Economy

Kwankwaso’s knowledge economy model: A dream shortened by greed

By Tijjani Ahmad

As a state that accommodates one out of every ten people living in the country, Kano has many competitive advantages over other states regarding development at the sub-national level. Looking at how economies worldwide are competing to finance development, mainly using domestic resources mobilisation, the easiest for the state is to leverage on its abundance of human resources.

As a governor of the state for the second time from 2011 to 2015, Rabi’u Musa Kwankwaso wanted to make Kano a knowledge-based economy by providing necessary education and skills, thereby making a large portion of the state’s economic growth and employment from knowledge-intensive activities. The governor understood how knowledge spurs more rapid growth than any other resources; therefore, he projected the potential of the state to use its population of teeming youth as a comparative advantage.

His revolution started with efforts to bridge the workforce gap in tertiary institutions by sponsoring more than 2,500 postgraduates and undergraduates to study abroad. In addition, he sponsored hundreds of undergraduates in private universities across the country. These beneficiaries were expected to come back and support the education sector of the state and beyond. 

These people were selected based on merit, and most of them occupied positions at various tertiary institutions in Kano state and Northern Nigeria in general. Recently, two of the beneficiaries were listed among the most cited scientists in the world.

The governor further created 47 technical colleges to revive technical and vocational education. These colleges were strategically located across 44 local governments to provide secondary school students in rural and urban areas with skills in various trades. 

Looking at how Kano businesspeople import textile and garments materials, the governor also established skills acquisition centres in more than 20 local governments in the state to serve as incubation centres for modern garment production. However, these centres were about to be launched when the present government truncated the effort. Only God knows the reason. 

I heard the governor on air saying that when these centres are launched, they would compete favourably and capture a significant share of the undergarments market in Nigeria and across the sub-region. This is because the centres have been equipped with the most modern techniques and technology in garment making industry.

Kwankwaso didn’t stop there. He introduced over 20 specialised training institutions to provide in-demand skills in agriculture, ICT, sports, tourism and hospitality, among others. One of them is the poultry training institute located at Tukui village of Makoda local government in the northern part of the state.

The institute is designed to offer formal and informal training in poultry production and management. Immediately after its establishment in 2012, the institute trained 4,400 women in basic requirements for poultry production and management practice.

These centres were meant to bridge the skills gap, provide employment to our teeming youth and reduce insecurity and over-dependency on grants by improving internally generated revenue of the state. Had there been continuity in the models employed by the former governor, Kano would have been on its way to reclaiming the past glory it is known for in terms of knowledge and commerce.

The hope of everyone who wishes good for the state is to consolidate this model by whoever would emerge as the state’s number one citizen in 2023. But, of course, this can only be possible if his priority is development.

Tijjani Ahmad wrote from Kano via ahmatee123@gmail.com.

Beyond the lines of “Devaluation”

By Mohammed Baba Goro

The issue of foreign exchange has been on the front burner in Nigeria’s media space for a while now. Unfortunately, the debate has been so over-flogged that one could hardly know who to cue behind for economic sense and/or who to blame about the helpless fall of Nigerian naira.  Recently, the vice president of Nigeria, Professor Yemi  Osibanjo, who by every sense could be categorised amongst personalities with intellectual power, also frankly spoke that the Central Bank should devalue the country’s currency, naira. But, that is not the only strongest weapon that could kill the werewolf.

As an economic policy, Devaluation is simply referred to as the official reduction in the value of a country’s currency in relation to another or other countries’ currencies: say, Nigeria’s “Naira” with the United States “dollar”. Assuming the current exchange rate is thus:  N410 against  $1 and the CBN decides to devalue the naira by, say, 25 per cent, the naira value will decline, and the new rate will be around N512 to 513 against $1 and against the initial rate of N410. This would make the export of goods and services cheaper and importation dearer. As easy as it sounds, it is easy, but CBN will have high inflation to grapple with.

Ordinarily, that should be a path to take, but the question on the lips of every rational Nigerian is that what massive goods do Nigeria produce? This is a million-dollar question on the lips of every Nigerian for a country that, 60 years after her political independence, still struggles for her economic Independence – Nigeria still imports everything it needs, including essential food items like maise, rice beans and unfortunately, recently, even egg.

Nigeria had to lift a ban last year to import maize for poultry farmers. According to a statistic, the national average for Nigeria’s maize need is about 15million metric tonnes but can only produce 10million, going about with a huge deficit that could have been an opportunity for a source of forex. Even though rice production has increased, the country can still not satisfy its teeming and growing population of over 200 million. This is on the one hand. On the other hand, about 30 per cent of the country’s foreign exchange earnings go to the importation of petroleum products.

The National Bureau of Statistics (NBS) released another mind-boggling stats that the importation of agricultural products has increased by over 140 per cent year-on-year. Devaluation is primarily an “Expenditure-switching policy” that basically switches spending from imported goods to domestically produced goods and for exports.

But judging from the above facts and figures, one would deduce that local production that should drive export and reduce pressure on meagre forex is practically not there. So, “Beyond the lines of Devaluation” is productivity! Productivity!! And productivity!!!

Significantly, production of not only primary products but adding value to raw products so as to create more jobs, generate more revenues, build the needed infrastructures and consequently transform the economy. Brazil in 2011 devalued its currency to spur export without tackling the underlined structural problems and ended up worse off.

So let’s go back to the theory, and the economic argument should be, what determines the exchange rate?

Gustav Cassel, in the ’20s, propounded the purchasing power parity theory, which explains that the determination of two inconvertible paper currencies is determined by the equality of their purchasing power. What this means is that the exchange rate between two countries is determined by the level of their relative prices of goods and services.

A look at Nigeria’s inflation rate, coming from above 18 per cent, would tell you why we are at an exchange rate crisis and why we need to look inwardly and produce more locally. Though the Mint-gold parity theory is no longer in tune with the modern economic practices, but even the Balance of payment parity theory has its link with a country’s productivity level. Therefore, the government should deal with the fundamental and structural rigidities in productivity, trade, security, and infrastructure. Watch naira take her good position and fair value and stop forcing the monetary authority to over-stretch its instruments.

Mohammed Baba Goro can be contacted via babs9770@gmail.com.

Nigeria e-Naira: Why the rush?

By Hamid Al-Hassan Hamid

To be honest, the poor reviews against the eNaira app are all valid negative reviews. As usual, policymakers must have rushed software engineers into developing the app in haste, obviously with poor analyses, and the software engineers do not have the balls to stand their ground and point out facts.

For example, how do you create an app that requires email tied to BVN while email was not a required field in BVN registration? This means that those working on the app did not consult other sectors related to the app, and just imagined the app to work in a certain way, developed the app, and now people are complaining.

I was called in by the Federal Ministry of Health on Wednesday to develop a mobile app that would be used to facilitate disease monitoring and control. They wanted to deploy the app on Thursday. I developed the app with the minimum requirements given, but I strongly advised them against putting the app into production without at least testing for a week. Policymakers were not happy about my stance, but I held my ground, and they are complying unwillingly and willingly. They have seen the app, I spent the whole night hacking it out, created the mobile, server backend, and desktop monitoring, then warned them against deploying.

Not everything has to do with rushing to the market to score points and make names. You must be brutally honest with yourself. If you must deploy such an app that serves such serious responsibility as the national currency, you should at least start developing a year ago, AT LEAST!.

ALWAYS TEST, TEST AND TEST!!!!

WRITE AUTOMATED TESTS, THEN RUN MANUAL TESTS, OVER AND OVER AGAIN UNTIL YOU MEMORISE ALMOST ALL THE CODE!!

IT SHOULD NOT ALWAYS BE ABOUT HITTING THE MARKET. ALWAYS ASSIGN GREAT ENERGY TO ENSURE THAT YOUR PRODUCT IS ACTUALLY READY FOR THE MARKET!!!

 

Hamid Al-Hassan Hamid is a social analyst and expert in software development.

Nigeria’s Development: The Daunting Doom

By Lawi Auwal Yusuf

Leaders are preoccupied with self-centred political hustles, party meetings, extravagant banquets and flying their private or chartered jets over the country attending various lavish occasions. On the contrary, Nigerians turned wistful and sad about the terrible fate of the country and the gloomy future. As they get more concerned, their hope becomes less.

The country is endowed with efficacious potentials for its development to become a global power. It has a strategic location, sizable landmass, enormous young population, highly educated elites and abundant natural resources. In addition, favourable climate, fertile farmlands, and the shores that give it access to the Atlantic Ocean in the South are all added advantages.

In the last sixty-one years, Nigeria has reaped hundreds of billions of petrodollars in total revenues as one of the major producers and exporters of oil to the global market. It is the 12th largest producer of oil in the global ranking, 8th largest exporter and the 10th largest proven reserves. According to the Department of Petroleum Resources, it has about 159 oil fields and 1481 wells in production.

Apart from petroleum resources, Nigeria has multiple precious mineral resources in massive deposits. Moreover, cocoa is the largest foreign exchange earner to Nigeria besides oil and rubber, the second largest.

Similarly, as the most populous state in Africa and the 7th in the world with over 211 million people, Nigeria is a vast market. Its mixed economy is the largest on the continent. It is the 27th largest economy in the world by nominal GDP as of 2021 estimate. By GDP per capita, it is the 137th in the global ranking and the 25th largest by PPP.

However, these unique and extraordinary endowments are rare for a country to possess. These are the best opportunities and possibilities for its advancement. Unfortunately, poor leadership, endemic corruption and mismanagement have been the greatest obstacles in realising the potential. These precious endowments were not genuinely and diligently used. Hence, it has not made appreciable progress in those years. Had they been utilised at the best and maximum capacity, the sky would have been the limit.

More than 40% of Nigerians are living below the poverty benchmark in May 2020 estimates. They are destitute and cannot afford the three daily meals. Today, pervasive poverty depicts the lives of most Nigerians. The life expectancy is as low as 54.7 years on average. Infant mortality reached 74.2 deaths per 1,000 live births in 2019, and maternal mortality was 814 per 100,000 live births in 2015.

Moreover, the stagnant economy, inflation and the perpetual falling value of the naira have aggravated the plight of the masses, making life worse, more challenging and more miserable for ordinary Nigerians. There has been a swift rise in the cost of living and a concurrent decline in the living standard. Therefore, poverty, inequality, mass idleness, underemployment and wretchedness are at the highest pinnacle. This made Nigeria always emerge winner of the global rankings of the poorest nations.

It is appalling that the masses are becoming poorer while the nobles are getting more affluent. There has been a persistent widening inequality between the rich and the poor. Transparency International ranked Nigeria 136th out of 182 in the 2014 Corruption Perceptions Index. It was estimated that more than $400 billion were embezzled by corrupt leaders from independence to 1999. Nonetheless, President Muhammadu Buhari in 2015 said that corrupt officials had squandered more than $150 billion in the last decade. As a result, the country is synonymous with corruption. And the most astonishing is that it is among the wealthiest countries and also the poorest simultaneously. This is because the state wealth is enjoyed only by the aristocrats while the commoners are destitute.

Rule by theft known as ‘kleptocracy’ has deteriorated into kleptomania. They are strongly obsessed with stealing to the level that they don’t even have a material need for it. It degenerated into highly competitive accumulation syndrome. The monies that are ideal for the development of Nigeria are stashed at its detriment in Western countries and therefore become beneficial to their contented economies.

On the other hand, in the early 1960s, Nigeria was self-sufficient in food. But after the Civil War in 1970, the government failed to reinvigorate agriculture, resulting in failure to meet the acute population growth. It had to depend primarily on importation to fill up the supply gap. Sadly, in the 21st-century world, farmers are still tilling the ground with simple implements like hoes and cutlasses to feed a population of over 200 million. As of 2010, almost 30% of Nigerians are employed in agriculture and still have not met up the national demand.

The leaders had failed to provide the basic necessities of life to the citizens. As a result, after more than six decades of self-governance, there is no stable electricity supply, safe drinking water, standard healthcare, adequate and affordable food, qualitative education, social housing estates, infrastructures and social amenities. Nonetheless, the problems of the country in the1960s are yet to be resolved. Poverty, corruption, rule by theft, secessionism, tribal and religious antagonisms are lingering today. Regrettably, terrorism, kidnappings, cattle rustling, banditry and other current collective problems have deepened the crises.

Not being able to diversify the monocultural economy that largely depends on oil plays a significant role in the economy, accounting for 40% of GDP and 80% of the government earnings. Moreover, Nigeria does not adequately exploit the vast array of mineral resources in colossal deposits while the mining industry is still in its early stage of development. Moreover, other sectors of the economy that will help tremendously grow the economy and raise revenues are also underdeveloped. Contrarily, it has remained a perennial borrower of funds in the global capital market. Recently it emerged as the 5th most debt-ridden country in the world. The World Bank in August 2021 said that it had accumulated $11.7 billion in debt.

There has been deficient human development, especially the youths folk. In 2019, it ranked 161st in the world in the Human Development Index with a 0.539 score, which was very low. Millions of school-age children are out of school while some wander the streets freely with torn-out clothes and scavenging through rubbish looking for food. These miserable children are left on their own to live their entire unwholesome lives on the streets in search of a living. They have no qualifications or skills to make them employable in the labour market. Similarly, graduates searching for employment happened also to be idle many years after they had left school. Therefore, almost half of Nigerians are unemployed.

Furthermore, the emigration by professional Nigerian doctors to the diaspora known as the “brain drain” due to adverse working conditions in the country led to shortages of doctors in the healthcare system. It was estimated in 1995 that roughly 21,000 indigenous doctors were working in America alone, which was almost equal to those in the public health service then.

When you make a comparative analysis between Nigeria and its peers to assess its performance, you will realise that it had performed poorly. For example, look at the High Performing East Asian Economies (HPEAEs) that include Malaysia, Taiwan, Thailand, Singapore, Indonesia, South Korea and Japan. They are the fastest-growing economies in the world after the first world countries. Some had launched rockets into space. They manufacture aircraft, ships, automobiles, computers and smartphones while Nigeria still imports razor blades, pencils, toothpicks, including its most abundant petroleum products. Singapore and Japan developed from the less developed countries and joined the first world nations.

Look at other countries like UAE, India, Brazil and South Africa that recently established a consociational democracy in 1994. Nigeria played a significant role in fighting the apartheid regime and helped in establishing the multiracial democracy in the country. South Africa is now regarded as a highly developed state and has become a better haven for Nigerian youths who emigrated there in search of greener pasture.

Finally, Nigeria still has the chance to do better and start developing once more to realise its long-lost potential.

Lawi Auwal Yusuf wrote from Kano. He can be reached via laymaikanawa@gmail.com.