Economist Says Monetary Policy Inconsistency Unsettles People, Business

petrolAn economist, Austin Nweze, has criticised the recent decision of the Federal Government of Nigeria on the monetary policy of the nation.

This follows the recent decision of the Central Bank of Nigeria (CBN) to discontinue its sales of foreign exchange to the Bureau de Change operators and allowing banks to accept foreign currency cash deposits from their customers.

Mr Nweze said the inconsistency of the monetary policy had unsettled people and businesses.

“Companies are waiting, hoping that the CBN will reverse itself. Some companies I know have left the country because of this kind of policy,” he said.

The economist urged policy makers to make policies that will forecast future complications from the start.

“They should be far thinking to know the implication from the beginning; to know the implication to the economy, to the people before you engage yourself in this kind of policy.”

Mr Nweze, however, believes that the Central Bank Governor, Godwin Emefiele, wants to develop the manufacturing sector, but expresses worries that the capacity to take risk is not there.

“His comments shows that he wants the manufacturing sector to thrive in this country but doesn’t want to take a risk or maybe he doesn’t have the peril to take that kind of risk.”

The economist suggested that the CBN should meet with other stakeholders to deliberate on the type of economy on ground and what they want to achieve.

He also criticised the method being used in the anti-corruption fight, saying the government should focus on other things.

“All we see is expose. The institutions should be allowed to fight this thing and the government should focus on other things,” Nweze said.

He added that ‘all problem is not really corruption, all corruption lies in education’.

Government Needs To Establish Credit Bureau – Nweze

nwezeAn Economist, Austin Nweze, has urged the Federal Government to establish a credit bureau to investigate bank debtors.

Mr Nweze, on Channels Television’s Sunrise Daily, said that the country needs a structure beyond the conventional banks but like the venture capital firms that can take up the risks instead of the banks directly.

Talking about the process of creating debts, the Economist said that Nigerian banks are to be blamed for defaults because from the beginning of a transaction, they make it difficult for the lenders to pay back.

“Agreed that the CBN and NPC have the monetary rate, in addition to that, there is also cost that NDIC would also take.

“When they calculate the rate by one or two per cent, cost of management fee and the interest rate moves from 13 per cent to 25 per cent and that is how the banks make profit.”

The Economist stressed that the Nigerian economy would not grow if it keeps pushing monies meant for businesses to the bank.

“Government is the biggest debtor. If government could pay off the domestic dept they owe, it has a way of influencing the economy; the bank will have money, businesses can expand, interest rate can reduce,” he said.

Mr Nweze further said that Government should make a policy that would encourage local industry and manufacturing.

He added, “It is the government policy that makes it easier for people to import than to manufacture.”

 

Petrol Price Reduction: Transport Workers In Abia To Reduce Fare

PetrolThe Chairman of Abia State Chapter of National Union of Road Transport Workers, Sunny Nwakodo, has said that there is the likelihood to reduce the prices of transport in the state.

This is in line with the decision of the Federal Government to reduce the pump price of petrol from 97 naira to 87 naira per litre.

According to him, if all the petrol stations in the state abide by this new pump price, commuters would have a cause to smile as the union would do all within its ability to bring down fare.

While some of the petrol stations in the state, visited by Channels Television, have started selling at the new price, others have not changed their prices.

According to them, their inability to sell was because they were waiting for orders from the management to revert to the new price.

Some of them also claimed that they bought the fuel at the former price and the turn of event might affect their profit margin.

This has led to the NNPC mega Station being besieged with several vehicles.

Although many commuters expressed the view that the Federal Government’s decision to reduce petrol pump price was to draw attention for campaign purposes, a large number of them also think otherwise.

Some of the consumers who spoke to us said that the action taken by the government to reduce petrol pump price was commendable.

Many were pleased to buy their petrol at the new price of 87 naira per litre.

New Petrol Price Will Not Immediately Affect Common Man – Nweze

petrolA Professor at the Pan Atlantic University, Austin Nweze, believes that the Nigerian Government’s reduction of the pump price of petrol is a welcome development considering it came without a fight from Nigerians.

He, however, added that how long this would last remains something to ponder on as there are several factors that determine the prices of petroleum products.

Speaking on Sunrise Daily, he noted that the reduction of the pump price of petrol was a consequence of global drop in the price of crude oil, and wondered if the pump price in Nigeria would be raised again when global crude price goes up.

While sharing the view that it was not yet time to celebrate a permanent reduction, he also noted that such reduction would not affect majority of Nigerians as commuters would still be paying the same amount they pay for transportation.

He admitted, although, that vehicle owners who buy petrol daily would immediately start to benefit.

Explaining the dynamics of the oil market, Nweze opined that this was a good opportunity for the Nigerian Government to completely remove subsidy and allow filling stations to sell at different prices.

To validate his suggestion, he stated that many towns in the South-Eastern part of the country had been buying petrol at different prices different from the former price of 97 naira per litre. Therefore a deregulation would not be strange.

He also noted that this could help develop local refineries and also encourage local entrepreneurs to invest in the sector rather the Nigerian economy being in the hands of foreigners.

Professor Nweze further emphasized the need to diversify the Nigerian economy.

Austin Nweze, who is also the governorship candidate of the Social Democratic Party (SDP) in Ebonyi State, spoke briefly about his ambition and his chances of clinching the governorship seat in Ebonyi State in 2015.

Devalued Naira: Expect High Impact On Businesses, Job Creation – Nweze

Austin NwezeA professor at the Pan Atlantic University, Austin Nweze, has asked citizens to brace up for the impact of the decision taken by the Central Bank of Nigeria to devaluate the naira and increase interest rate, noting that this would affect businesses and ultimately, job creation.

While shedding light on the implications of the CBN’s action, Nweze stressed that business owners should expect to pay up to 30 percent interest rates if they obtain loans from the banks and since entrepreneurs are the major job creators in any thriving economy, it will discourage them from expanding their ventures. Hence, unemployment rate will not reduce.

Asides from the impediment to business growth, citizens should also expect high cost of goods and services because of the structure of the economy, Nwaeze said, noting that “Nigeria’s economy is import dependent”.

“The domestic production is below 4 percent as manufacturing contributes less than four percent to the GDP”.

He also warned that an increase in fuel price should be expected in 2015, insisting that the proposed austerity measures to combat the slump in global oil price should start with the government.

What he described as the ‘unholy trinity’ including the interest, foreign exchange and inflation rates would be affected as well because “as you’re fighting inflation, the interest rate has a way of influencing the whole economy.

He noted that there had always been the danger of depending on oil as the nation’s major stream of income, adding that “I thought that we would have learned from the past experience because this is not the first time it has happened.

“When Soludo was CBN governor, this kind of thing happened. There was not enough dollar to finance the budget. He had to devalue.”

This led to some people becoming naira billionaires by reason of exchanging dollars they had previously stacked up, Nweze said, adding that the same thing has happened again.

He insisted that it was time for Nigeria to restructure its economy away from oil, noting that as at 2008, the United Arab Emirates had only five percent contribution from the oil sector to the GDP but Nigeria has over 90 percent.

On the CBN’s action to counter the effects by devaluing the naira and raising interest rates, Nweze supported critics who have said it is not a good mix.

He stressed that a 13 percent interest rate will have severe impact on businesses and this would in turn affect job creation on the part of entrepreneurs.

Commenting on the CBN’s explanation that the action was taken to curb frivolous demands of the dollar, Nweze noted that the demand for dollar would be on the increase by high class citizens who would want to be able to leave the country in case of any crisis, as the election year draws near.

“Most rick men who don’t have confidence in this country are staking up dollars”, he said.

Ex-governors’ Pension Is Financial Burden On The States – Nweze

Austin-NwezeThe payment of huge pension and other benefits to ex-governors and their deputies in Nigeria has been described as a huge financial burden on the states that could make them go bankrupt.

Mr Austin Nweze of the Pan-Atlantic University told Channels Television on Monday that the amount of money paid to ex-governors and their deputies as pension after their service years was too much, insisting that they should be paid pension like every other civil servant based on their salaries while in office.

He suggested that the money the governors collect should be used to subsidise education and provide other social amenities.

“After office every governor should have something doing to generate money that can sustain him and not depend on the money that they will be getting from the state.

“In as much as there is a laid down rule and guideline on how much should be paid out, there should not be a special package for political office holders different from that of the civil servants. Anything that is applicable to civil servants must be applicable to the political office holders.

“It does not matter if the state has the capacity to pay the amount or not. There should be fairness. The individual has served the state, salaries were being paid and some monies were ‘misappropriated’. There are several allowances that the system had provided for them. The ex-governors are putting the laws in place because they lack the financial skill to manage what they get within the period they are in office,” he said.

Mr Nweze stressed that the reason for going into government should be to serve the people and not for self-enrichment.

“There should be a token after service and not to stipulate the number of houses you should have or how many cars you should get,” Mr Nweze said.

He further suggested that all governors should be paid a certain amount of money as retirement benefit and be taught financial management to ensure that they could manage the funds well to set up something that they could generate money with.

Okupe Defends Jonathan’s Process of Ministerial Appointments

Special Adviser to the President on Public Affairs, Mr Doyin Okupe, today defended the nomination and sack of ministers by President Goodluck Jonathan.

Mr Okupe, speaking from Channels Television’s Abuja studios, insisted that before the President makes his appointments, he certifies “that this person (nominee) is of a good quality, a good calibre and must possess a reasonable intellect, loyalty and patriotism to serve his country.”

Okupe explained that in a parliamentary system of government, members of parliament are mandated to supervise different ministries “that has nothing to do with their profession.” He added that “a man that is qualified, a graduate with good experience; that has distinguished himself in the society and has some sense of loyalty can run any ministry.”

Mr Okupe also vehemently stated that “anybody running a ministry, is not running it by himself, he is running it for and on behalf of the President who has appointed him…he carries on the programme of Mr President.” He emphasized that “each minister is a representative of the President in his ministry”.

Meanwhile, a legal practitioner, Mr Tokunbo Odutola, speaking from the Lagos studios of the multiple-award winning television station, agreed with Mr Okupe on the selection process but was quick to add that the appointment process was “a three pronged process”.

These processes according to Mr Odutola, are the taken from the “legal, political and moral” perspectives. He explained that the legal aspect, as enshrined in the constitution, is for the President to make sure he appoints ministers with each state represented amongst the nominees.

The political provision, he added, allows the President to assign whomever he so wishes to a ministry “because it is his team” and such “reflects on whom our President is”. On the moral aspect, he said that this has to do with the person being nominated, who must be screened to ensure that he or she had not been involved in any criminal activity.

On the newly nominated ministers, he expressed the view that 2015 being just around the corner, “the President would not want to pick anybody who cannot make sure that, if he intends contesting in 2015, he can help him or his party.”

Earlier in the week, one of the ministerial nominees, Mr. Oyewale Adesiyan, from Osun State, told the Senate that he had been wrongfully accused of having a hand in the murder of a former Attorney-General of the Federation and Minister of Justice, Chief Bola Ige, who was assassinated in his Bodija home, in Ibadan, Oyo State on December 23, 2001, a case for which he was in jail for three and half years.

Although, Adesiyan claimed that his implication in the death was a ‘political blackmail’ by enemies, Mr Odutola said that “morally, the candidate should be dropped”.

Responding to questions from Channels Television viewers via Twitter on whether the President was making the decision to sack some ministers at the right time, Mr Okupe noted that this was “a preposterous question”. He wondered why “Nigerians would vote for a man, if he does not have the capacity to decide what he wants to do, and when he wants to do it.”

He further noted that “the President is the captain of the boat, he knows where he is leading the boat to, and he knows the kind of staff that he needs to assist him to get there.” He insisted that those ministers who were dropped were still useful and they have done nothing wrong.

Cabinet Shuffle: President’s Political Life At Critical Stage – Nweze

A lecturer at the Pan Atlantic University, Austin Nweze, has attributed President Goodluck Jonathan’s decision to sack four ministers, including former Minister of Aviation, Stella Oduah, to the current status of the President’s political life, which he described as in a critical stage.

“This is a critical period in the President’s political life because of 2015 and just like we say we in business, it’s not those that help you start a business that will grow the business,” he said, adding that “it’s about time this change was made to enable him begin to look at 2015.”

Another reason he gave for the shake-up was a policy shift in what the administration wants to achieve which would necessitate the injection of new persons into the system.

“It’s normal in the life of any administration that at some point you need new ideas, new people that can add some variant into the policy implementation.”

He further urged the President to have fewer politicians and more technocrats in his cabinet, in order to help him make the economy better than it was.

“The economy is going to play a role in the next election so you need people that can really drive this economy and come up with policies that will turn around events to enable him be in a better state for 2015.”

Commenting on arguments that some ministries are not needed, especially the Ministry of Police Affairs and Ministry of the Niger Delta, Mr Nweze submitted that “the size of government is huge for our size of economy, so anything to trim down” is welcome.

According to the analyst, the creation of the said ministries was a duplication of already existing agencies handling similar tasks.

Asked if some of the ministers would be invited for questioning by anti-corruption agencies since they had been accused of corrupt practices whilst in office, Nweze said “it depends on what they do after now.”

He highlighted that the trend is that when a public officer leaves office and maintains a low profile, he or she is left alone. He however warned that “if other interests are at variance, like if you defect, you’ll see the agencies of EFCC and ICPC coming after them.”

APC’s Distrust Of National Confab Is All Politics – Prof. Nweze

A public affairs analyst and Professor at the Pan Atlantic University in Lagos, Austin Nweze, on Thursday said that the All Progressives Congress is only playing politics by saying it has no trust in the proposed National Conference initiated by President Goodluck Jonathan.

The opposition party, particularly the APC, has voiced its distrust in the process but

Prof. Nweze insisted that it is all politics.

“There’s politics in this. Like the opposition saying that they don’t trust this man (Jonathan), it’s all about politics,” he said, adding that “the situation in Nigeria is so critical today that it should not be left in the hands of politicians alone.”

While speaking on Sunrise Daily, he stressed that the Conference is a “great opportunity for us to really restructure this nation,” adding that Nigerians need to show courage and take the risk.

The National Dialogue which many have clamoured for would not only help the citizens to discuss on how they want to be ruled, it will be a legacy recorded for President Jonthan should it hold, Nweze opined.

“If I were the president I will make sure that it holds because it will do him a lot of good. That’s the legacy he will leave for Nigerians beyond 2015 even if he doesn’t contest.”

Speaking on the timing of the Conference, which many have dubbed ‘wrong’ as it is too close to 2015, the election year; Prof. Nweze said he had no problem with it as it is long overdue.

Speaking on the level of representation, Prof. Nweze stressed that the middle class in any society is largely saddled with determining the way forward for the nation.

“The middle class determines the direction for the nation and thereafter “communicate with the grass root, to support, for that nation to move forward.”

Although he expressed belief that the National Dialogue would be a means of addressing issues bedeviling the nation but added that it may not change as the nation may return to status quo. “‘Self-interest’ would be a major problem,” Nweze emphasised.

He admonished politicians to put aside their political leanings for the benefit of the nation.

Analyst Examines President Jonathan’s Responses During Media Chat

A public affairs analyst, Professor Austin Nweze on Monday analysed some of the responses given by President Goodluck Jonathan during Sunday’s Presidential Media Chat.

On Sunday, the President made statements which have been the source of controversy among Nigerians; one of which is his comment about Boko Haram’s leader, Abubakar Shekau’s. The President was asked if the terrorist is alive or dead and he responded by saying he wasn’t aware.

Speaking on Channels Television’s Sunrise Daily, Mr Nweze said the President was just “being honest” but that his statement revealed “lack of communication, maybe trust, in information that his lieutenants” give him.

Mr Nweze did not rule out the option of deceit on the part of the terrorist group as the said video of Shekau claiming he’s still alive as reported by the BBC Hausa service could be pre-recorded.

Mr Nweze who said that Nigerians expected a response which would give them hope of Shekau’s death added that “there is confusion everywhere about his death” adding that “whether dead or alive, you can kill him but have you killed the idea behind it?” he asked.

Citing other terrorist leaders, Mohammed Yusuf and Osama Bin Laden, he said “until you arrest the idea behind it, there’s no way you can completely wipe out terrorism”.

He also called for a re-orientation and a new focus of battling the idea behind the insurgency.

The JTF statement which declared the terrorist dead was also questioned as the release because the JTF expressed probability that Shekau had died and went further to say he died.

Mr Nweze said the uncertainty in the statement could have been a communication error.

On the on-going ASUU strike, which the President said has gone political; Mr Nweze said President Jonathan is trying to play safe.

He opined that the government is no longer interested in funding the education and health sector and advised university authorities to innovate ways of generating funds internally.

Nweze Attributes NEMA Vs LASEMA Feud To Misplaced Ego

A Professor of Communications with Pan Atlantic University, Austin Nweze, has attributed the feud between National Emergency Management Agency (NEMA) and Lagos State Emergency Management Agency (LASEMA) to egos and not conflict of protocol.

Speaking on Sunrise Daily after an heated exchange between directors of the two agencies, Prof Nweze described the fracas as a ‘microcosm’ of what is obtainable in the larger society and amongst government agencies in the country.

“They are not synchronized,” he said, adding that “it’s all about ego, self-interest and who gets what.”

LASEMA had recently ordered the removal of NEMA officials from the scene of a collapsed building in Lagos to the chagrin of the national emergency agency. The two agencies are also disagreeing on who is suppose to address the media during an emeergency situation in the state where they are both rescuing victims of disasters.

According to the Professor, the clash is largely egocentric as LASEMA is reported to have complained of being relegated by the federal agency, on its own turf.

This is a problem of communication, Prof Nweze explained.

He noted that the two agencies barely communicate with each other, which is why there is problem between them.

In the case of any emergency, “there has to be one person that would be appointed to disseminate information” and the state agency should “decide who should speak to the press at each point in time. This is to avoid conflict and dissemination of wrong information.

“It’s not everybody that should come and begin to talk to the press. It is not right” he said.

Prof Nweze also noted that, although NEMA is allowed to respond to emergency situations in the whole country, the agency should restrict itself to a supportive role since there is a state based agency as well. “The federal is to assist and support the Lagos counterpart.”

He however cautioned both agencies to set their priorities correctly as “in any emergency, the primary concern should be the lives of the people” and not “who got there first to save the lives.”

 

Analyst wants Economic Summit Group to develop competitive strategy

A public affairs analyst and lecturer at the Pan African University, Austin Nweze on Tuesday said the National Economic Summit Group (NESG) is yet to develop a clear competitive strategy that will make Nigeria one of the top economies in the world.

Mr Nweze, who was a guest on Channels Television’s programme, Sunrise Daily, said since Nigeria’s economy dominates others in West Africa, the country needs to develop a strategy that will show this dominance.

“I want them to come out of this Summit with a clear strategy that two three areas where Nigeria can compete,” he said.