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NESG: From high-tables to work-tables

NESG has focused on vital themes that underscored the need to expeditiously rebuild the Nigerian economy.

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3 bank directors resign from NESG in protest to CBN immunity letter

It used to be the case that the Nigerian economy stood on an intellectual tripod that comprised the academia, the civil service and the private sector.

All three legs did not, strictly speaking, work in tandem towards achieving a common goal. Whilst the professors theorised with minimal input from the field, the civil servants formulated and implemented public policies from a weak economic knowledge base and the private sector carried the can for every flip-flop in the marketplace.

READ: Bank CEOs ‘explain’ why they resigned from NESG

If goals aligned along the line, it was largely circumstantial, not the result of careful planning. If not, all three parties met at conference tables to produce ad hoc solutions to the country’s myriad of economic challenges.

The need for more strategic planning for national economic development spurred a band of key players in the private and public sectors, the civil society and the academia to conceive the Nigerian Economic Summit Group (NESG) in 1993.

READ: 3 bank directors resign from NESG in protest to CBN immunity letter

The Group’s mandate is to promote and champion the reform of the Nigerian economy away from a largely public sector, closed-door affair into an open, globally competitive economy.

The six underlying principles of NESG emphasized; a commitment to a free-market economy, the encouragement of private sector investment, the creation of an enabling environment, governance in the national interest, commitment to the rule of law, and the establishment of an economic foundation for democracy.

READ: Nigeria imported N1.28 trillion “used vehicles”, motorcycle in one year, up by 42%

Twenty-six years into its annual Summits, the NESG has kept faith with its vision of strategically promoting inclusive growth, achieving impactful economic policy reforms and ensuring stakeholder satisfaction.

Of significance is the theme of the third Summit in 1996, ‘Unlocking Nigeria’s Economic Potential’, the outcome of which influenced the Federal Government’s institution of ‘Vision 2010 – A Long Term Free Market Development Plan for Nigeria.’ Subsequent Summits focused on vital themes that underscored the need to expeditiously rebuild the Nigerian economy.

READ: Nigeria’s Broadband subscriptions peak at 82.7m – Prof. Danbatta

Much of the positive outcomes generated at NESG Summits derived from shifting emphasis from the ‘talk-a-thon’ approach of conferences to a ‘Paying to Serve’ culture in which NESG members invest their time, resources and capabilities in advancing the public/national interest.

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As the pioneer Vice-Chairman, Mr Dick Kramer, clarified it:  “We substituted High-Tables for Work-Tables (because) we knew that it would take sitting in small groups with the government officials to make the policy changes we needed for Nigeria to happen.” The resultant Technical Working Groups (TWG) have continued to serve as the engine room for the operations of NESG and the core groups that engage in the follow-up commitments established at the maiden summit in 1993.

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READ: 150 million to fall into extreme poverty by 2021 – World Bank

If anything, the ready acceptance of the recommendations of the NESG by successive governments point to the fact that the Group had filled yawning gaps in development planning in Nigeria. Indeed, the NESG’s qualitative interventions could be felt in its recommendation of far-reaching economic and institutional reforms that were essential for the nation’s return to and sustenance of democracy.

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The recommendations include; the creation of the Niger Delta Development Commission, the implementation of the Universal Basic Education Programme to enhance literacy in Nigeria and institutional reform to turn around years of systemic and institutional corruption, which presage the establishment of the Independent Corrupt Practices Commission (ICPC) and the Economic and Financial Crimes Commission (EFCC).

READ: CBN urges banks to ‘support’ media, aviation industries to avert growing job losses

Also notable was NESG’s partnership with the Obasanjo administration, which led to the development of the medium-term economic agenda called the ‘National Economic Empowerment Development Strategy’ (NEEDS) and its domestication as the ‘State Economic Empowerment Development Strategy (SEEDS), and the ‘Local Government Economic Empowerment Development Strategy’ (LEEDS).

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The strategic idea behind the formulation of NEEDS-SEEDS-LEEDS was to activate Nigeria’s political economy by empowering private sector enterprises to become the engine of growth. It similarly redefined and re-emphasized the role of government within the context of policy formulation and the establishment of appropriate legal and regulatory framework, which underlines a core part of the NESG mandate.

READ: FG moves to ease congestion on arrival at airports, introduces new online procedure

NESG’s Summits and contributions from its members also set the tone for the comprehensive review of Nigeria’s telecommunications and broadcasting policies and the consequent deregulation of the Information and Communication Technology sector. The full liberalisation of the sector and the auction of mobile telephony licences also helped to change the face of communication in Nigeria.

In the financial services sector, the 2004 banking consolidation programme, which reduced the number of banks in the country from 89 to 25, was an offshoot of Summit deliberations. Recommendations from NESG also impacted maritime and seaports reforms, especially in respect of accelerated ratification and domestication of all pending International Maritime and Shipping Codes and Conventions to which  Nigeria was a signatory.

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The strategic concession, commercialisation and privatisation of Nigeria’s sea ports, maritime local content development through the Cabotage Act and Bareboat Charter Regulations to boost tonnage, the establishment of Unified Maritime Administration for the full implementation of all Maritime Codes, Conventions and Protocols and improving Security and Safety of Nigerian Maritime Domain, which led to the establishment of the Presidential Implementation Committee for Maritime Safety and Security (PICOMSS).

In the education sector, the NESG reached an agreement with the National Universities Commission (NUC) to collaborate on the development of solutions that strategically drive effective development of a productive university system that also guarantees quality and relevant education for national development and a globally competitive economy.

READ: Lagos to use Ehingbeti summit to sustain socio-economic development

That collaboration aims to bridge the gap between business and the academia. Beyond this, the NESG has also established a working committee that comprised the NESG and the NUC to review the blueprint on the Rapid Revitalisation of University Education in Nigeria, 2019-2023. This was sequel to the discovery that the current strategy did not align with the future of work and needed to be coordinated with critical stakeholders in the public and private sectors.

Also worthy of commendation is NESG’s strategic alliance with the European Business Policy Council to provide international investors in Nigeria with a dedicated platform to engage government on conducive environment and policies for foreign investments in Nigeria.

READ: Nigeria records lowest remittances from abroad since 2008

One must also recognize the smooth collaboration of NESG with the National Assembly and the legal profession which gave rise to the National Assembly Business Environment Roundtables (NASSBER), a wholly private-sector funded body made up of working groups that hold regular meetings and review selected legislations. NASSBER collaborates with some other stakeholders to facilitate the speedy passage of critical bills to improve Nigeria’s economy.

Whilst stakeholders are agreed that the NESG has reasonably demonstrated the capabilities to sustain its mandate, there still are misgivings that the body has yet to maximise its ability to secure sufficient legislative powers to back its initiatives. Even at this, the body cannot take the bulk of the blame. In 2019, NESG did point out that the non-passage of some priority bills has contributed to the persisting regulatory environment that has contributed to low investor confidence and slowed Nigeria’s economic growth.

READ: Fitch Ratings: Nigeria clinches a stable ‘B’ Issuer Default Rating

Let us look at the records. According to NESG, NASSBER had identified 31 priority Acts and Bills as crucial for economic development and enabling business environment. Of the Acts and Bills, 16 were passed by the Senate and the House of Representatives, with four pending at both chambers. Thirteen of these bills were transmitted to President Muhammadu Buhari for his assent. However, he assented to only two, that is, the Secured Transactions in Moveable Assets Act and Credit Reporting Act. The President later withheld assent to four of the bills.

READ: Nigeria @ 60: The Banking Sector and the Nigerian economy 

Till date, the NESG can be said to have succeeded in playing its self-assigned role as the country’s foremost economic think-tank and a bridge between the government and private sector stakeholders. As the NESG converges on Abuja between October 26 and 27 for its 26th Summit, much is expected from the body as participants reflect on the state of the Nigerian economy, rethink the country’s economic fundamentals and deliberate on the impact of the coronavirus pandemic on the socio-economy.

READ: Nigeria @ 60: The Aviation sector and its travails

Perhaps, it is fitting that the opening plenary topic of the Summit is ‘Nigeria’s Turning Point.’ At 60, Nigeria truly needs to adopt a different approach from its current hit or miss policy of economic management to a sustained policy planning regime aimed at achieving economic growth and development. That approach, the NESG maintains, will be anchored on a robust partnership between sub-national governments and the private sector to capitalize on sub-national factor endowments to achieve global competitiveness. In the age of economic and physical lockdown brought on by the global coronavirus pandemic, it is also critical, as the Summit is set to do, to consider ‘Counting the Costs: The Economic Impact of COVID-19’ at the Summit’s plenary session.

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As has been the success story of the NESG since its inception, robust contributions and recommendations are expected from the 26th edition that will assist the government in no small way in the management of the economy. This fact can almost be taken for granted. What remains to be seen is the willingness of government to support NESG with the political will to ensure that Nigeria meets the United Nations-approved Sustainable Development Goals by 2030.


 

Dotun Adekanmbi a Consultant writes in from Lagos.

Nairametrics frequently publishes articles from experts such as financial analysts, economists, researchers and investors. We also feature articles from guest writers and bloggers who wish to push their views and opinions through our platform.To get your articles on Nairametrics, kindly send an email to [email protected] and we will publish it within 24 hours of approval by our editorial team.

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Columnists

EFCC: There is a new Sheriff in town

It is hoped that 40-year-old Bawa will be a breath of fresh air to the agency which has over time, lost its credibility.

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Yesterday, the Nigerian Senate approved the nominated Mr. Abdulrasheed Bawa as the new Chairman of the Economic and Financial Crimes Commission (EFCC).

Mr. Abdulrasheed Bawa, a 40-year-old graduate and the Lagos zonal office’s immediate past head, was one of the Institution’s pioneer cadets following its establishment in 2005. By this appointment, the new Chief would succeed the suspended, former head of the organization, Mr. Ibrahim Magu. Magu was suspended following allegations of misappropriation of recovered funds.

The EFCC was founded in 2005, as the Olusegun Obasanjo administration sought to expand its anti-corruption campaign to all sectors. Before then, the independent Corrupt Practices Commission (ICPC) had been established but targeted corruption in the public service as there were reports of massive decadence in the Public sector where bribery, extortion, graft and abuse/misuse of office had become the order of the day.

READ: Ibrahim Magu summoned by Code of Conduct Bureau

The EFCC on the other hand, not only investigates people across all sectors but is empowered to deal with issues around money laundering and other financial crimes such as advanced fee fraud (419).

The new Chief, in effect, is the first of his kind to head the agency, given that the organization’s past leaders have always been ex-police officers while the new Chief is a trained Economist. The EFCC has over time lost some credibility given that the organization’s past leaderships have received backlash for being selective in their anticorruption campaign, not using standard operating procedures, and being the powerful ruling class’s political tool. While it is impossible to tell how the new EFCC Chief will perform, we believe a new beginning and its attendant optimism could intensify the implementation of the anti-corruption agenda.

In recent years, Nigeria has been entangled in a number of controversial headlines bordering on corruption. From the arrest of a popular Nigerian entrepreneur for fraud, to the Jumia internal staff fraud scandal and the indictment of 80 Nigerians in the US for fraud and cyber-related offenses, Nigeria has faced immense fraud-related negative press coverage.

READ: Meet the new EFCC Chairman, Abdulrasheed Bawa

Over the years, the country has earned for itself a negative reputation as a stronghold of cybercrimes and fraud. Even though internet fraudsters constitute a small minority of the population, the rate at which fraud is reportedly perpetrated by Nigerians is becoming increasingly alarming, hence the need for the anti-corruption fight to come to the fore.


CSL Stockbrokers Limited, Lagos (CSLS) is a wholly owned subsidiary of FCMB Group Plc and is regulated by the Securities and Exchange Commission, Nigeria. CSLS is a member of the Nigerian Stock Exchange.

 

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Would the Nigeria-Morocco gas pipeline succeed where the Trans-Saharan failed?

Twelve years later, Trans-Saharan Gas Pipeline is more of a pipe dream than a pipeline.

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In July 2009, Nigeria, Niger and Algeria came together to develop the Trans-Saharan Gas Pipeline (TSGP), what would have been at the time, one of Africa’s biggest gas infrastructure projects. The over 4000km long pipeline was to take gas from up north in Nigeria – feeding from the AKK pipeline- to Niger and all the way to Algeria in North Africa. The projected $12 billion project was set to significantly transform the face of the energy sector for the countries involved and particularly for Europe who would have received supply from Algeria.  Twelve years later, however, the project is more of a pipe dream than a pipeline.

What we see today instead is the projected construction of a Nigeria-Morocco Gas Pipeline (NMGP), which is a 5, 660km gas pipeline that would transport gas from Nigeria all the way to Morocco- even more ambitious than the failed Trans-Saharan gas pipeline. The NMGP is expected to tie in from the existing West African Gas Pipeline (WAGP) from which Nigeria feeds Ghana, Benin Republic and Togo and travel through Cote d’Ivoire, Liberia, Sierra Leone, Guinea, Guinea-Bissau, the Gambia, Senegal and Mauritania all the way to Morocco and Spain.

READ: NCDMB says Nigerian Oil and Gas Park will be completed in Q4 of 2022

It is probably safe to say that with the emergence of the NMGP, the TSGP has died a natural death, and for good reasons too. One of the major challenges of the TSGP was security. The pipeline was going to run through very volatile areas, including the Sahara desert, regions notorious as being breeding grounds for terrorist groups like Al-Qaeda and Boko Haram. This would both have left the construction workers in danger and created the possibility of pipeline vandalism by these security threats, particularly considering the fact that the pipeline was to be onshore.

Yet, there seems to be a common thread running through the failed TSGP and the proposed NMGP. The NMGP is to be an extension of the WAGP, and the challenges faced by the WAGP over the past few years are largely from security threats in the South-East and South-South of Nigeria by Niger Delta militants, who, by creating unrest in the area, made it difficult for Nigeria to fulfil its gas supply obligations to these neighbouring countries.

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

With a pipeline running thousands of miles more into the open sea and trans-continental, the effects of shut-ins and shutdowns of the WAGP would have far-reaching consequences on supply to the NMGP. It is expected too, that any supply contracts Nigeria enters will seek to exclude such these security challenges from Force Majeure provisions, leaving the resulting liability for failure of supply to be borne by Nigeria.

These security concerns that resulted in the failure of the TSGP- which have worsened under the Buhari regime- and that pose possible challenges to the NMGP must be addressed. In 2020 alone, reports show that between January and November, there were 142 incidents of Boko Haram insurgency in North-East Nigeria, an average of 13 a month with at least 1,606 people killed and Nigeria being listed as the third-most terrorised countries in the world.

What is interesting to see, however, is how quickly the NMGP project is moving along, already entering its second phase of front end engineering design (FEED) 5 years after it was conceptualised. Additionally, what this project does that the TNGP was very limited in achieving, is that it provides access to gas supply to eight other African countries excluding Morocco and the three countries already supplied by the WAGP.

READ: FG projects $2 billion annual revenue from Escravos Gas project

While this brings up the challenge of land and environmental permits as well as a need to get the various governments on board, as the project is an onshore-offshore combination, that challenge is somewhat obliterated. The project will also create security of gas supply within Southern Europe, and promote healthy competition, as the region is also supplied by Russia and the Trans-Adriatic pipeline which feeds from Azerbaijan. This competition is expected to reduce prices.

There are the challenges of financing such an ambitious project, and indeed the longest transnational pipeline project across the continents of Africa and Europe, but it is hoped that regional banks like the African Development Bank (AfDB), European Bank for Reconstruction and Development (EBRD) and European Investment Bank (EIB) will put their weight behind the project. It is critical however that issues like security, environmental considerations and land rights for where the pipeline runs onshore are addressed early on.

This project also makes obvious the issues that plagued the abandoned TNGP, and exposes the imminent need to push development to Northern Nigeria and eliminate terrorist settlements, as this will continue to affect economic development not just in Nigeria, but in the entire region. A project like the Ajaokuta-Kaduna-Kano (AKK) pipeline should be prioritised, as supply of gas in the North will aid significant industrialisation and development.

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