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Columnists

Nigeria: Its many visions, plans and budget

Why did Nigeria get a “Keke Marwa” when she wanted a car? Well, Nigeria never planned for a car; she just had a vision for a car.

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You are working for Nigeria, not for personal interests, Buhari warns MDAs, This is how much the Federal Government borrowed from Pension Funds in 2019, Increased productivity and higher employment rate required for inclusive growth - IFC , Of visions, plan and budget,FG to review petrol price in April, President Buhari holds National Security Council Meeting with IGP, Defence Minister, VP, and others, President Buhari issues stern warning to hoodlums in his state of the Nation address to Nigerians,

In 1980, the Federal Government decided that a local car should be built; they chose four organizations to build the car – Kwara State Polytechnic Ilorin (KSP), Ahmadu Bello University (ABU), Zaria, PRODA in Enugu and ADDIS Engineering Company in Lagos.

KSP was to design and construct the chassis and body of the vehicle, ABU was to design the engine, while PRODA and ADDIS were to assemble the car. KSP not only designed and constructed the chassis and body of a 3-wheel vehicle, but went on to assemble and test drive the 3-wheeler. No… not a typo, a “Keke Marwa!”

Why did Nigeria get a “Keke Maruwa” when she wanted a car? Well, Nigeria never planned for a car; she just had a vision for a car.

Of visions, plan and budget

A new government came in and the car vision was abandoned. What has been the effect of this lack of locally manufactured cars? As at 2019, Nigeria had a N1.08 trillion import bill for used cars and motorbikes. Had the country devised a plan to continue to fund the Nigerian car vision from 1980, maybe she would have created a local Keke industry.

In managing any organization to deliver success, there is a process. The process starts from articulating a Vision to a Strategic Plan, and then an Annual Budget.

[READ MORE: Budget Review: Several infrastructure projects stalled)

Nigeria? Well, Nigeria has the Vision 20:2020, which has a 3-year strategic plan, the Medium-Term Expenditure Framework (MTEF) and the Economic Recovery and Growth Plan, then annual budgets. According to the Fiscal Responsibility Act, the Executive MUST submit an MTEF. As at today, the vision of Nigeria remains the Vision 20:2020, which can be seen on the Ministry of Budget and Planning website.

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Second Story

In 2011, I watched the then CBN Governor, Sanusi Lamido Sanusi, and the Coordinating Minister of the Economy, Ngozi Okonjo Iweala, in Lagos attempt to make the simple mathematics case that subsidizing PMS imports was draining our $ reserves. Nigerians disagreed in 2012, and ‘occupied” and the subsidy continued.

However, let’s examine this closely, the first Medium Term Development Plan of the Vision 20:2020, i.e. from 2010-2013, called for the removal of fuel subsidy. Citing the need for continued fiscal reforms by reordering and re-prioritizing expenditure, fuel subsidy was proposed to be removed. Nigeria was to save an estimated N1.50trillion (using highest 2009 exchange rate of N177 that’s almost $9 billion savings!) In this regard, the administration had a vision– a strategic plan, which clearly recommended removal of subsidy– but it did not implement it fully.  The budget did not receive the planned revenue.

Thus, the removal of subsidy was a carefully thought-out plan, was partially implemented. From April 2018 to March 2019, the NNPC spent N650 billion on PMS subsidy. This figure is more than the capital allocation to the Ministry of Works, Power, Education and Defense COMBINED.

READ MORE: Worry, as Coronavirus threat pushes oil price below budget benchmark 

Reduce funding oil subsidy - IMF to Nigeria , Oil marketers, PENGASSAN call for subsidy removal 

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Now the 3rd story

As at 2007, perhaps only two car manufacturing plants in Nigeria were alive, but on life support– the PAN in Kaduna and Anamco in Enugu. Most new cars in Nigeria were fully imported.

In 2009, The Vision 20:2020 recommended that the federal government should intervene and revamp the automobile manufacturing sub-sector by, among other measures, reducing payment of customs duties and other charges on raw materials for local content to 0%.l, ensuring customs duty differential on fully built units (FBUs) between manufacturing and non-manufacturing importers favoured manufacturing importers. This Vision 20:2020 recommendation was inputted in the “automotive policy as part of the Nigeria Industrial Revolution Plan (NIRP)” in 2014.

The auto policy slashed import duties for completely knocked down parts (CKD) and semi-knocked down parts (SKD) as recommended. Then in the 2014 budget, we saw key earmarks: a N7 million to “buy made-in Nigeria products,” another N16 million to support backward integration for the NIRP, and N16 million to develop a 4-stroke 800cc local engine. These appropriations are tied to the NIRP, which is tied to the Vision 20:2020. Clearly, a vision, a strategic plan, and then funds were appropriated in the budget to develop the plan.

READ MORE: Nigerians spend $14 billion on generators, fuel

The effect?

According to the Director, Policy and Planning at the National Automotive Development and Design Council (NADDC), Mr. Luqman Mamudu, Nigeria’s automotive industry has attracted investments worth up to $128 million, and an estimated $50 million has been committed on land space and infrastructure from 2013. Car manufacturers such as Ford, Nissan, Peugeot, VW, Hyundai Kia Tata, etc., have all come to Nigeria to set up assembly plants.

Therefore, vision and planning are very important and this is why strategic planning must be linked to annual budgets. The budget only funds the plan, it cannot as a document “float”. President Buhari has been very clear on his “vision”– he wants to create jobs. He has gone further to say he will create jobs in Agriculture and Mining to diversify the economy away from crude oil.

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Brilliant!

The ERGP has, among her key execution priorities, “achieve agriculture and food security” … let’s look at the 2020 budget…

See what FSDH is saying about the 2020 budget and FG’s revenue drive 

What’s the sectoral allocation to Mines and Steel Development? N20 billion. Let’s compare this to the allocation to, say Information…at N52 billion… if the strategic plan is to create jobs via Mining, why is information getting more in the budget than Mining? In this case, the 2020 budget is not following the strategic plan.

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If Nigeria is adopting and continuing with the Vision 20:2020, then perhaps a revision is needed to update the targets and milestones.

READ MORE: RESCUE MISSION: CBN coordinates banks, other financial institutions, to raise N1.5 trillion for infrastructure

God does not give a nation orange juice; he gives them oranges. Nigeria is the largest economy in Africa, has the largest population in Africa and sits on the largest crude oil deposit in Africa, with the most educated diasporas from Africa. However, these are all factors of production; its vision, backed by a plan that converts population to a prosperous middle class and crude oil to petrol.

We must write a plan to make orange juice out of our oranges. This is our problem; we will fix it…

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Columnists

The role of healthy communication in the workplace

To foster a healthy work environment, employers should take communication more seriously.

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Networking, way to success in Nigeria

Profit is the purpose of every business organization. The best way to sustain profit is to strengthen the “Employer-Employee” relationship and the “Buyer-Seller” relationship. The profit of every business organization depends on these two. The success and failure of every business organization also depends on these two.

Communication is one of the major concerns in an organization and it is very necessary in our workspace and among people around us. Constant communication helps to build a strong connection in the relationship between an employer and an employee. It is crucial to the growth and success of your business and it allows everyone to provide input and feel that their ideas are valued.

Everyone can communicate as long as it is with words. In an organization, both the employer and the employees should develop good communication skills.

Your employees are part of the vision of your company and their opinions and innovations should be considered. This will go a long way in building a positive workplace culture.

Communication can be in oral or written form; and while written communication is the preferred form of communication in organisations, oral communication should neither be limited or downplayed. As an employer, your employees should be able to communicate freely with you. Communication reminds your employees about the goals of your company and helps you to delegate responsibilities effectively.

According to research, 57% of employees report not being given clear directions. A survey of 400 companies with 100,000 employees cited an average loss of $62.4 million per annum because of inadequate communication between the employer and the employees.

It is the responsibility of an employer to communicate the organisation’s vision, mission, goals and objectives to employees. Goals must also S.M.A.R.T (Specific, Measurable, Achievable, Realistic and Timely). Where communication is absent or ineffectively handled, employees can become unproductive, unresourceful, demotivated, and disorganised. There may also be high employee turnover which ultimately affects the profitability of the business. Without effective communication, an organisation will most likely be unable to retain its star performers or motivate average-performing employees into becoming highflyers.

Communication in organisations should not be left only to the Human Resources department, but feedback should also be encouraged from employees. Where there is a gap in communication, employees are left with no choice but to fill these gaps with rumours, (wrong) assumptions, gossip and the spread of misinformation. This creates an unhealthy work environment that is detrimental to the business.

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To foster a healthy work environment, employers should take communication more seriously. They should not only learn the art of effective communication but should also encourage and be receptive to feedback from their employees.

 

 

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Columnists

Why NNPC’s Borno power plant may not materialise 

The glaring security challenge cannot be overlooked in considering a major power plant project in Borno State.

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Only a few days ago, the Group Managing Director of the Nigerian National Petroleum Corporation (NNPC), Mele Kyari, led a delegation to Borno State to meet with the Governor of the State, Babagana Zulum.

In the conversation with Zulum, Kyari promised the establishment of a gas-fired power plant in Borno State within a maximum of 4 months to solve the recent blackouts that resulted from insurgents cutting off Borno from the national grid since January this year.

In Kyari’s words, “We have talked to each other and we think it’s very possible to establish a dedicated power plant in Maiduguri which will serve current needs of power supply not only in Maiduguri but to other parts of the neighbouring cities.”

READ: NNPC GMD says AKK pipeline, Nigeria’s biggest gas project is 15% complete

Yet, there is a significant possibility that the power plant promised by Kyari may not materialize for many reasons, the first of which is security. In the meeting with Kyari, Governor Zulum had noted: “The ongoing insurgency has cut off the entire Borno from the national grid in the last three months. We put all our efforts and restored it back… but unfortunately, after 48 hours, the same group of insurgents went back and destroyed the main tower again.”

This glaring security challenge cannot be overlooked in considering a major power plant project in Borno State, particularly noting that the State and its surrounding communities have been the hot zone of insurgent and terrorist attacks by Boko Haram insurgents since 2009. Borno, Yobe and Adamawa have particularly been states where the insurgents have set up shop and carried out various activities, including kidnap, extermination of entire communities, burning of markets and religious buildings and the attack on the United Nations compound, in each case claiming tens or hundreds of innocent lives.

READ: Analysis: NNPC and its refining losses

One report reveals that at least 37, 500 people have been killed by the insurgent group since May 2011, a modest number, some say. Also, till date, some of the secondary school girls kidnapped in the April 2014 Chibok incident are yet to be returned to their families. It is then bewildering how Kyari intends to see to the construction and operationalizing of this gas power plant.

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Additionally, while the Minister of Petroleum for State, Chief Timipre Sylva, announced last year about the discovery of oil and gas deposits in the North, we have not seen any exploration and production kick-off. It then begs the question of where the gas for the Borno power plant intends to be sourced. The only gas pipeline that runs through the North – the AKK- is still in its first phase of construction out of three phases and has been earmarked at the earliest, to be completed in 2023 – not counting the typical delays the project will experience along the way.

READ: NNPC, only Nigerian company to cut losses by N800 billion in one financial year – GMD

Should the AKK by some stroke of luck materialize much earlier than the target date, the pipeline route is a considerable distance from Borno. It runs the route of Ajaokuta-Abuja-Katsina-Kano, its endpoint, a striking 481km from Borno State. Thus, there would have to be construction of a tie-in pipeline almost as long as the AKK from Kano to Borno State to get gas to Borno.

Optimists may reference the oil and gas discovery in the North and how production may start soon, thus obliterating the need for a 481km pipeline. This optimism however is not well-founded, as insecurity has been shown to be a major risk to oil and gas projects everywhere in the world. One of the major reasons the Trans-Saharan Gas Pipeline proposed to run from Nigeria to Algeria was abandoned was due to security challenges posed by Nigeria’s Movement for the Emancipation of the Niger Delta (MEND), the Tuareg guerilla movement in Niger and other insurgent groups along the proposed route of the pipeline.

READ: Why NNPC should be commercialised

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These increased the risks across board, including for completion and operations through the lifecycle of the project. As such, failing to fix the security threats in northeast Nigeria makes any proposed gas plant project a pipe dream. Transporting gas via LNG trucks is not a better option, given that the drivers and their cargoes would be in danger of being kidnapped, shot at or bombed. The risks for both personnel and investors are high.

In any event, promising a power plant in 4 months for the people of Borno is unconscionable, since a typical gas power plant will take between 1 to 6 years to construct in relatively peaceful regions. What the government needs to do instead of making promises it cannot keep is to work arduously to fix the security challenges in Northern Nigeria and at the same time consider using decentralised solar power to provide power supply to homes, government institutions, schools and businesses while plans to produce gas in the region or transport gas to it are underway.

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