkooijen, Chief Executive Officer of Global Center on Adaptation discusses the organization’s establishment, its main objectives, challenges and plans for the future.

The Global Center on Adaptation in Africa (GCA Africa), based at the African Development Bank (AfDB), has launched the Africa Adaptation Acceleration Program to mobilize $25 billion to scale up transformative actions on climate adaptation. It hopes to mobilize funds and bridge the financing gap for climate adaptation across Africa. Here are the interview excerpts:

What does the setting up of the Global Center on Adaptation mean for Africa?

Africa is on the frontline of our climate emergency. Five out of the 10 world’s most climate-vulnerable countries are in Africa. Contributing a meagre 5 per cent of global greenhouse gas emissions, Africa is more victim than a contributor to climate change, with the bulk of its emissions deriving from deforestation and poor land-use practices. Climate change is already negatively affecting the continent’s progress towards the Sustainable Development Goals.

Its impacts are showing up in extreme weather events such as floods, droughts and heatwaves affecting most of the continent with severe economic consequences. Hurricanes Idai and Kenneth in 2018 that hit Mozambique, Zimbabwe and Malawi affected over 3 million people, led to the death of over a thousand people and damaged infrastructure worth about $2 billion.

Compounding the already enormous climate challenges, COVID-19 has ushered in an era of multiple, intersecting systemic shocks, and one of its casualties has been our capacity to adapt and respond to escalating climate risks.

Investment in climate adaptation fell in 2020, even as more than 50 million people were affected. There is no doubt the adaptation challenge for Africa is extraordinary. For us, although the adaptation challenge is a global agenda, our priority is Africa.

We must make up for lost ground and lost time by accelerating action on climate adaption and resilience. Climate change did not stop because of COVID-19, and neither should the urgent task of preparing humanity to live with the multiple effects of a warming planet. If the virus is a shared global challenge so too should be the need to build resilience against future shocks.

In September last year, in the midst of the pandemic, we virtually launched our Africa office hosted by the African Development Bank in Abidjan, Côte d’Ivoire. Many African Heads of State and Government participated – they understand how vital accelerated adaptation action is because they are living with the impacts of climate change every day. Our rationale is that it doesn’t make sense to have an Africa office in isolation. We also have offices in Beijing and Dhaka because we think solutions that work well in South Asia, for example, could potentially also be translated to Africa and vice versa.

Do you target regions and different segments of the population in Africa? How do you determine and direct the activities of the GCA-Africa?

If we fail to include fairness and equity in how we adapt to a warming planet, we risk pushing millions of more people into poverty. We know how that story ends – with more conflict, migration and instability. With that in mind, we work closely with our partners including the African Adaptation Initiative and the African Development Bank to ensure our activities are directed towards where the need is greatest. Partnering with existing networks, platforms and organizations ensure that we don’t duplicate existing resources but can play a role in effectively filling the gaps that exist.

Right now, global, regional, national, subnational and local entities are working simultaneously, and in parallel to support adaptation actions and many important initiatives exist. However, the speed and scale of adaptation action is grossly insufficient to meet the demand and many stakeholders are not connected to the resources, knowledge, expertise or support others can offer them.

GCA is key to bridging this gap while ensuring at the same time that best practices can be replicated and scaled up in order to catalyse progress towards resilience in the most effective and efficient way.

Africa’s development – be it in infrastructure, agricultural production, urban development, and youth empowerment – can have a different path from other regions. Africa can have a development that is based on a deep understanding of climate risks for planning, resilient approaches with nature and people at the centre, and continuous innovations in technology, financing, and governance for a climate-smart-adapted future.

What are the long-term priority objectives here? But in the short-term, what projects would you tackle in Africa?

The short-term objective, in terms of the programs, is to make sure that when COVID-19 support packages are developed — and they are being developed in real-time by the IMF [International Monetary Fund] and other partners — they have resilience or adaptation action embedded in them.

Current estimates of the cost of climate change to Africa are between $7 – $15 billion per year. African countries are projected to experience clear detrimental macroeconomic consequences from climate change over the coming decades. The IMF estimates that this cost could rise to $50 billion by 2040, about 3% of the continent’s GDP. It is estimated that climate change could result in lower GDP per capita growth ranging, on average, from 10 to 13 per cent, with the poorest countries in Africa displaying the highest adaptation deficit. So, it’s important we act, and we act now.

Let me give an example. As part of the recovery package in Africa and other continents, there is a lot of investment in infrastructure. We want to make sure that these investments have climate risk embedded in their design and hence in their implementation and maintenance. We don’t want to build infrastructure anymore which will be destroyed when the next floods come.

For us, there is a very simple business case, over and above a moral argument, that investing in adaptation is good economics. We think that it is absolutely vital that, in the development of these new infrastructure projects or agriculture projects, that the climate lens is being applied consistently, and that is what we are planning to do in Africa long-term.

We are developing tools, guidelines, methodologies, and innovation programs for governments and development partners to do precisely that. You cannot develop properly without taking climate into consideration. There is this integrated approach that is not always applied, not only in Africa but also across the globe. That is what we are working on.

Since the start of this initiative, what would you consider as your main achievements on the continent? How did you overcome the initial challenges in order to get these positive results?

The urgency of the compounded COVID-19 and climate crises is compelling a new and expanded effort to accelerate momentum on Africa’s adaptation efforts.

At the GCA, we are joining forces with the African Development Bank to use their complementary expertise, resources and networks to develop and implement a new bold Africa Adaptation Acceleration Program (AAAP) to galvanize climate-resilient actions through a triple win approach to address COVID-19, climate change, and the economy.

The AAAP will contribute to closing Africa’s adaptation gap, support African countries to make a transformational shift in their development pathways by putting climate adaptation and resilience at the centre of their critical growth-oriented and inclusive policies, programs, and institutions.

As part of this program, just a couple of weeks ago, at the inaugural Climate Adaptation Summit, hosted by the Netherlands, we announced a new program to deploy billions of dollars to help young people in Africa build a new digitally-driven model of agriculture that can feed the continent’s people and boost prosperity even as the planet heats up.

The African Development Bank has already committed to putting half its climate finance towards the initiative – $12.5 billion between now and 2025.

The challenge now is to raise an equal amount from donor governments, the private sector and international climate funds. In the COVID-context this is challenging – our latest report “State and Trends in Adaptation” showed that investment in climate adaptation fell in 2020 even as more than 50 million people were affected by a record number of floods, droughts, wildfires and storms.

The pandemic is eroding recent progress in building climate resilience, leaving countries and communities more vulnerable to future shocks. I think awareness is really starting to increase that we can either delay climate action and pay for that choice or plan now and prosper. The returns in investing in building climate adaptation and resilience are much greater than the investment – investing $1.8 trillion globally in the next decade could generate $7.1 trillion in total net benefits.

We are also working to strengthen ecosystems that support youth-led climate adaptation entrepreneurship, and youth participation in adaptation policies; scale up climate adaptation innovations by strengthening business development services to 10,000 youth-owned enterprises and 10,000 youth with business ideas on jobs and adaptation; develop tailored skills and provide starting tool packs for one million youth to prepare them for climate-resilient jobs and entrepreneurial opportunities in adaptation and unlock $3 billion in credit for adaptation action by innovative youth-owned enterprises through innovative financial instruments.

With all these on the agenda, what role do African leaders have to play in terms of the global adaptation agenda?

With climate-related disasters expected to slow GDP per capita growth, African Governments are likely to experience increasing pressure on budgets and fiscal balances. Climate extremes are already leading to increased government expenditure, a reduction in the volume of collected taxes, ultimately resulting in an increase in government debt and impairment of investments. Adaptation and investment in climate resilience remain high development and investment priorities for Africa if the continent is to attain the SDGs.

In their Nationally Determined Contributions, African countries have already identified key areas where investments in adaptation and resilience building could yield high dividends. These include agriculture and forestry, water resources, disaster risk reduction, biodiversity and ecosystems, and human settlement. Many African countries are also in the process of preparing and finalizing their National Adaptation Plans.

Having said that, climate change is an all of social problem, no one can solve it alone. The role of African leaders is crucial to mobilise governments to boost climate action on both mitigation and adaptation. They need to improve their ability to incorporate climate risks into planning and financing major infrastructure, agriculture and other resilience-related investments.

With the youngest population in the world, Africa needs to find ways to unlock the power of its youth for adaptation – something we are very focused on at the GCA. Having said all of that, there are already a lot of good adaptation initiatives happening on the continent and many other countries in different regions are going to be able to learn from what Africa is doing.

Besides this, what specifically are the expectations from the leaders, looking at the fact that policies and approaches are different in African countries?

Earlier this year, we published a GCA policy brief, with the African Adaptation Initiative which recommended focusing stimulus investment in Africa on resilient infrastructure and food security to overcome the COVID-climate crisis. This was endorsed by 54 Heads of State and Government on the continent so when it comes to the need to accelerate adaptation action, it’s clear African countries are very much aligned. We are working hard on the ground to facilitate knowledge management and capacity building both within countries and between countries as well as promoting partnerships and co-operation at sub-regional and regional levels for increased synergy and scale. This cannot happen without the support of African leaders.

For example in Ghana, we are working to develop its first national-level assessment of the resilience of its infrastructure systems to climate change. By exploring and showcasing the potential co-benefits of nature-based solutions as part of a country-level package of investment in grey and green infrastructure, Ghana will function as a demonstration country of how to reduce costs and enhance ecosystems and we plan to roll out the initiative to other countries across the continent.

What platforms are there for discussing the GCA initiatives and programs for the African elite and the public? Do foreign organizations offer any support for these?

In January 2021, we hosted our first annual Ministerial Dialogue with over 50 ministers and leaders from international organizations including the newly appointed climate envoy John Kerry and Managing Director of the International Monetary Fund (IMF), Kristalina Georgieva. The aim of this event is to help scale-up global leadership cooperation to accelerate climate adaptation.

Going forward, it will also serve as an annual high-level forum on climate change adaptation, acting as a lever for global leadership to drive a decade of transformation for a climate-resilient world by 2030. African leaders were very active in the dialogue and we look forward to hearing from them in our future sessions.

There are also other partnerships such as the Climate Commissions of the African Union and the African Climate Policy Center. The African Risk Capacity, a specialized agency of the African Union is making important progress enabling countries to manage climate risks and access rapid financing to respond to climate disasters. The African Union is leading the pan-African Great Green Wall initiative which involves many international organizations and foreign governments.

But climate adaptation will not be successful if it just comes from the top-down. The design of adaptation actions must include and be led by local communities who are best placed to understand needs. Solutions need to be context relevant and accompanied by soft support designed to enhance uptakes such as formal education initiatives, agricultural extension or behavioural change campaigns.

Do you suggest governments have to act now to accelerate issues that you have on the agenda for the next few years? What kind of support do you envisage from African governments?

Over half of Africa’s total population experiences food insecurity. The growing number of extreme climate events, from droughts and new crop diseases to floods and unpredictable growing seasons, continue to threaten Africa’s ability to feed itself.

There are increasing rainfall and malaria risks in East Africa, increasing water stress and decreasing agricultural growing periods North Africa, severe flood risks in coastal settlements in West Africa and increased food insecurity, malaria risks and water stress in Southern Africa. The effect of aggregated climate impacts could decrease the continent’s GDP by 30 per cent by 2050.

Suffice to say Africa really doesn’t a moment to lose and we need to accelerate climate adaptation now. In looking towards recovery from the pandemic, we have a unique opportunity to ensure that we all build forward better. It is our responsibility to ensure that the opportunity isn’t wasted and countries around the world must support Africa in this.

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Why Leadership is the Problem

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Leadership

By Jerome-Mario Utomi

During an address by Harvard Political Professor, Samuel Huntington, on August 1995, at Taipei, he was among other things asked of his impression about Prime Minister Lee Kuan Yew’s effort to develop Singapore, and he scantly summed it up this way; the honesty and efficiency Senior Minister Lee has brought to Singapore are likely to follow him to his grave.

However, like faith, which is a belief in things not seen, coupled with the fact that ordinary calculation can be upturned by extra-ordinary personalities, not only did Lee’s efficiency survived him, but history has since assisted in providing answers to the correctness or otherwise of Professor Huntington declaration.

Accordingly, it’s now in public domain those two years after the observation, Singapore- a country with a GDP of $3 billion in 1965 grew to $46 billion in 1997, making it the 8th highest per capita GNP in the world, according to the World Bank ranking.

Clearly, a bracing account and unprecedented result! What is, however, left for those who are living is to learn the lessons from such history and gain wisdom, or ignore it, and wonder in dilemma.

Essentially, the crux of this piece is to use Prime Minister Lee Quen Yew account to analyse and understand the essential ingredients of foresight in leadership and draw a lesson on how the leadership decision-making process involves judgment about uncertain elements and differs from the pure mathematical probability process.

From accounts, aside from the fact that the story of Singapore’s progress is a reflection of the advances of the industrial countries-their inventions, technology, enterprise, and drive, a united and a determined group of leaders, backed by practical and hard-working people who trust them made it possible, It is part of the story of a leader’s search for new fields to increase the wealth and well-being of his people.

From this new awareness, flows the major difference.

When one juxtaposes the above account with the current situation in Nigeria, it, without minding what others may say, points in one direction; Nigeria’s current posturing is more man-made than natural, more of leadership gaps than the lack of resources.

The challenge is further compounded by a misguided view of amalgamation by some segments of Nigerians as more of a historicized occurrence without any barefaced or hidden advantage to the nation; a mindset that further promoted deliberate demonstration of impunity, as well as superiority by one group or region against the other.

But in dramatizing this superiority, the point the people did forget is that never should one ‘be so foolish to believe that you are stirring admiration by flaunting the qualities that raised you above others.

By making them aware of their inferior positions, you are only stirring unhappy admiration or envy that will gnaw at them until they undermine you in ways that you may not foresee’. It is only the fools that dare the god of envy by flaunting his victory’.

The sad news, however, is that this avoidable situation was allowed to complete its gestation and finally gave birth to what is now known and addressed in our political domain as a ‘call for restructuring’ or agitation for resources control.

But at a more significant level, it is the leadership performance deficit which has plundered the socio-economic affairs of the nation to a sorry state; an occurrence that stems from an unknown leadership style described by analysts as neither ‘system nor method based’; without anything exemplary or impressive.

While this appalling situation daily unfolds in our political space, the global leadership stage is littered with telling evidence about leaders that have demonstrated leadership sagacity and professional ingenuity that our leaders have refused to replicate their resourcefulness on our shores.

For instance, in 1932, Franklin D Roosevelt, the Democratic Party candidate, United State of America was elected president in the midst of the great depression. At the time of inauguration in 1933, one-quarter of the labour force was out of a job, with many thrown into poverty. Industrial production had fallen and investments had collapsed.

But within two years of his administration, he revived the economy and moved to the next stage of his agenda. He signed the social security act which introduced the modern welfare state into the United States pension at retirement, unemployment benefits, and some public health care and disability benefits. When asked how? he responded thus; “extraordinary conditions call for extraordinary remedies” This to my mind is leadership accomplishment worthy of emulation.

Regrettably, here in the country, the leadership challenge is given a boost by the ground propensity and penchant for corrupt, nepotistic practices of our ‘leaders’ since independence, a development that is gradually becoming a norm; a state of affairs vast majority of Nigerians claims was responsible for the inability of the nation’s successive leaders to alleviate the real condition of the poor, the deprived, the lonely, the oppressed or get into their lives and participate in their struggle.

Looking at commentaries, one can discern that the above fact is largely responsible for the youth’s restiveness and tribal aggressions as the masses continue to fight in order to register their grievance against state-sponsored socioeconomic deprivations.

It is also of considerable significance to this discourse to note that this leadership challenge has visited Nigerians with not just poverty but what analysts described as ‘island poverty’ or poverty in the midst of plenty; which has, in turn, promoted both hopelessness and powerlessness among innocent Nigerians.

But in all, one thing seems to stand out, our leadership challenge or bad governance was implanted by the leaders, encouraged by our unquestioning obedience to the authorities and can only be reduced or erased by Nigerians.

Having discovered the challenge threatening the continued existence of our country, it becomes imperative that whatever measure the nation may want to use in tackling this challenge can only succeed if it probably puts in place steps that will guarantee leadership restructuring.

Catalysing the process of building the Nigeria of our dreams that is laced with good leadership will among other demands require a sincere and selfless leadership, a politically and economically restructured polity brought by the national consciousness that can unleash the social, economic and political transformation of the country while rejecting the present socio-economic system that has bred corruption, inefficiency, the primitive capital accumulation that socially excluded the vast majority of our people.

Above all, to completely put things right, the federal government must recognize, and position Nigeria to be a society of equal citizens where opportunities are equal and personal contribution is recognised and rewarded on merit regardless of language, culture, religion, or political affiliations.

If we are able to achieve this, it will once again, announce the arrival of a brand new great nation where peace and love shall reign supreme as no nation enjoys durable peace without justice and stability, without fairness and equity!

Part of that effort will entail recognizing that the solution to our leadership challenge may afterward not be based on argument or debate but by the quality of the people in charge.

This will be followed by frantic effort to create a ‘civil society that will help sort out the irresponsible from the response in leadership. Another inoculation that will cure this leadership challenge will demand the development of a mindset for details and history necessary for today’s leadership.

Jerome-Mario Utomi is the Programme Coordinator (Media and Policy), Social and Economic Justice Advocacy (SEJA), Lagos. He could be reached via jeromeutomi@yahoo.com/08032725374.

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