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The Crawling Giant by Cynthia Akpomudiare

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Moody’s Investors Service on Wednesday November 8 downgraded the Government of Nigeria’s long-term issuer and senior unsecured debt rating from B1 to B2 and the senior unsecured MTN program rating and the provisional senior unsecured debt rating from (P)B1 to  (P)B2 though the  rating outlook remains stable.

The downgrade by Moody was based  on three factors: increased external vulnerability, budget execution risks, and elevated interest burden and the following could change the rating up: Positive pressure on Nigeria’s issuer rating could be exerted by: (1) the successful implementation of structural reforms, particularly with respect to public resource management and the broadening of the revenue base; (2) material improvement in institutional strength with respect to corruption, government effectiveness, and the rule of law; (3) the rebuilding of large financial buffers sufficient to shelter the economy against a prolonged period of oil price and production volatility.

In like manner the following could change the rating downwards: Nigeria’s B2 issuer rating could be downgraded if Moody’s concluded that the sovereign’s exposure to a financing shock had materially increased, perhaps because of (1) continued erosion of debt affordability or a material deterioration in the government’s balance sheet in some other respect; or (2) materially weaker medium-term growth, for example as a result of delays in implementing key structural reforms, especially in the oil sector, or continued militancy in the Niger Delta, which undermine the level of oil production over the medium-term.

The Vice President, Prof Yemi Osinbajo, SAN, in San Francisco, on July 11, 2017, declared that the agricultural sector is the way forward for the country’s economy and is an integral part of the country’s plan for sustainable economic growth and development. This view has also been reiterated by the president and commander in chief of the armed forces Muhammadu Buhari in several fora which has culminated in the  set-up the Presidential Council on the Ease of Doing Business to attract local and foreign investors. Federal government is in discussion with Carlos, a Mexican agro-business with huge investments in South America to partner with Wells Farm based in the south-south and replicate in the other geopolitical zones in the country.  There is already a paradigm shift of seeing Agriculture not as a development programme but a business.

The key driver for the downgrade by Moody was however the “unsuccessful effort at broadening the non-oil revenue base,” an action taken by the Federal Government to address the key structural weakness exposed by the oil price shock. The consequence of this is that while debt levels remain contained notwithstanding recent cyclical improvements, the government’s balance sheet remained structurally exposed to further economic or financial shocks, with very high interest payments relative to revenues and deficits elevated despite cuts in capital spending. These rating signals the likelihood of increased interest element to future borrowings especially since the country requires heightened spend on infrastructure which it plans to finance through foreign loans. Making such loans more affordable will require that the government broadens the current tax base. But how has the government performed on its revenue collections so far? The Treasury Single Account (TSA) introduced in 2015 was primarily designed to bring all Government funds in bank accounts within the effective control and operational purview of the Treasury, in order to enthrone centralised, transparent and accountable revenue management amongst other things. However, in spite of successes recorded by the TSA, there is still a huge lacuna between actual tax collections and remittances to this account.

Do share your thoughts via email at aviga@cbinigeria.com, on Twitter @CBiNGR, @PINS2015 with the hashtag #TheCrawlingGiantNG

Equity Before Equality by Kemi Asuni

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The recent recession in Nigeria, and the continuing economic depression has had dire consequences for business. Costs of production have escalated and the demand for goods and services has reduced, coupled with higher interest and unfavourable foreign exchange rates to mention a few of the resultant effects. The populace, as a result of the recession has had to adjust in terms of spending patterns because of reduced cash flow, job losses, or had their salaries delayed. The poor have been more adversely affected. With poverty levels generally higher than before, women, children and vulnerable groups who make up the larger part of the poor in Nigeria are the most affected.

In Nigeria, about 49% of the population are female and at least half live in poverty, particularly in the rural areas. According to UNWomen (2017), empowering rural women and women in agricultural supply chain is a pre-requisite to fulfilling the vision of the UN’s Sustainable Development Goals that aim to end poverty and hunger, achieve food security and empower all women and girls.

Oxfam, in its gender interests, believes that empowering women to participate in the economy is essential to building stronger economies, achieving internationally agreed goals for development and sustainability, and improving the quality of life for all. In relation to this, Oxfam Nigeria, together with The Convention on Business Integrity (CBi) Nigeria have launched a report and a social media engagement campaign tagged “Equity First, Equality Next; Closing the Opportunity Gap for Women, 2017”  to advocate equity  for women based on the UN Women’s Empowerment Principles (UN WEPs) and find ways to leverage Nigeria’s female talent pool for equity in the community, workplace, and marketplace particularly for women in relevant agricultural value and supply chain of large Food and Beverage (F&B) companies, given their dominance and influence in the economy, and international leverage and to see the impact their local sourcing policies on women. Agriculture is an area where women feature as farmers and workers, largely adding value to the produce. However, there is not much recognition in terms of income or power due to gender disparities.

Gender component has become an important element in many development interventions. CBi/ Oxfam just conducted an impact assessment of an intervention project in the value chain and Agricultural supply chain of large Food and Beverage (F&B) companies in Nigeria, wherein gender sensitivity is an element.

In other words, gender equality refers to equal access to social goods, services and resources and equal opportunities in all spheres of life for both men and women. When there is gender inequality, it is women that are more likely to be disadvantaged and marginalised; for example, women are said to comprise about 50% of the labour force in Agric, however, several statistic in Nigeria has shown that revenue from women engagement in Agric scarcely goes to them due to societal norms regarding culture, tradition, religion and otherwise. Therefore gender equality is the concern of all and changes must be brought about for both men and women. However, this is not to say that men and women are equally affected by gender inequality. It remains true that women have the greater share of disadvantages.
Based on the foregoing, it is imperative for manufacturers especially large Food & Beverage companies in Nigeria to ensure equity for women (especially those in rural areas) in their Agricultural supply chain and consequently gain competitive advantage through local sourcing of agricultural raw materials from women.

Nigeria: Crummy Education @ Crunch Time by Kitan Babalola

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To facilitate quality education, the United Nations has recommended that for any country to achieve quality basic education for all, at least 20% of the national budget must be allocated to education. Developing countries like Nigeria, are advised to allocate more (about 30%) in order to close the financing gaps in the sector and access more results. Also, the United Nations Children Education Fund (UNICEF) has further highlighted that features of quality education include:[1] Continue Reading

Revamping Nigeria’s Rural Agricultural Economies by Soji Apampa

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Cattle Herders

Newspapers are replete with the alarming stories of Fulani herdsmen/farmers[1] or Fulani herdsmen/community[2] clashes. The clashes have often resulted in condemnable, criminal, barbaric acts that have largely gone unpunished by the authorities and have led to calls for a ban on open grazing of cattle in states like Ekiti and Benue;[3] calls for the establishment of ranches by 11 Northern States;[4] and resistance to a National Grazing Reserves Establishment Bill (2016)[5] from everywhere but the far North of Nigeria. As serious as the issue is, no one seems to have proffered a satisfactory response. Continue Reading

2018: Next Challenge for Inclusive Business in Nigeria by Soji Apampa

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So far in Nigeria, the term “inclusive business” is not well known since most have come into it quite by accident. In trying to create local sourcing strategies for raw materials such as agricultural produce, following restrictions on import of such commodities, many companies have now set up business models with the poor as producers and in the food and beverage industry particularly, they have also adopted models with the poor as consumers.  For even the largest players, this is not an area where they have a great deal of experience. Continue Reading

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