Tuesday, 26 April 2016

Nigeria and the Chinese Trojan Horse

China is investing billions of dollars in Africa but Beijing has been accused of exploiting the continent’s vast mineral and energy resources at the expense of local people.
China has been Africa’s biggest trade partner since 2009. Bilateral trade stood at just under $11 billion in 2000, by 2006 this figure had jumped to nearly $60 billion and last year bilateral trade had soared to $210 billion.
Sino-Nigeria trade volume in the last one year hit $14.94 billion, while China’s non-financial direct investment to Nigeria stood at $1.55 billion by the end 2015.
The trade volume is always in favour of China. Nigeria remains the largest market for Chinese contracted projects, the second largest market for Chinese exports and the third largest trading partner in Africa.
Chinese investment in African countries has also risen some thirty fold in the past ten years. Foreign direct investment went from $500 million in 2003 to almost $15 billion by 2012. And last year, China pledged $20 billion in loans for infrastructure development.
Across our vast continent, there is rising prosperity and terrible poverty, responsible governments and total lawlessness, lush fields and forests and drought-stricken states.
Chinese companies, many of them state-owned, responding to their own immense domestic demand for natural resources, are buying up concessions for African mines and forests.
Since 2005, China’s direct investment across Africa has increased thirty fold, and by 2009, China had replaced the United States of America as Africa’s largest trading partner.
In all of these, a pattern developed: Chinese companies would enter a market and sign lucrative contracts to extract resources and ship them back to Asia. In return they built eye-catching infrastructure projects like soccer stadiums and superhighways. They even built a massive new headquarters for the African Union in Addis Ababa, Ethiopia.
There was no doubt that these projects have been welcomed by many African leaders and that the Chinese are helping modernize infrastructure in a continent where just 30 percent of the roads are paved. But the Chinese brought their own labourers rather than hire local workers who needed jobs and sustainable incomes, and they paid little attention to the health and development challenges Western nations and international organizations worried about.
I think rather than jubilate over the propose $2b loan from China and the so called Yuan trading deal with Nigeria, Nigerians should because suspicious and read the fine details.
China wants to lend us two billion dollars, but they want to give us in Yuan and not the dollar itself. They are not handling us cash, but service exchange; meaning whatever we want to buy, we buy from Chinese company and they pay the company on our behalf.
If we want to new airport or roads, they will construct them for us and take the money out of the “loan”. In essence, we would have signed off all our capital spendings to China, without the opportunity opening such projects to competitive biddings. Chinese construction workers will then flood Nigeria, as they have always done. They dictate the price and pay the bills on our behalf. At the end of the tenor, they probably would execute projects worth half the price and bill us two billion dollars with rising interests.
Many Nigerians don’t know that even Chinese company don’t want Yuan. The renminbi is an artificial currency that does not carry its real value at anytime, so nobody wants it. Chinese foreign reserve is in dollars with China being the largest holder of US bond.
Nigeria must by all means be careful the kind of loan deal it signs with China so as not to mortgage the future of its unborn generations. African leaders must also review Chinese investment on the continent. Over the long run, investments in Africa should be sustainable and for the benefit of the African people.
Sino-Africa relationship is anything but a win-win. It is heavily skewed in favour of the Chinese and one hopes it won’t be too late before African leaders wake up to this reality.

Tuesday, 19 April 2016

Sorrows, tears and fuel

But for the bravery of a petrol tanker driver and a conductor, the nation’s number one airport, the Murtala Muhammed International Airport, Ikeja, would have turned into a disaster zone at the height of the petrol crisis about two weeks ago.
The driver of a fully-laden petroleum tanker put his life on the line by driving his contraption far away from the midst of others awaiting loading at a petroleum jetty around the airport after discovering that it had caught fire.
Had he not acted in good time, the fire would have spread to other tankers and a major tragedy would have befallen the nation. Even at that, the fire razed three other tankers and a stationary saloon car. But the airport was spared and no live was lost.
But a father and his two daughters were not as lucky as they lost their lives in an inferno – another aftermath of the fuel crisis – on April 6 in Lagos. Indeed that fateful Wednesday witnessed a harvest of tragedies across the Lagos metropolis as five persons were killed in separate fire incidents in Shomolu Oja and Ikotun areas of the state.
Alhaji Kamorudeen Ajibade, 65 years old; his daughters, Wuraola, 19 years old, and Shakirat, 15-year-old, were consumed in an explosion at about 10pm at Shomolu Oja while the man was trying to refuel his generating set to provide electricity for the family since national supply is practically non-existent.
The children died trying to rescue their father who got trapped after the explosion as he tried to refuel the family generator. Luckily his wife, Rachael Ajibade, was able to escape the inferno with the last child of the family.
The deceased’s younger brother, Oriade Ajibade, captured the reasons for the unnecessary deaths declaring that, “If there was no fuel scarcity, this could have been averted. It was the fuel scarcity that caused the incident.”
No fuel, no light. Welcome to 21st century Nigeria.
I remember a very good friend and former Principal Manager, Legal, Western Ports of Nigerian Ports Authority, Mrs. Lucy Damachi-Itam lost her life in the same manner last year. A very jovial and unassuming woman, Lucy was one of the driving forces behind the Women in Logistics and Transport (WILAT) and the now-scrapped Port Industry Anticorruption Standing Committee (PIACSC). She departed in a most tragic manner, leaving behind an only son, whose father died few years earlier. If she didn’t have to be her own electricity firm, Lucy would still be alive and kicking.
The same day Alhaji Ajibade and his daughters died, a bed-ridden man seeking spiritual cure at the Synagogue Church of All Nation was also burnt to death in a hotel in Ikotun area.
Because there was no light and the hotel did not have fuel to run their generator, the man, identified as Felix Ifeanyi, reportedly lit a candle. After going to bed, the burning candle reportedly fell on the furniture resulting in an inferno that claimed his life.
Same Wednesday in Festac Town, in Amuwo Odofin area of Lagos State, some operatives of the Nigeria Security Civil Defence Corps (NSCDC), opened fire on some youths hawking fuel, killing one of them in cold blood.
The question as to why these reckless officers would use firearms on unarmed youths is still begging for answer. Yet none of these officials have been arrested for the heinous crime.
A day before the harvest of deaths of Lagos, an Army personnel narrowly escaped death on the Oshodi – Apapa expressway after his Toyota Camry saloon car – with a keg full of petrol in the boot – exploded. He was lucky to jump out of the car before the explosion.
On Friday of the same week, seven people also lost their lives in Akwa Ibom State as a result of a fire incident caused by poor storage of fuel. The inferno, which occurred at about 2am in Uyo, claimed the lives of a woman, her three children and three grandchildren of the landlady of the compound where they lived.
The landlady, Monica Effiong, and a tenant, Emmanuel, were fortunate to have been rescued alive.
In one week therefore, fuel scarcity in Nigeria claimed at least twelve lives with many other homes thrown into grieves.
Nigerians are groaning in pains. No light. No fuel. No money.
Without reliable and steady power supply, ours has become a generator-driven economy, so without adequate fuel supply, the real sector goes into a slumber. Little wonder youth unemployment is high. And with high youth unemployment, security of lives and property becomes a huge challenge.
Aside those who lost their lives under these tragic circumstances, many more have died economically while the country’s fuel and electricity crises persist.
It is good President Buhari says he is aware of the pains of Nigerians. But this is not enough. Nigerians want an end to their miseries.
The Boston Consulting Group recently ranked Nigeria 142 out of 149 countries in its ability to convert wealth into well being for the citizens. This highlights the urgency to address challenges for the country to prosper over the long term. Nigeria is badly in need of policy actions that can put the country back on the path of sustainable growth. Economic magicians are needed urgently.

Tuesday, 5 April 2016

As Nigeria descends into darkness again

Nigerians have been through very tough times these past six months. Last week’s Easter was observed with little or no activities by many families across the country largely due to economic hardship. It was Easter in darkness – no light, no money to buy food and no fuel to power generators. Many spent their Easter holiday on fuel queues at the petrol station. To compound their woes they paid more than twice the official rate to acquire much-needed premium motor spirit for vehicles and generators. The fuel scarcity was exacerbated by the careless and reckless comments credited to Minister of State for Petroleum, IbeKachikwu, who declared that fuel scarcity would persist for another two months.
Confronted by a battalion of reporters to tell them when he hopes the nation would get out of the latest cycle of fuel crisis, the minister, who doubles as the helmsman of the national oil corporation blurted out: “One of the training I did not receive is that of a magician, but I am working very hard to ensure some of these issues go away”. Amazing, isn’t it? He has since recanted though but the situation is not any better.
Worse still, Nigerians – thanks to Minister BabatundeFashola – are compelled to pay 45% more for the electricity they hardly get to use.
Few weeks into his Presidency, every sector of the economy sprang back to life. The naira firmed up to the dollar and other major currencies. Fuel queues disappeared, even without payment of the contentious fuel subsidy by the federal government. The nation’s major refineries located in Warri, Kaduna and Port Harcourt all sprang back to life collectively churning out over 10 million litres of petrol daily, representing a third of local consumption needs.
Shouts of “Sai Baba”, “SaiBuhari” rented the air as Nigerians hailed their choice of new president.
Electricity became stable in many parts of the country with power generation hitting 4,500 megawatts – an unprecedented high from an abysmal low of 750MW inherited from his predecessor.
Piracy, oil theft and other criminal activities on our waterways plummeted. Zero attack was recorded on the nation’s waterways during this period. The story is now different. Pirates are back in their full element. Oil theft is no longer worth the risk so they hijack ships and hold crewmembers for ransom. No fewer than four ships have been attacked this year with sailors taken hostage. They target all vessel types including containerships, tugs and oil tankers.
The naira has suffered the worst attack in its history, exchanging at 320 to the dollar. What is more, there is dollar scarcity, no thanks to a steep drop in foreign exchange earnings. Trade is suffering due to inability of importers and exporters to access foreign exchange. Volumes across our ports have dropped by more than 35% with attendant job losses across the spectrum. In the aviation sector, local airlines are groaning while the foreign ones have doubled their charges. The manufacturing sector is in a state of coma as several manufacturers have closed shop. They simply cannot cope with the multiple challenges of lack of access to foreign exchange, lack of electricity, lack of fuel and stifling government policies. No fewer than five million jobs are at stake.
Our stock market has sank to the bottom of global ranking, emerging one of the worst in the world with a daily loss of billions of naira as foreign investors pull out their funds.
Civil servants and public officers are not left out of the hardship, as at least 27 of our 36 states struggle to pay salaries to their workers.
At 11.38%, inflation is now at a five-year high. The purchasing power of Nigerians has been dreadfully impaired.
At USD27.88billion, there are concerns over the rapid depletion of the nation’s external reserves, from which the Central Bank of Nigeria pulls funds to defend the national currency.
On the security front, Nigerians are still to experience much-needed change. While major successes have been recorded against insurgents of the Boko Haram stock, kidnappings and killings of several innocent Nigerians remain sore points for the administration. High level of youth unemployment, incessant clashes between Fulani herdsmen and their host communities and suicide bombings in parts of the Northeast require new creative thinking by the present administration.
The situation of the country at present reminds Nigerians of the dark days of the Jonathan administration. It is hard to forget Jonathan’s last Monday in office. 25th May 2015 was the day Nigeria was practically brought to its knees by the skullduggery and ineptitude of that administration. It was a black day that would be permanently etched on the psyche of many Nigerians. That day was a fitting description of everything Jonathan’s five-and-a-half year regime typified – total darkness. We all remember how banks had to shut down their operations, no light, no fuel, no money.
Nigerians yearn for complete departure from that past.