By Jerome-Mario Chijioke Utomi
Similar to a February 16, 2022, media report where economic experts urged the federal government to seek a debt moratorium and reduce the cost of governance to cut funds expended on debt servicing because it is the best option at the moment as it will enable the government to suspend payment for now and re-strategies, particularly the government cannot continue to service its rising debt profile at the expense of meeting the competing needs of the people, a similar expert warning was recently handed by economic analysts that the federal government’s soaring borrowings could eventually suffocate the country if not mitigated.
Speaking in Akure, Ondo State capital at the 32nd annual seminar for Finance Correspondents and Business Editors themed Exchange Rate Management and Economic Diversification in Nigeria: The Pave Option, the experts hinted that going by the government’s borrowing plans, a fresh N6.3 trillion debt may be added to the current debt stock of N39.556 trillion ($95.779 billion as at December 31, 2021) to ultimately push the country’s total debt stock to N45.86 trillion by December 2022.
Notwithstanding this unhealthy trend, they argued it was high time the country invested more in boosting local production and export-oriented infrastructure before the huge debt burden sinks the country.
Indeed, from the explanation/concerns expressed by these experts, this piece clearly agrees that ‘Nigeria’s debt stock has finally become an issue that calls for a more drastic approach to support the fiscal and monetary authorities to tow the nation’s economy out of the doldrums.
But what has, however, caused concern is that despite these prophecy of foreknowledge which deals with what is certain to come and prophesy of denunciation, which on its part, tells what is to come if the present situation is not changed; both acting as information and warning respectively, the President Muhammadu Buhari led federal government has become even more entrenched in borrowing, ignoring these warning signals.
There are so many factors that visibly qualify as a tragedy, including the federal government’s obstinacy and inability to adhere to or heed warning signals.
First and very fundamental, in 2020, one of the reputable national newspapers in Nigeria in its editorial comment among other observations noted that Nigeria would be facing another round of fiscal headwinds this year with the mix of $83 billion in debt; rising recurrent expenditure; increased cost of debt servicing; sustained fall in revenue; and about $22 billion debt plan waiting for legislative approval.
It may be worse if the anticipated shocks from the global economy, like Brexit, the United States-China trade war and the interest rate policy of the Federal Reserve Bank go awry.
The nation’s debt stock, currently at $83 billion, comes with a huge debt service provision in excess of N2.1 trillion in 2019 but is set to rise in 2020. This challenge stems from the country’s revenue crisis, which has remained unabating in the last five years, while the borrowings have persisted, an indication that the economy has been primed for recurring tough outcomes, the report concluded.
Second is a recent news report which indicated that the federal government made a total of N3.25 trillion in 2020, out of which it spent a total of N2.34 trillion on debt servicing within the year. This means, the report underlined, that 72 per cent of the government’s revenue was spent on debt servicing. It also puts the government’s debt servicing to revenue ratio at 72 per cent.
Thirdly, it was in the news that PricewaterhouseCoopers, a multinational professional services network of firms, operating as partnerships under the PwC brand, in a report entitled Nigeria Economic Alert: Assessing the 2021 FGN Budget warned that the increasing cost of servicing the debt will continue to weigh on the federal government’s revenue profile.
It said, “Actual debt servicing cost in 2020 stood at N3.27 trillion and represented about 10 per cent over the budgeted amount of N2.95 trillion. This puts the debt-to-revenue ratio at approximately 83 per cent, nearly double the 46 per cent that was budgeted. This implies that about N83 out of every N100 the federal government earned was used to settle interest payments for outstanding domestic and foreign debts within the reference period. In 2021, the FG plans to spend N3.32 trillion to service its outstanding debt. This is slightly higher than the N2.95 trillion budgeted in 2020.”
Today, such fears raised cannot be described as unfounded just as this author doesn’t need to be an economist to know that as a nation, we have become a high-risk borrower.
And even as the nation goes on a borrowing spree and speeds on ‘borrowing lane’, and at a time the World Bank indicates that “almost half of the poor people in Sub-Saharan Africa live in just five countries: and they are in this order, namely; Nigeria, the Democratic Republic of Congo, Tanzania, Ethiopia and Madagascar, the situation becomes more painful when one remembers that no one, not even the federal government can truly explains the objectives of these loans and whether they utilized in the masses best interest.
Take, as an illustration, it would have been understandable if these loans were taken to build a standard rail system in the country that will assist the poor village farmers in Benue/Kano and other remote villages situated in the landlocked parts of the country, move their produce to the food disadvantaged cities in the south in ways that will help the poor farmers earn more money, contributes to lower food prices in Lagos and other cities through the impact on the operation of the market, increase the welfare of household both in Kano, Benue, Lagos and others while improving food security in the country, reduce stress/pressure daily mounted on Nigerian roads by articulated/haulage vehicles and drastically reduce road accidents on our major highways.
Again, it would have been pardonable if the loans were deployed to revitalise the nation’s electricity sector, to re-introduce a sustainable power roadmap that will erase epileptic power challenge in the country and in its place restore the health and vitality of the nation’s socioeconomic live while improving small and medium scale business in the country.
What about the nation’s refineries?
This piece recalls now with nostalgia that one of the popular demands during the fuel subsidy removal protest of January 2012 under President Goodluck Ebele Jonathan’s administration was that the federal government should take measures to strengthen corporate governance in the Nigerian National Petroleum Company (NNPC) Limited as well as in the oil and gas sector as a whole.
This is because of the belief that weak structures made it possible for the endemic corruption in the management of both the downstream and upstream sectors of the oil and gas industry.
The present administration as part of its campaign promises in 2015, agreed to ensure a better deal for Nigerians six years after such demand was made and Jonathan has gone, the three government-owned refineries in the country have not been able to function at full capacity as promised by the present administration.
Today, if there is anything that Nigerians wish that the FG should accomplish quickly, it is getting the refineries to function optimally as well as making the NNPC more accountable to the people. What happened under President Jonathan has become a child’s play when compared with the present happenings in Nigeria’s oil/gas and electricity sectors.
What the above tells us as a country is that more work needs to be done, more reforms to be made; that as a nation, we are poor not because of our geographical location or due to the absence of mineral/natural resources but because our leaders fail to take decisions that engineer prosperity. And we cannot solve our socio-economic challenges with the same thinking we used when we created it.
Definitely, this piece may not unfold completely the answers to these challenges, but there are a few sectors that a nation desirous of development can start from.
The first that comes to mind is the urgent need for diversification of the nation’s revenue sources. Revenue diversification from what development experts are saying will provide options for the nation to reduce financial risks and increase national economic stability; as a decline in a particular revenue source might be offset by an increase in other revenue sources.
Finally, within this period of economic vulnerability, a new awareness that must not be allowed to go with political winds is the expert warning that accumulated debt can hinder a country’s development, especially when most of the revenue generated is used to service debt.
Utomi Jerome-Mario is the Programme Coordinator (Media and Public Policy), Social and Economic Justice Advocacy (SEJA), a Lagos-based non-governmental organization (NGO). He can be reached via Jeromeutomi@yahoo.com/08032725374
Okowa’s Financial Aid to Mission Schools
By Jerome-Mario Chijioke Utomi
The recent decision by the Governor of Delta State, Ifeanyi Okowa, to provide financial aid to 40 schools it returned to religious missions in 2011 again underscores the time-honoured belief that leaders must learn the art of management, an art of engineering and skill to absorb and mater success in their mission. As there is no hard and fast rule but involves a lot of practical wisdom and prudence in one’s functioning style and performance.
Speaking at the thanksgiving service to mark the end of the 16th Synod of Asaba Diocese, Church of Nigeria (Anglican Communion), held at the Cathedral Church of St. Peter, Asaba, Okowa, who read the first lesson, congratulated the new Bishop of the diocese, the Rt. Rev. Kingsley Obuh, on his consecration and enthronement.
Acknowledging that the running of mission schools is difficult given the current economic condition of the nation, the governor commended the church for drawing his attention to the plight of the schools, especially his promise to ensure that grants were given to missions to assist them in giving a firm standing to the schools that had been returned to them. This, he explained, became necessary to assist the schools in running effectively, particularly in view of the prevailing harsh economic situation in the country.
Indeed, from the above comment by the Governor, it is evident that he is not taking success in leadership for granted or attributing the same to a function of luck and destiny but achievable through effective planning, genuine efforts and technique followed sincerely and scrupulously in their mission.
By his latest action, it is now evident that the Governor considers education as the bedrock of development. More than anything else, his promise to ensure that grants were given to missions to assist them in giving a firm standing to the schools demonstrates a leader with an understanding that with sound educational institutions, a country is as good as made -as the institutions will turn out all rounded manpower to continue with the development of the society driven by well thought out ideas, policies, programmes.
Secondly, it is a sign that he recognizes the challenges of perennial underfunding bedevilling the education sector not just in missionary schools in Delta State but across all the privately and government-owned schools across all the states of the federation.
This challenge has as a consequence brought upon the nation an astronomical increase in the rate of out of school children, especially in the northern part of Nigeria, to swell in number, even when it is obvious that the streets are known for breeding all forms of criminals and other social misfits who constitute the real threat in the forms of armed robbers; thugs, drunkards, prostitutes and all other social ills that give a bad name to the society. This underfunding challenge has also visited the sector with a state of affairs where a number of Nigerians are in school but are learning nothing; as schooling, according to UNICEF, does not always lead to learning.
“In Nigeria, there are more non-learners in school than out of school,” UNICEF concluded.
More specifically, aside from being in the best interest of the state government that those schools returned to the missions are supported to stand because they provide a space for study for some of our children across the state, Okowa’s current gesture reinforces the belief that we all have reasons not only to feel worried but collectively work hard to deliver the nation’s education sector in ways that will bring to an end the reign of thoughtless demand for fees of varying amounts/ proposed by the school authorities-a development that is financially squeezing the life out of the innocent students and their parents.
There exist more concrete reasons as to why Governor Okowa’s present move needs to be applauded.
At the most fundamental levels, it refreshes the minds of Nigerians of the passionate plea by the United Nations for government-private sector collaboration for sustainable development.
For instance, there was a veiled agreement among stakeholders at a recent gathering in Lagos that the government at all levels in Nigeria is shirking the traditional but universal responsibility of provision of educational, economic and infrastructural succour to the citizenry which the instrumentality of participatory democracy and election of leaders confers on them.
Essentially, participants at that event were unanimous that the 2030 sustainable agenda has partnership and collaboration at its centre. It was clearly stated that the scale and ambition of this agenda call for smart partnerships, collaborations, ecosystem thinking, co-creation and alignment of various intervention efforts by the public and private sectors and civil society.
The conference, which had as a theme Partnership for Sustainable Development and Innovation, was among other goals aimed at finding an ‘urgent need for creative and innovative thinking by all strata of the society-public and private sector and civil society-to promoting sustained and inclusive economic growth, social development and environmental protection’.
To further buttress the imperativeness of this needed commitment from all the parties in tackling the agenda, the conference stressed that the partnership is at the very centre of the sustainable development agenda as it is both a means to an end since it is a crucial enabler for the attainment of the other goals and an end to in itself since Goal 17 is a means of implementation and revitalised global partnership’.
Very instructive also, finding a solution to the societal problems, particularly providing access to adequate and quality education for the youths of this nation will in some ways help solve the youth unemployment challenge and develop a climate of sustainable future and innovation among our youths.
Talking about youth unemployment in Nigeria, a report recently put it this way: “We are in a dire state of strait because unemployment has diverse implications. Security wise, the large unemployed youth population is a threat to the security of the few that are employed. Any transformation agenda that does not have job creation at the centre of its programme will take us nowhere”
Youths’ challenge cuts across, regions, religions, and tribes, and has led to the proliferation of ethnic militia as well as youth restiveness across the country. This may, in turn, hamper the peace needed if handled with levity. But this threat has become more pronounced in the oil-rich region of the country with the chunk of the proponents spearheaded by the large army of professionally trained ex-militants currently without a job. Proper management of these teaming youth is the panacea for determining the success or otherwise of the 2030 sustainable agenda, it is only by engaging these teeming youths through employment creation that the incessant youth restiveness can be abated.
One fact we must acknowledge is that the 2030 Sustainable Development Goal was formulated to among other aims promote and carter for people, peace, the planet, and poverty but nurturing to bear the premeditated result will depend on not just the private sector but our government.
To, therefore, move this nation forward, we need to like Governor Okowa, recognize that a sound educational sector and sustained infrastructural development remain the spine. We must learn that nations such as the Jews progressed because they possessed a tradition of education combined with social and political action. They enthroned education and sacrificed to get it.
We must as a nation make quality but subsidized education a human right that will be accessible to all Nigerians irrespective of tribe/ethnicity, sex, religion or creed. And develop the political will to fund education in compliance with the United Nations Educational Scientific and Cultural Organization’s (UNESCO) budgetary recommendation.
Jerome-Mario Chijioke Utomi is the Programme Coordinator (Media and Public Policy), Social and Economic Justice Advocacy (SEJA), Lagos. He can be reached via firstname.lastname@example.org/08032725374
Tips for Building a Low-code Strategy
By Hyther Nizam
Over the last few years, businesses have been racing to digitise their processes and offerings. Whether you’re working from home, banking online, or doing a quick grocery order, you’ve likely noticed a significant rate of transformation. Given that every aspect of a consumer’s daily life is connected to the digital world, the challenge of digital transformation may be daunting. Traditional ways of developing consumer and internal applications are time-consuming and usually require a large number of development resources.
Fortunately, low-code/no-code (LCNC) development platforms empower businesses to quickly create cross-platform applications without writing thousands of lines of code. Low-code/no-code not only simplifies development but also saves time and money. Low-code is not a new concept, but demand for it has increased as a result of the pandemic and the necessity for businesses to speed up their digital transformation initiatives.
The advantages of low-code/no-code
LCNC platforms provide a visual environment for building applications. As they provide snippets of pre-built code in a simple drag-and-drop user interface, people with little to no programming experience can also build custom web/mobile applications. However, it’s crucial to take the time to identify the most effective LCNC platform for your business before diving headfirst into app building.
The LCNC platforms help teams develop applications faster and with fewer errors than traditional coding. Because the platforms provide standard components such as forms, report templates, and ready-to-use code snippets, months of development time can be saved. By eliminating some of the more complex aspects of the application development process (such as creating frameworks and linking databases), these platforms empower people across the organisation to get involved in application development and bring their business ideas to fruition, without having to depend on IT assistance.
Zoho Creator, Zoho’s low-code platform, aims to facilitate efficient app development and effective collaboration. It uses pre-built integrations to connect with hundreds of systems and cloud services to make app development quicker and easier. Organisations can seamlessly integrate Creator with other Zoho applications and third-party platforms like QuickBooks, Zapier, and PayPal. To facilitate effective collaboration, Creator gives organisations the power to assign roles to users and grant them access to information relevant to their jobs. Role-based access controls help ensure the application development process is both streamlined and secure.
Now that digital transformation is an ongoing imperative for most businesses, agility and collaboration are critical. Our research shows that 40% of organisations are involving their business teams in their digital transformation processes. This indicates a growing understanding that digital transformation affects the whole business—not just IT teams.
Considerations for using LCNC strategies
First, and potentially most important, your business must know what to look for in LCNC platforms. Besides the visual modelling and drag-and-drop interfaces that make these platforms easier to use, your LCNC platform should be secure. It should have the required security framework certifications in place and espouse data confidentiality measures. It’s important to avoid using software that potentially opens the door to hackers.
Your LCNC platform should be equipped for multi-device deployment (meaning that you only have to create an app once for it to be accessible on any device), and scalability so you can add more users to your application as your organisation grows.
Once you’ve identified the right platform, it’s time to start cross-organisational planning for the digital experiences your organisation will provide, and the ways low-code can be leveraged to create those experiences. Remember, one of the major strengths of a good low-code platform is that it allows for collaboration. People across the organisation need to be exposed to the platform to understand what it can do for them.
The time is now
There has never been a better time for your business to embrace an LCNC strategy, as the world is undergoing an unprecedented rate of digital transformation. It is essential, however, to combine the correct platform with a strategy that enables your entire company to realise the benefits of low-code development. This is the most effective way to put your business ahead of the competition.
Hyther Nizam is the President of MEA at Zoho Corp
B2B e-Commerce: Fostering Sales, Distribution with Data Analytics
The informal sector is a major source of economic growth and productivity globally. According to both the World Bank and the International Labour Organisation (ILO) statistics, more than 2 billion people representing 61% of the world’s employed population work in the informal sector.
Of the number, 93% are reportedly in emerging and developing countries. Around 86% of employment in Sub-Saharan Africa is in the informal sector, while 80% of household retail distribution is said to be delivered via informal retailers.
Nigeria is reputed to have a huge informal sector that makes up 50% of the country’s Gross Domestic Product (GDP) and accounts for over 90% of employment. The informal retail market value is estimated at US$100bn out of which the food and consumer goods retail segment is worth over $40bn.
B2B e-commerce firm Alerzo’s CEO, Adewale Opaleye, described the informal sector as a major source of economic growth, productivity and competitiveness.
Despite the importance of the sector, informal retailers face complex challenges that impede their business growth, financial and income stability and service quality. The challenges include limited inventory due to high demands, meaning the market is underserved; and limited access to funding which sometimes leads them to stock low-quality products.
The retail market is also clustered; products are often overpriced because prices are largely unregulated. Distance to market especially those in hard-to-reach locations; opportunity costs; dangers of travel; inadequate logistics such as transport to move purchased goods also impact informal retailers adversely. The unstructured nature of most retail businesses is another setback.
The challenges faced by consumers at the base of the pyramid also represent another key issue in the retail market. Often, lack of access to reliable product information, quality products and services, and low purchasing power deny consumers access to everyday essentials such as food, medicine, hygiene and household products.
The fallout of the challenges in the retail market segment is that manufacturers and distributors are often unable to track data on informal retail sales, regulate quality or access BoP customers for research, marketing or the delivery of social mission goals.
As a strategic pivot for national GDP growth, reforming Nigeria’s informal trade is a key to unlocking socio-economic prosperity for the citizens, and improving the lives of the retailers themselves including their families, and the communities in which they operate.
Hence, initiatives that remove barriers in the Factory-to-Retail distribution chain for consumer goods companies are most welcome. The role of e-Commerce, in particular tech-driven B2B e-Commerce platforms, is pivotal in this regard.
“Our mission is to empower these informal retailers through our ecosystem of digital products, so they are equipped to run profitable and sustainable businesses. We strongly believe that technology has the potential to transform the way informal retailers conduct their businesses, by using it to facilitate – with just a click of a button – fast and easy access to a wide assortment of consumer products at zero delivery cost to the retailers,” Alerzo CEO, Opaleye said.
B2B e-Commerce platforms are beneficial to manufacturers and tier one distributors as enablers of data gathering and market intelligence. By utilising an array of digital technologies to gather market intelligence and analyse data, they arm goods producers with vital information on consumer behaviour to further help them in research and product development. Distributors also use such information to scale up operational efficiency.
The use of customer data significantly fosters sales growth and enhances customer relationships. According to Statista, a 2018 survey in the United States showed that 84% of industry-wide leading firms revealed that data analytics helped to bring greater accuracy to their decision-making. That is, data utilisation and related analytics methods were reported to deliver the most value to firms by reducing expenses and creating new avenues for innovation and disruption.
Data analytics enable manufacturers and distributors to strengthen their business operations. For example, in supply chain management and customer relationship, data analytics can support the personalisation and customisation of sales and customer services to build stronger and more personal relationships with customers.
By deploying data technologies and tools, B2B e-Commerce platforms like Alerzo collect data and market intelligence to identify what customers actually expect from companies and to predict their future demands. In other words, data analytics help to create business knowledge, that is, information and understanding related to business processes and the business environment. It can additionally reveal hidden behavioural patterns.
Furthermore, B2B e-Commerce can provide manufacturers access to real-time data and instant information, creating real-time knowledge of markets, and when properly implemented, can increase sales. McKinsey’s research suggests that a healthy data culture, that is, an organisational culture that accelerates the application of data analytics, is becoming increasingly important for leading and lagging companies. Also, the deployment of data helps to provide accurate and timely information within an organisation.
B2B e-Commerce platforms by utilising their digital solutions can make the collection of data more feasible and cost-effective for manufacturers and distributors. Data analytics as one of the emerging areas in the domain of B2B marketing can even support businesses with access to big data thereby increasing access to quantitative and qualitative information beyond just transaction data such as purchase quantities.
In a nutshell, B2B e-Commerce in so many ways offers solutions that are helping to address the needs in the Factory-to-Retail distribution value chain holistically – at the supply side (manufacturers, top-tier distributors and last-mile retailers), and the consumers (demand) side.
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