http://www.amazon.com/Pathways-Shared-Prosperity-Nigeria-Government/dp/1532985509/ref=sr_1_1?s=books&ie=UTF8&qid=1463276580&sr=1-1&keywords=OshikoyaSaturday 14 May 2016
The Nigerian Economy: A Macroeconometric and Input-Output Model
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This book combines descriptive, technical, empirical, policy evaluation, and forecasting methodologies to provide a systematic analysis of the Nigerian economy--the largest and most dominant economy in Africa.
Available from Amazon.com and other retail outlets
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http://www.amazon.com/s/ref=dp_byline_sr_book_1?ie=UTF8&text=Oshikoya+Temitope+Waheed&search-alias=books&field-author=Oshikoya+Temitope+Waheed&sort=relevancerank
Friday 1 April 2016
Thursday 5 November 2015
Of Ministers, Clowns, Hazards, and Lazard
26th October, 2015
Temitope Oshikoya**
After a
four-month hiatus, the ministerial orchestral band of thirty seven noisemakers
finally arrives on the stage. The Ministerial list is a mix of professionals
and politicians; party loyalists and non-party members. There are eleven
lawyers, 5 former governors, three medical doctors, and three academicians. In
the context of the President’s campaign platform of security, economy, and
corruption (SEC), the issue of the economy appears to be the least favoured on
the ministerial band.
What lessons
can the fresh noisemakers on the musical stage learn from the previous noise
makers of the immediate erstwhile administration? First, the new noisemakers should
avoid serenading us with their ministerial megaphone melodramatic melody. The
clowns or leading lights of the previous administration, especially the
handlers of the economy certainly enjoyed running a circus. They serenaded us with outlandish claims about
the economy and inputs, never mind that under their watch the domestic debt
quadrupled to 11 trillion naira. But their outputs clearly showed tangible
deliverables in growing the misery, poverty and unemployment indices for the
vast majority of Nigerians.
Second, the
new noisemakers must avoid waxing us with the lyrics of blissful ignorance. With
their mastery of colourful graphic and gimmick presentations, the previous
clowns were very adept at hiding the icebergs that the economic titanic was
heading towards. This much was exposed in January of this Year in an article
titled: How not to manage the economy.
Standards & Poor’s ratings, JP Morgan Index, and international media, which
they initially carefully cultivated, later revealed their folly and economic
ignoramus.
Third and more
importantly, the new noisemakers must play their melody with a somber tune. The
previous clowns were not only blissfully ignorant, they were absurdly arrogant.
As Tony Marinho wrote in The Nation, they displayed the disease of “Ministerial
Arrogance and Delusions of Grandiosity.” They certainly like to go about
blowing their trumpets as the self-acclaimed “leading lights” of the previous
administration.
Nigeria has
several heroes at home and in the Diaspora in various professional fields in international
public institutions and in the private sector. In particular, there have been
Nigerians who have served as Head of the Commonwealth, Under Secretary General
of the United Nations (UN), Head of the UN Economic Commission for Africa, Head
of IFAD, Executive Director of UNFPA, and Secretary General of OPEC. There are
others in the private sector, including a Nigerian serving on the board of
Goldman Sachs.
Unlike these
silent heroes, the clowns like to go the extra miles to convince us that they
are the greatest things ever since sliced bread. They want us to believe that the former
Director General (DG) of Budget has been appointed by the African Development
Bank (AfDB) because of his performance in that prior role. Hogwash, we all know
how far Nigeria’s budget, especially 2015 budget, has been widely off the mark
and how fiscal leakages are now being plugged. This appears to be simply part
of the attempts by the former Minister of Finance, who nominated the DG to
serve as Nigeria’s executive director, ambassador or representative to the AfDB,
to provide a soft landing to cronies just before a new administration was set
to take over.
They also want
us to believe that the current AfDB’s President got the position solely on the
strengths of his expertise, experience, and exposure as a Minister of
Agriculture in the previous administration. As this writer has noted in an
article in the Guardian in April, 2015 on The
Race for the AfDB Presidency,”more importantly, and beyond professional
expertise, experience, and vision statement, the election of the AfDB’s
President is a high-powered political affair reflecting an extension of
countries’ foreign policy and commercial interest and sub-regional rotation.”
For instance,
there was no way Nigeria’s candidate who was head of OPEC in 1995 would have
been allowed to take up the headship of the AfDB under former Head of State,
General Sanni Abacha. By the same token, if the March 2015 democratic elections
had gone awry or the current Nigerian President did not come out to support Nigeria’s
candidate, the Presidency of the AfDB would have eluded us!
Fourth, the
new orchestra band noisemakers must avoid the revolving doors of the vaudeville
theater hall. Some have raised concerns about former government officials being
connected with their new employers. Some have been asking what role Lazard and
its subsidiary played during Nigeria’s debt negotiations with the Paris Club. In the USA, a prominent Senator has being
championing the case against revolving doors by Wall Street bankers into
government and vice versa. Specifically, earlier this year, the appointment of
a former Lazard’s banker into a high profile US Treasury position was blocked
as part of efforts to control the use of revolving doors.
All of which
brings us to issues of moral hazards, which in economics imply people making
the decision about taking risks knowing that others will bear the costs and
burden of those risks. In this context, is it the case that the clowns and merchants
of misery are bailing out after leaving majority of Nigerians with rotten
apples of misery deriving from their economic mismanagement? Finally, the new noisemakers must avoid the antics of the clowns and their town criers who think their clowns are meant to serve only their clans. With these musical musings, we wish the new noisemakers well in their new roles as Ministers of the Federal Republic of Nigeria.
**Dr. Temitope Oshikoya, an economist, writes from Lagos.
Sunday 31 May 2015
Expert Puts Cost of Buhari’s Economic Blueprint at N60 Trillion
Expert
Puts Cost of Buhari’s Economic Blueprint at N60 Trillion
31 May 2015
Views: 4,626
• Calls for prioritisation of policies, programmes
By
Kunle Aderinokun
It
has been estimated that it would cost the President Muhammadu Buhari-led
administration a total of about N60 trillion ($300 billion) to implement its
economic blueprint.
A
former Chief Economist of African Finance Corporation and former Director of
Research at the African Development Bank, Dr. Temitope Oshikoya, gave this
estimate in his report (made available to THISDAY), based on the analysis of
the economic blueprint by BudgiT at the recent policy dialogue on APC
manifesto.
In
view of the enormous cost of implementing the economic blueprint, which
represents 60 per cent of the nation’s GDP, Oshikoya advised the new
administration to prioritise and sequence its policies and programmes.
He
noted that the economic blueprint, which he termed ‘Buharinomics’, “faces a
quadrilemma in trying to achieve equity, efficiency and effectiveness in a
slowing economy.”
According to him, “as the administration faces difficult short-to-medium term policy choices and opportunity costs requiring trade-offs with long-term consequences, prioritisation and sequencing of its policies and programmes are in order.”
According to him, “as the administration faces difficult short-to-medium term policy choices and opportunity costs requiring trade-offs with long-term consequences, prioritisation and sequencing of its policies and programmes are in order.”
Oshikoya,
who explained that the equity portion accounts for a fifth of the total cost of
the blueprint, noted that the efficiency portion represents 38 per cent
while guarantees are 42 per cent.
While
also pointing out that the equity portion alone requires an annual expenditure
of about N12 trillion, he said the total annual revenue for the Federation
account is less than N10 trillion.
He
therefore expressed belief that “from reducing the cost of governance, the
effectiveness pillar could yield N1trillion.” The extra burden, according to
him, will then “fall on the economy pillar with efforts made to plug the
fiscal leakages from oil revenue and more non-oil revenue will need to be
raised from increasing the tax rate, broadening the tax base, and increasing
collection efficiency.”
Essentially,
Oshikoya, who is the chief executive officer of Nextnomics Advisory, noted that
“the vision of a social-democratic welfare state with a dynamic market economy
is a noble one.”
“The
immediate social inclusion equity programmes for achieving it partly work
through fiscal stimulus to consumption and aggregate demand, Keynesian
economics style. On the other hand, the efficiency related programmes are
geared towards removing long-term supply side constraints to the economy
through structural reforms for competitiveness and enhancing infrastructure
investment-led productive growth,” he added.
Oshikoya
noted that “the envisaged social democratic welfare state aims to tackle the
vicious circle of poverty and high misery index, and inequality in social
mobility, income, wealth and economic opportunity.
“The
new administration plans to create a social welfare programme to provide N5,000
monthly for the 25 million poorest Nigerians. It will provide unemployment
allowances for unemployed Youth Corps graduates for twelve months; one meal a
day for all primary school pupils; a national identity scheme--NIS and a
regional growth fund—RGF.”
“According
to BudgiT, the total cost of implementing these direct equity programmes is
N2.15 trillion or $10.8 billion.”
“Closely
related to the direct equity programmes are the education and healthcare
programmes to enhance the productive capacities of citizens, costing another
N662 billion or $3.31 billion. These programmes include new vocational schools;
new six universities of science and technology; and world class hospitals. In
addition, BudgiT estimates suggest that N8.8 trillion or $44 billion per year
will be required as national health expenditure,” he added.
He
reasoned that prioritisation of all the equity programmes would be necessary,
giving the total costing of N11.5 trillion or $58 billion.
“While
the core social welfare programme could be initially scaled down by
half”, the economist posited that “establishing six new universities or
new world class hospitals cannot be of immediate main priorities.”
He
added: “It is also difficult to meet over the medium term the targets of
increasing by two-half times the number of physicians per 1,000 population from
19 to 50, and increasing national expenditure per person per annum five times
to N50,000. The RGF may be targeted initially as a Marshall Plan for the
North-east, as the NDDC is essentially a RGF for the South-South.”
Besides,
Oshikoya also said: “While the NIS is crucial to the effectiveness of the
social inclusion programme, it should build on the ongoing biometric programmes
at the CBN, INEC, and NIMC and the e-wallet programme in the agriculture
sector.”
Oshikoya
advised that, “the expenditure on social inclusive equity programme should
initially be targeted at N5 trillion or about 5 per cent of GDP, and half of
the current projected estimated spending. This benchmark, according to him, is
in line with cost of social protection programmes in Ethiopia, Kenya, and
Tanzania.
“According
to Cash Transfers Evidence Paper by DfID, the cost of Ethiopia’s Productive
Safety Net Programme is estimated at 5.3 per cent of GDP. Large middle-income
countries spend less per GDP. India’s National Rural Employment Guarantee is
estimated to cost 2.2 per cent of GDP; Indonesia’s Safety Net Scheme, which
covers 84 million people or a third of the population, is estimated to cost 0.7
per cent of GDP.
“Brazil’s
Bolsa Familia programme created in 2003 cost 0.36 per cent of GDP and covers 46
million people or a quarter of the population and has lifted million of
families from poverty. The Brasil sem Miséria established in 2011 has a fiscal
cost of less than 0.6 per cent of GDP at an average of $65 per family according
to the IMF,” he added.
Wednesday 22 April 2015
Race for the AfDB Presidency
This article has
been published by The Guardian on 22 April 2015 and Newsdiary Online on 14
April 2015
http://updates.hopefornigeriaonline.com/race-for-the-afdb-presidency/THE election to replace Dr. Donald Kaberuka from Rwanda as the President of the African Development Bank (AfDB) will take place in Abidjan during its yearly meetings next month. Eight candidates are vying for the prestigious position of Africa's premier multi-lateral development bank, which turned 50 in 2014.
Based
on depth of professional qualifications and breadth of experiences, Dr.
Akinwumi Adesina, Nigeria's Minister of Agriculture, is one of the
front-runners. He has international development and in-country experience
spread across 14 other Anglophone and Francophone countries in West, East and
Southern Africa.
Dr.
Kamara of Sierra Leone, an economist, should also be a strong contender having
served as Governor of Central Bank, Minister of Finance and Economic Planning
and Minister of Foreign Affairs of Sierra Leone in addition to having worked at
the IMF and the Commonwealth. Mr. Sufian Ahmed has a long-standing public
sector experience; he has been Ethiopia's Minister for Finance and Economic Development
for two decades at a time when his country became one of the darlings of the
international donor community.
Mrs.
Cristina Duarte has private sector experience at Citibank and serves as
Minister for Finance and Planning for Cape Verde. The Tunisian candidate, Mr.
Jaloul Ayul is also a Minister of Finance with private sector experience as
former Citi banker and Managing Director of a commercial bank in Tunisia. There
are three former AfDB's staff members.
Mr.
Kodje Bedoumra, an engineer, brings with him experience of managing
infrastructure projects at the AfDB, which is now the institution's largest
portfolio, and as its former Vice President. He has also served as the
Secretary to the Government within Chad's Presidency, as well as Minister for
Economic Planning, and Minister for Finance.
Mr.
Birama Sidibe, a Malian is now Vice President for Operations at Islamic Development
Bank (IsDB). Mr. Thomas Sakala from Zimbabwe is a veteran and former AfDB's
Vice President for Country and Regional Programming.
There
are three key issues that the AfDB needs to address going forward. First, how
many countries will graduate from its soft lending window of African
Development Fund (ADF) in five to 10 years' time? The ADF lends to poor and
low-income 35 countries - two-thirds of 54 African countries, many of which
cannot borrow from the AfDB window. Graduating from the ADF-window implies that
a country has raised its per capita income to become a middle-income country
and successfully lifted a majority of its people out of poverty.
Second,
what will the AfDB do differently that the World Bank cannot do? The World
Bank's strength, arguably, lies not only with its financial lending (it
provides three times what AfDB provides to some African countries), but also
with its ability to drive and shape the development agenda and in-country
priorities with its policy and knowledge capital.
Third,
why should non-African countries provide additional finance either through the
capital markets or donor funding to the AfDB and ADF and not to the World Bank
or their own respective bilateral development agencies? In essence, what would
be the value-added of a marginal increase in funding to the AfDB? On the other
hand, why should African countries trust the AfDB if they feel that they need
greater voice at the institution?
In addressing these fundamental issues, the
vision statement of Ethiopia's Suffian Ahmed stands shoulder and head above
others, as recently posted on the AfDB's website. His statement is on three
core tasks: "First, focus on our financing on what we are best at and what
will make the biggest difference in Africa... .Second, bringing world class
advisory capacity to the table in support of the countries we work with...
.Third, invest in high quality management and operations---with the whole bank
focused on effectiveness value for money and minimizing costs."
His
statement then addresses four priority areas--infrastructure, agriculture, the
private sector, and supporting fragile states. In each area, he has only three
short paragraphs covering Africa's challenges, his in-country experience in
tackling those challenges, and what he plans to do at the AfDB. The next vision
statement that comes close is that of Dr. Kamara of Sierra Leone, especially in
terms of packaging and presentation. Surprisingly, the vision statements of the
other six candidates read more like mid-term research papers; writing as
technical experts is quite different from writing a vision statement as
presidential candidates for a continental organization.
More
importantly, and beyond professional expertise, experience and vision statement,
the election of the AfDB's president is a high-powered political affair
reflecting an extension of countries' foreign policy and commercial interest
and sub-regional rotation. While Eastern Africa and North Africa produced the
two most recent presidents, Central Africa may claim that it is now its turn.
Being
the largest shareholder and with a positive image from its successful
elections, Nigeria could also note that it is also its own turn, especially
with a South African now head of the African Union, which breaks a
long-standing unwritten rule that the SANE countries - South Africa, Algeria,
Nigeria, and Egypt with a combined GDP of over half of Africa's - should not be
the head of continental organizations.
The
AfDB's president is elected with a double, but simple majority of both African
votes and total votes. In the earlier rounds of voting usually based on country
and sub-regional voting shares and linguistic affiliations, the candidates with
the least vote, possibly from Eastern and Southern Africa (17% of total vote),
West Africa (3.7%) ex-Nigeria, and Francophone blocs (11% of total votes) who
may fully support Mali or Chad, will drop out if North Africa with about 19% of
total vote support for Tunisia.
During
these earlier rounds, Nigeria's Adesina will scale through and possibly to the
final rounds given the country's 9.3% total shareholding (16% of Africa's 60%
vote). Non-African western countries generally prefer candidates from
relatively smaller or low-income African countries with heavy reliance on
official development assistance.
France
may initially team up with Mali or Chad; Arab/Gulf countries with either
Tunisia or Mali given the connection with IsDB; and China with Nigeria.
Zimbabwe's candidate may be handicapped by perception of his country's image with
the western countries, which may support Cape Verde, Sierra Leone or Ethiopia.
However,
if the western countries with about 36% of total votes feel that their
preferred candidate may drop out too quickly because of low votes, they will
most likely coalesce around that candidate very early in the voting rounds to
propel the candidate to the final round.
Dr.
Kaberuka of Rwanda, now with less than 0.2% vote, benefitted from this strategy
in 2005. Ethiopia, Sierra Leone, or Cape Verde may likely benefit from this
networking effect this year.
In
this regard, Cristina Duarte is probably one to watch as the undeclared and
anointed candidate of the non-African western countries partly for being the
only female and a Luso-phone candidate, with both private and public sector
experiences from a country with low voting shares (0.09%).
The
2015 election for AfDB's presidency is indeed getting very interesting and the
best counsel during the campaign process: Trust, but verify.
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