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Wage increment essential to Nigeria’s economic growth – Prof. Daron Acemoglu

Daron Acemoglu at First Bank’s anniversary lecture gave tips on how Nigeria can accelerate economic growth

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Daron Acemoglu Economist, Massachusetts Institute of Technology, First Bank of Nigeria 125 years anniversary, President Buhari, Eko Hotel

Turkish-born American Economist, Daron Acemoglu, has argued that in order for the Nigerian economy to grow faster, there’s a need for the Government to prioritise wage increment and the creation of employment for its citizens.

Acemoglu stated this while giving a lecture to mark First Bank’s 125th anniversary celebration event, which was held at Eko Hotels & Suites, Victoria Island, Lagos.

The notable Economist was speaking on the theme: ‘Institutional Impact on Economic growth and Improved Living Standards.”

He emphasized that job creation and other elements such as good health and education, are needed to achieve high-quality economic growth in Nigeria. According to him, if these issues can be addressed properly for the benefit of the country, it will have a ripple effect on the economy.

Daron Acemoglu addresses barriers that prevent growth

Three barriers that prevent growth: For Acemoglu, improving the living standard of Nigerians encourages better productivity which positively rubs off the Nigerian economy. He, however, stated that there are three barriers to high-quality growth around the world – Automation, institutional slide, and international linkages.

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The impact of technology is determined by the users: Acemoglu said the use and shortage of automatic equipment in manufacturing threatens employment rate especially in the developing countries. Though it has not yet been fully incorporated into businesses in Africa, it still poses a threat.

The Author of ‘Why Nations Fail’ urged Nigerian businesses to embrace technology fully into its operating system if the country’s other key sectors are to develop and reduce the dependency on the oil sector.

Acemoglu said the fear of technology cutting employment rate among developing countries has contributed to the slow growth of sub-Saharan Africa. Contrary to popular opinion in Africa, He said technology does more good than bad to the economy.

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According to Acemoglu, the impact of technology on a country depends on how it is utilised by the country itself. He said technology doesn’t control people, rather people control technology, and the benefit is enormous if properly utilised by the country.

Though, he acknowledged that technology is taking over manufacturing and production work, but it increases the availability of labour for other sectors, adding that technology is not meant for the developed world alone.

“We need to be completely open in embracing and BEING enthusiastic about technology.”

While on the impact of institutional slide on the economy, Acemoglu said the constant changes in the system of government in Africa has hindered the growth of the continent. Advising that the State and the society have to be on a common ground to achieve high-quality growth for their economy.

In his remark, Acemoglu said there’s a need for African leaders to know how to handle international pressure and how to utilise international opportunities for the growth of their economy.

Daron Acemoglu’s profile

Daron Acemoglu is Elizabeth and James Killian Professor of Economics in the Department of Economics at the Massachusetts Institute of Technology. He has received a BA in economics at the University of York, 1989, M.Sc. in mathematical economics and econometrics at the London School of Economics, 1990, and Ph.D. in economics at the London School of Economics in 1992.

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He is famous for his book, Why Nations Fail: The Origins of Power, Prosperity, and Poverty (co-authored with James A. Robinson).

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Olalekan is a certified media practitioner from the Nigerian Institute of Journalism (NIJ). In the era of media convergence, Olalekan is a valuable asset, with ability to curate and broadcast news. His zeal to write was developed out of passion to shape people’s thought and opinion; serving as a guideline for their daily lives. Contact for tips: [email protected]

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Hospitality & Travel

US imposes $15,000 visa bond on 15 African countries, others

The US has issued a visa rule requiring tourist and business travelers in some countries to pay a bond of up to $15,000 in addition to the visa fees.

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Berger Paints' improved margins ride on the back of cost efficiency

The outgoing administration of US President, Donald Trump, on Monday, November 23, 2020, issued a new temporary visa rule that requires tourist and business travelers from 15 African countries and others to pay a bond of up to $15,000 in addition to the visa fees, which ranges from $16 to $300, in order to visit the United States.

According to TheCable, the US State Department said the visa bond pilot programme, expected to take effect from December 24 and end on June 24, 2021, is targeted at countries whose citizens have higher rates of overstaying B-2 visas for tourists and B-1 visas for business travelers.

The Trump administration said the six-month pilot program aims to test the feasibility of collecting such bonds and will serve as a diplomatic deterrence to overstaying the visas. Hence, overstay places significant pressure on Department of Justice and Department of Homeland Security.

The visa bond rule will permit U.S. consular officers to request tourist and business travelers from countries whose nationals had an overstay rate of 10% and above in 2019 to pay a refundable bond of $5,000, $10,000, or $15,000.

The countries whose tourist and business travelers fall into this category and subjected to the bond requirements are 24 countries, including 15 African countries. While these nations had higher rates of overstays, they sent relatively fewer travelers to the United States.

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The countries include Afghanistan, Angola, Bhutan, Burkina Faso, Burma, Burundi, Cape Verde, Chad, the Democratic Republic of the Congo (Kinshasa), Djibouti, Eritrea, the Gambia, Guinea-Bissau, Iran, Laos, Liberia, Libya, Mauritania, Papua New Guinea, Sao Tome and Principe, Sudan, Syria, and Yemen,

Nigerian travelers escaped paying the temporary visa rule, as their overall score was below the threshold of 10% and above overstaying rate.

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Economy & Politics

Senate approves issuance of N148bn promissory notes to Bayelsa, 4 others

Promissory notes worth N148,141,969,161.24 has been approved by the Senate as refund to Bayelsa, Cross River, Ondo, Osun and Rivers States

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Senate approves issuance of promissory notes worth N148 billion as a refund to five states

Promissory notes worth N148.141billion have been approved by the Senate as a refund to Bayelsa, Cross River, Ondo, Osun, and Rivers States for projects executed on behalf of the Federal Government.

The approval which was given by the Senate at the plenary on Tuesday, 24th November 2020, came after the presentation of a report by the Committee on Local and Foreign Debts, led by Senator Ordia Clifford (PDP-Edo).

According to a news report by NAN, this is a go-ahead to the Federal Government, who had sought the approval of the Senate for issuance of promissory notes for a refund on federal projects executed by State governments.

The request was contained in a letter addressed to President of Senate, Dr. Ahmad Lawan by President Muhammadu Buhari, and read at plenary. The Senate referred the matter to the Committee on Local and Foreign Debts for further legislative input.

(READ MORE: FG inaugurates steering committee on Covid-19 economic recovery)

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Senator Ordia Clifford, while presenting the report of the committee, said the Permanent Secretary, Federal Ministry of Finance; Federal Commissioners of Finance and Works in the five states, had briefed the committee on details of the projects.

He said the Committee was presented with documents relating to the approvals of the Federal Government through the Federal Ministry of Works and Housing for the execution of the projects and certificates of completion, amongst other documents.

At the plenary today, Senator Ordia moved the motion that the Senate approves the Committee’s recommendations by approving the issuance of the promissory notes to the State governments.

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According to him, the amount due to the five states is N148.14billion.

  • Bayelsa was allotted N38.40billion
  • Cross River was allotted N18.39billion
  • Ondo was allotted N7.82billion
  • Osun was allotted N4.57billion
  • Rivers was allotted N78.95billion

What they are saying

The President of the Senate, Ahmad Lawan, disclosed that records showed PDP states had the highest refund, he said: “If you look at the list of states, only two are APC states and they have the least in terms of refund, this is fantastic and a mark of leadership by the Federal Government. This shows tolerance and leadership by this administration.”

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Business News

Interswitch Group becomes Finastra’s lead technology partner in Nigeria

nterswitch Group has unveiled a consolidated partnership with Finastra, one of the world’s most influential Fintechs.

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Interswitch Group becomes Finastra’s Lead technology partner in Nigeria

In a bid to further develop its market and expand, Interswitch Group has unveiled a consolidated partnership with Finastra, one of the world’s most influential Fintechs.

This is according to a verified post by Interswitch Group on Linkedin, as seen by Nairametrics.

What this means

The strategic partnership enables Interswitch to become Finastra’s lead technology partner and will avail the latter the opportunity to bring the broadest set of financial software solutions to financial institutions in Nigeria and across Africa, in conjunction with Interswitch’s strong understanding of the local banking and payments landscape, as well as the ability to deploy solutions across these markets.

Some of Finastra’s financial software solutions that will be incorporated into Interswitch’s digital solution include: Fusion Kondor and Fusion Trade Innovation, which will consolidate Interswitch’s position as a hub for financial solutions, including treasury and trade solutions.

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(READ MORE: 5 Nigerian startups selected to join 7 others at the Africa Tech Summit Connects (ATS))

What they are saying

Commenting on the partnership, the Founder and Group Chief Executive Officer of Interswitch, Mitchell Elegbe, was quoted by Tech economy saying:Our partnership with Finastra is consistent with our strategic growth plan and we both share the vision of deepening access to financial services by providing world-class technology and innovative solutions.

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“The partnership enables Finastra to seamlessly deploy its technology in this market. For Interswitch, we will be leveraging our proven success and expertise in delivering transaction banking solutions to support Finastra in localizing and implementing their technology in this region.’’

On the other hand, the Head of Partner Ecosystem MEA & CIS at Finastra, Hamid Nirouzad, said: “Interswitch has a proven track record of delivering solutions to commercial banks, as well as, a strong understanding of the local banking landscape across Nigeria and sub-Saharan Africa.

“Finastra is committed to providing its solutions to financial institutions across the world, and partnerships such as this will result in successful projects, with rapid delivery at a reasonable cost.”

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