Monday, 23 March 2015

Another hogwash

Director General of the National Automotive Council (NAC), Aminu Jalal was in Lagos a few days ago to explain his council's failure to implement the new national automotive policy and shift in date for application of the additional 35% levy imposed on used vehicles to July 1.
If you ask me, the auto policy was dead on arrival and NAC is a failed federal government agency that has no relevance in modern day economy spectrum.
For one, NAC has collected several billions of naira under the 2% NAC levy imposed by the government. The levy was ostensibly imposed by government to create a pool of fund to develop the local auto industry. Until its suspension in 2011, it is estimated that not less than N50billion must have accrued into NAC's coffers from the levy. What has the agency done with this substantial sum? Where is the auto industry it developed?
It would be recalled that after the Minister of Industry, Olusegun Aganga, misled the President into approving the much criticized auto policy in 2013, several well meaning persons and interest groups warned of a looming danger to the transportation sector. Aganga had promised that by mid-2014, automobile assembly plants in Nigeria would begin to roll out made in Nigeria vehicles which could be purchased at affordable prices by Nigerians and possibly open a new export window for the country.
The grand deception was elevated when on May 29, 2014 Aganga led Stallion Group to present 'Nigerian-made' models of Nissan vehicles in commemoration of the nation's Democracy Day. It was claimed at the time that Stallion's automobile facility in Lagos was targeting to produce 45,000 vehicles annually and production was expected to commence after six months. Nothing has been heard of that promise 10 months after.
The failure of the auto policy is made manifest is the constant shifts in its implementation date. Jalal told us in 2014 that implementation would commence on April 1, 2014. Two weeks to the date, he announced a shift to July 2014 and before anyone could spell NAC, Jalal announced January 1, 2015. In January, he announced April 1 implementation date and early March, he made another volte-face and announced July 1 as the new takeoff date.
So Jalal came to Lagos to explain that the delayed implementation of the policy was to enable local assembly plants more time to roll out their products so as not to create gap between demand and supply.
"We all know that three quarter of the vehicle import is used vehicle, so government did not want to raise the levy on used vehicles before the assembly plants produce more vehicles and the financing scheme is in place. That is why the minister was given approval to delay it until we meet certain conditions. That is why the full levy is not charged on used vehicles," he said.
But truth is Jalal doesn't know anything. Jalal and his boss Aganga are taking Nigerians for a ride. Is he aware for instance that the constant policy summersault he represents is costing this nation dearly?
Does Jalal know that the auto policy has increased the rate at which cars are smuggled into Nigeria? Does he know that Nigerian ports have lost close to 70% of their vehicle cargo traffic to Cotonou Port, and that the vehicles landed in Cotonou eventually find their way into the Nigerian market? Does he know the implication of this trend on Customs revenue and on the income of our port authority, terminal operators, port workers, freight forwarders and haulage firms?
History tells us that this policy will not work. We have gone through this route before and it failed. Why will Jalal and Aganga not listen to the voice of reason?
Do these men understand that the prices of vehicles have already shot through the roof by as much as 40%? For example, a new KIA Piccanto car that sold for about N1.6million before the introduction of the loathsome policy now sells for N2.2million while a Hyundai Elantra which cost N3.3million now sells for N4.9million.
Do they know that this trend will make life a lot more difficult for the common man as the cost of transportation is bound to skyrocket and thus heighten inflation in the country?
Whose interests are Aganga and Jalal protecting really? The interests of Nigerians or of auto importers or Benin Republic?
President Jonathan must live up to his promise of stopping the policy right on its track as he promised a year ago.
The President assured Nigerians when members of the Road Transport Employers Association of Nigeria (RTEAN) visited him in January 2014 that he would not support any policy "that will increase the hardship of Nigerians".
"If that comes up, I will abort it even midway because we cannot come up with a policy that will make Nigerians suffer or pay higher prices for vehicles," were the exact words Mr. President during the visit.

Your Excellency, they won't tell you the truth but it has happened. Aganga's auto policy has increased the cost of vehicles, cost of transportation and the hardship faced by Nigerians. It is time to 'abort' it.

Wednesday, 18 March 2015

Reckless Customs officers

A few days ago, the media was awash with reports of three young Nigerian women who died in a bus that was being chased by operatives of the Nigeria Customs Service.
According to the reports, the three women aged between 25 and 30 years died after the hummer bus in which they were travelling was knocked off the Lagos-Benin highway by an operational vehicle driven by Customs officials.
The commuter bus with registration number EDO AKA 35 LG, carrying used clothes, summersaulted during the mindless pursuit by the Customs officials attached to the Federal Operations Unit, Zone A, Ikeja from one of their checkpoints in Ijebu Ode. The driver of the bus was said to have refused to stop when flagged down at their checkpoint, which resulted in the tragic chase.
According to the driver who survived the accident but lost one leg, when the Customs pick up van could not overtake him, it hit his bus from the rear, causing it to summersault several times into the bush at a place indigenes called J3.
On sensing that the bus had crashed into the bush, the Customs officials beat a hasty retreat to avoid reprisal attack by members of the public who immediately rushed to the scene of the accident.
Three women in the bus died on the spot and the other injured victims were taken out of the bus, writhing in pains from the severe injuries they sustained.
At the time of the accident, there was no policeman or road safety official on hand to assist the victims. Some of the sympathisers at the scene lamented that sometime ago, road safety officials had similarly chased some passengers to their untimely deaths in the same area.
About three days before this tragic incident and precisely on Monday 23rd February 2015, the actions of Customs officers from the same Federal Operation Unit led to the death of two innocent Nigerians with several others wounded at the ever-busy Sango area of Ogun State.
For those who might not know, Sango is a large market and an important road junction located north of the old tollgate on the Lagos-Abeokuta Expressway.
The Customs men were said to have clashed with rice smugglers whom they had chased to Sango motor park and seized from them, a lorry loaded with second hand clothes and 10 cars loaded with rice.
After the seizure, the suspected smugglers were said to have blocked the road to prevent the customs officials from taking away the seized goods. And what did the Customs officers do? They opened fire – shooting indiscriminately in such a densely populated and busy environment leading to the death of a 27-year-old Kogi indigene identified as Ms. Angela Abba.
Abba was preparing food in front of her shop when she was hit by stray bullet on the head. She died on the way to hospital. Three other persons who sustained injuries were rushed to the hospital and one of them died at the hospital.
These incidents, among several others, immediately raise questions about the Customs officers’ use of deadly force, especially in a crowded area with bystanders in the line of fire.
Was the hot chase and ramming into a passenger vehicle a justifiable action, notwithstanding the perceived offence? Was the firing of shots at Sango defensible? Has the response of the Customs hierarchy demonstrated empathy for the relatives of the victims of this irresponsible inconsiderateness?
I think some of these officers are poorly trained in the use of firearms and thereby constitute danger to members of the public and their fellow officers.
Customs officers cannot afford to exhibit a reckless disregard for the lives of citizens while discharging their duties. It is unacceptable that an agency legally empowered to protect Nigerians and their businesses has now won more notoriety for acts of mayhem.
These acts of recklessness must be checked immediately before it becomes the norm. The officers involved in these mindless killings in Sango and the Lagos-Benin Expressway have to be fished out and prosecuted to deter others.
They should be paraded in public – in handcuffs and leg chains – the same way police parades suspected criminals and Customs parades suspected smugglers.

The flip side of devaluation

One of the major mistakes past Nigerian leaders made was to consider the country an oil rich nation. General Yakubu Gowon laid the foundation of this major flaw when he declared, then as Head of State in the 70s, that Nigeria had become so rich her problem was not money but how to spend it.
Nigeria at the time was enjoying a meteoric, oil-fueled economic upturn in the course of which the scope of activity of the Nigerian federal government grew to an unprecedented degree, with increased earnings from oil revenues.
Gowon’s declaration was followed by a rapid increase in corruption, mostly bribery, of and by federal government officials; and although the Head of State himself was never found complicit in the corrupt practices, he was often accused of turning a blind eye to the activities of his staff and cronies. The attitude of government then was: “Here was money – plenty money we have no use for”.
Another decision made by Gowon at the height of the oil boom was to have what some considered negative repercussions for the Nigerian economy in later years, although its immediate effects were scarcely noticeable – his indigenization decree of 1972, which declared many sectors of the Nigerian economy off-limits to all foreign investment, while ruling out more than minority participation by foreigners in several other areas. This decree provided windfall gains to several well-connected Nigerians but proved highly detrimental to non-oil investment in the Nigerian economy.
Fact is Nigeria is not an oil rich nation. We are an oil poor country. Oil poor because we produce two million barrels per day, which translates to daily revenue of $100million at an average benchmark price of $50. Divide this by 170million people and you get an average oil income of 59cents per capita. Compare this to Saudi Arabia, which exports about 10million barrels per day, earning average daily revenue of $500million or $17 per citizen.
Nigeria produces 12, 000 barrels for every one million people, compared to 295, 000 barrels per every one million people in Saudi Arabia.
Now that reality has dawned on us, it is time to reduce leakage and become strategic. Our strategy should be that of import substitution. Not the rhetoric of import substitution as often mouthed by Olusegun Aganga but developing a real strategic action plan that we will all be committed to in the short, medium and long term.
If we import less and export more, we won’t worry our heads about the sliding value of the naira. In fact devaluation would be a blessing.
Currency devaluation basically means lowering the value of ? currency. The value of ? devalued currency then becomes low in comparison with the currency of other nations.
When the value of a currency falls, domestic residents will find imports and foreign travel more expensive. However, domestic exports will benefit from their exports becoming cheaper. Exports become cheaper and more competitive to foreign buyers.
Devaluation therefore provides a boost for domestic demand and could lead to job creation in the export sector. Higher level of exports should lead to an improvement in the current account deficit. This is important if the country has a large current account deficit due to a lack of competitiveness. Higher exports and aggregate demand can lead to higher rates of economic growth.
China for example will be quite reluctant in allowing its currency appreciate against the US dollar. For instance in 1994, China devalued the yuan by a third to 8.7 per dollar. Daily fixing patterns by the People’s Bank of China, the country’s central bank which serve as guideposts for currency trading, show authorities have actively sought a weaker renminbi in recent years.
In April 2014, the Chinese renminbi fell by 0.7 percent against the dollar, taking its year-to-date losses against the greenback to more than three percent and wiping out all its gains of the previous two years.
Exporting nations actively engaged in currency war or competitive devaluation. The idea is to achieve relatively low exchange rate for their currencies.
As the price to buy a country’s currency falls so too does the price of exports. Imports to the country become more expensive. So domestic industry, and thus employment, receives a boost in demand from both domestic and foreign markets. So we can profit from these ‘hard times’ of drop in oil revenue and fall in the value of the naira by simply putting a stop to unnecessary and frivolous importation and exporting more non-oil products.

Monday, 2 March 2015

What goes around, comes around

I was motivated to write this piece by a friend who recently said that when town predators looking for cheap meals are out to destroy the unique innovations of geniuses by resulting to blackmail and petty arguments emanating from poor and bankrupt ideas, such ill and defective expositions must not go encountered.
Probably because I am an occasional visitor, I enjoy riding the London subway but it certainly isn't the most elegant of places. It sometimes reeks of very unpleasant smell and there is little courtesy from the multitude of passengers. The tube is London's version of our 'molue'. But it is a highly sophisticated version.
I once had cause to sit next to a smelly passenger on the tube and it wasn't a pleasant experience at all. There is also the difficulty of shoving far too many people into a confined space and hoping that in some very British way, they would all get along.

The first time I found myself at Victoria train station, I simply could not believe my eyes at the hordes of people trooping in and out. Oshodi is child's play compared to Victoria. The only other place I saw a crowd that size was in Manhattan, New York.
I stood in awe and transfixed for several minutes as I watched the crowd at UK's second-busiest terminus. Victoria Station services nearly 80 million passengers per year. This is an average of about 220,000 passengers daily. It is an organized chaos.

The station was not built for this number of passengers, which results in severe overcrowding. To prevent any dangerous situations like crowds pushing people off the platforms onto the track, crowd control measures are typically in place at the busiest times. This effectively means closing all the entrances to the underground platforms and operating as an exit-only station until the overcrowding is relieved. These measures can last anywhere between a couple of minutes up to several hours.
I read the story of one man who got on the subway train recently and wasn't in the mood for politeness or pleasantries. As another man stood in his way, he shoved him and, so that there was no doubt as to his intent, told him to "Go f*** yourself."
Perhaps the curser thought nothing more of it. He went about his day. He even had a job interview later in the afternoon.

He walked in and, within seconds, began to curse himself. For his interviewer turned out to be the very man he had cursed on the subway. This curser is a system developer – they call them Python developers. I'm sure in the split second; he would have wished he could reverse the hand of time.
However, as Matt Buckland told the BBC: "It was totally awkward."
Buckland was the interviewer. He is the head of talent and recruiting for Forward Partners – a venture capital company that offers money to fledgling entities. You'd imagine he might have been tempted, in this job interview, to reciprocate the developer's morning greeting.
Instead, he admitted to the BBC: "I approached it by asking him if he'd had a good commute that morning. We laughed it off and in a very British way I somehow ended up apologizing."
Millions got to know of the story when Buckland twitted: "Karma - the guy who pushed past me on the tube and then suggested I go F myself just arrived for his interview...with me..."
The developer didn't get the job because he wasn't, according to Buckland, quite right for it. Might his predilection for ill temper have contributed to him not being right for it? Buckland didn't say.

Back home, my observation is that many Nigerians lack courtesy. And by courtesy I mean the use of polite manners. A courteous person is respectful and considerate of others. Courteous behaviour basically requires a selfless attitude and can give perspective on others' situations.
I have read and observed that people who lack courtesy may have trouble with their family relationships, friendships and in their occupation. Showing unconcern for the feelings of others, a critical attitude and inconsiderate behaviour creates an atmosphere of tension and frustration, according to a leading psychologist, Carl Pickhardt.

One cannot but note the utterly rude behaviour of so-called 'maritime experts' and 'stakeholders' who mostly speak out of tune. Their relevance is in the noise they make and the darts they throw at others. They know 'everything'! They are so-called shipping experts, maritime experts, port experts, financial analysts, administrative expertsand what have you all rolled in one. Never mind that they never had any training or held any position of responsibility in any of the areas they claim expertise. And they can be uncouth in their utterances. No courtesy, no decorum; only pecuniary and mundane interests. They forget that being outspoken is not the sum total of wisdom.
The starting point for government and serious minded businesses in the shipping sector is to ignore these predators for whatever it is worth.

And again, as it happened with the Python developer at the London subway, it is a matter of time before they are trapped in their own devices.