APC’s FIVE THOUSAND NAIRA PROMISE FOR THE UNEMPLOYED AND VULNERABLE: LET’S NOT BEAT OURSELVES UP OVER AN IMPROBABLE PROMISE:
For me, I think the government was courageous in telling the truth, to Nigerians, on the impracticability of the proposition. Just like School feeding, just like State Creation and other bogus promises which only appeal to the undiscerning, there is no basis for those lavish schemes which are not sustainable and only speaks of spending without a carefully thought out spin-off and possible benefit for the economy. I am not saying that investment in human capacity development does not pay dividend. What I am saying is, there are more strategic schemes which can help the bottom of the pyramid, bridge inequality and create a sustainable basis for the development of the economy.
LET’S REVIEW A COUPLE OF THINGS THAT THE GOVERNMENT CAN DO AS REPLACEMENT FOR THE BOGUS FIVE THOUSAND NAIRA PROMISE
1. EDUCATION - Tied to poverty is illiteracy. How do we avail the right kind of education that can feed our development needs and de-emphasize education that prioritizes white-collar jobs over blue-collar? How do we create an education system that can accelerate development; and one that targets the bottom of the pyramid - giving them requisite vocational skills that can feed into a chain of small businesses and guarantee a supply of support skills that can help quicken our infrastructure and industrial development? That should be our priority. School feeding is of secondary importance here, and may be introduced if the economy is buoyant and is able to support the investment long-term, otherwise, why not seek other platforms in which the parents of school-children can be supported, while the right infrastructure and instructional environment is created?
2. ENERGY - Growth and Development are actually not synonyms. In Nigeria's case, growth averaged 6.2% for 10 years from 2004 – 2014, without commensurate development. How can a nation fast-track development with electricity supplies to the national grid averaging 2,500 Megawatts in a nation of 178 million people? It is often said that small businesses are the engine room of development in any economy, and China remains a classic example. There is correlation between access to energy and cost of doing business as well as the development of small businesses. Rather than invest 3 Trillion in hand-outs to constituents that are not properly delineated, given the absence of a credible National Identity Scheme, why not invest it as part of Development Financing for Energy and other Infrastructure? If this is done, not only will we be able to create over 200, 000 (two hundred thousand) direct jobs in the energy and infrastructure sector, we’ll also be able to liberate over 2,000,000 (two million) indirect jobs from Agribusiness, manufacturing and allied industries, as a result of acquired energy and infrastructure efficiencies. This does not include the tax income and foreign direct investments that will flow therefrom.
3. EMPOWERMENT - Agriculture contributes about 21% of Nigeria's GDP but it is largely done at subsistence level with no empowerment for rural and small-holder farmer, whose manual efforts are greeted with very low yield-per-hectare, hence the high-level of rural-urban drift; and tied to this is the high level of destitution and crime in our urban centres. So rather than worry about giving a five thousand naira monthly stipend to the vulnerable, the focus should be on how we can empower small-holder farmers, implement a value chain approach to the development of our Agriculture while moving the dynamics of the Agriculture sector from Farm-gate to factory-gate, leveraging access to credit, fertilizers, all year round irrigation, extension services and the building of Agro-Allied Industries in identified Agric-Belts. Furthermore, beyond Agriculture, there are over 12 Million registered SME’s in Nigeria, with less than half of these operational due to a lack of access to credit and other economic infrastructure such as electricity. So rather than invest 3 trillion naira on a preventive giving scheme, why not set-up a Development Finance framework to empower over a million MSME’s? If one million MSME’s are empowered and are able to create at least 2 new jobs each, that is another 2 million jobs added to the economy with productivity gains added, representing a boost to our Gross Domestic Products.
SO WHY INSIST ON THE 5 THOUSAND NAIRA STIPEND?
It’s a promise, if implemented, may derail this government from achieving anything worthwhile, rather than hyper-inflation, which may, in fact render the naira totally useless. We have seen the result of bogus schemes such as this. Remember the the Robert Mugabe's programme which returned land to poor uneducated black farmers who did not have the capacity to maximise the potentials of the land. This populist policy threw the Zimbabwean Economy into the deep recession, which the Country is battling till date. Let's not start a wild scheme in Nigeria. #LetsFaceFacts
Let's talk business and nation-building
Tuesday 1 March 2016
Monday 22 February 2016
Nigeria: Crude Oil Futures and Lessons from History
AS OIL DROPS BELOW $27, SPEEDILY NEARING THE PSYCHOLOGICAL $25 MARK - HISTORY MAY BE ABOUT TO REPEAT ITSELF.
Oil futures today fell below $27, as it traded at $26.30 as at 12 noon Eastern time on January 20, 2016 - the lowest it has seen since 2003. In the last two weeks alone, we have witnessed the free-fall of Crude Oil prices with the announcement that Iran is set to pump over 500,000 barrels into the market following the lifting of sanctions - adding another venomous bite to the inability of OPEC members to agree on the need to slash production quotas. Given the over-supply situation currently prevailing in the market, it does not appear that the price level has bottomed-out yet. So prices may be yet on a roller-coaster ride southwards.
BITTER SWEET BEGINNINGS - RENT-TAKING IS SET TO GIVE WAY TO HARD RIGOR AND SMART IDEAS
Now our Governors will act more as Managers than Monarchs.
Now our National Assembly will assemble to discuss serious policies and not assemble to share money. Now the Public Service will truly be about service and not kickbacks. Now Presidency will have to move beyond Anti-Corruption rhetoric, to strategy on revamping the economy and social re-engineering.
ORDINARILY, WHAT DOES NOT KILL YOU, SHOULD MAKE YOU STRONGER - NIGERIA APPEARS TO BE DIFFERENT.
Given that we have a penchant for not learning from history, history is repeating itself in a very mischievous way. In 1984, when General Buhari took over government, Oil futures averaged $28.75. It continued its free fall in 1985 and bottomed-out in 1986 at $14.44. This forced the Babangida administration, the successor to the Military government of General Buhari, to implement structural reforms - starting with the Second-tier Foreign Exchange Policy and the Structural Adjustment Programme. Had the Babangida administration not frustrated its own reforms through unbridled corruption and enthronement of a culture of rent-taking, ending in its refusal to hand-over government to the winner of the election it conducted, things may probably have been different today. I pray we look back to history in solving this current problem. #LearningFromHistory
Oil futures today fell below $27, as it traded at $26.30 as at 12 noon Eastern time on January 20, 2016 - the lowest it has seen since 2003. In the last two weeks alone, we have witnessed the free-fall of Crude Oil prices with the announcement that Iran is set to pump over 500,000 barrels into the market following the lifting of sanctions - adding another venomous bite to the inability of OPEC members to agree on the need to slash production quotas. Given the over-supply situation currently prevailing in the market, it does not appear that the price level has bottomed-out yet. So prices may be yet on a roller-coaster ride southwards.
BITTER SWEET BEGINNINGS - RENT-TAKING IS SET TO GIVE WAY TO HARD RIGOR AND SMART IDEAS
Now our Governors will act more as Managers than Monarchs.
Now our National Assembly will assemble to discuss serious policies and not assemble to share money. Now the Public Service will truly be about service and not kickbacks. Now Presidency will have to move beyond Anti-Corruption rhetoric, to strategy on revamping the economy and social re-engineering.
ORDINARILY, WHAT DOES NOT KILL YOU, SHOULD MAKE YOU STRONGER - NIGERIA APPEARS TO BE DIFFERENT.
Given that we have a penchant for not learning from history, history is repeating itself in a very mischievous way. In 1984, when General Buhari took over government, Oil futures averaged $28.75. It continued its free fall in 1985 and bottomed-out in 1986 at $14.44. This forced the Babangida administration, the successor to the Military government of General Buhari, to implement structural reforms - starting with the Second-tier Foreign Exchange Policy and the Structural Adjustment Programme. Had the Babangida administration not frustrated its own reforms through unbridled corruption and enthronement of a culture of rent-taking, ending in its refusal to hand-over government to the winner of the election it conducted, things may probably have been different today. I pray we look back to history in solving this current problem. #LearningFromHistory
Nigeria: The Search for the Right Economic Paradigm
MY CURRENT THOUGHTS ON NIGERIA – WE BADLY NEED TO CHANGE PARADIGM.
Nigeria is drifting and there seems to be a scarcity of wisdom, not just in the corridors of power, but everywhere. We seem to be great at recycling our leaders in an attempt to leverage experience in resolving a current challenge. It happened in 1999 and it repeated itself in 2015. But, the missing link has really not been “experience”, it has all along been “vision”. I reckon that for us to go into the future, “vision” must replace “experience”. In trying to find answers to the current challenge, we must look beyond the immediate. We really need to ask ourselves: “what really do we want Nigeria to be like in 30 – 50 years from now?”
MY CONVERSATION ON ZERO-BASED BUDGETING, THE 2016 BUDGET ERRORS AND THE CURRENT STATE OUR ECONOMY...
At the start of the debate on “Budget Padding” and all the phony figures that were emanating from the proposed 2016 budget, a foreign friend asked me some curious questions: “I thought your new government initially spoke about zero-based budgeting as done in China, I do not think that what was delivered was zero-based budgeting as there would have been no room for these levels of error if only the government had stuck with what it initially pronounced”. I tried to defend the government but my defence was feeble as my friend immediately countered by saying: what zero-based budgeting means is budgeting in which all expenses must be justified for each new period. Zero-based budgeting, therefore, starts from a "zero base" and every proposed expenditure – be it OP-EX or CAPEX - is analyzed for its needs and costs. So where did all the errors come from?” I was dazed. Before I could recover, my friend again asked another interesting question: ‘Did the current government weigh the challenge of falling Oil prices and the huge level rot in the system before aspiring for power?” That question was immediately followed by another one: “Beyond the quest to fight corruption, does the current government have a broad plan for the revival of the economy and the entrenchment of a system that works?” Both sounded like rhetorical questions to me because I could not proffer a clear answer.
SO, WHERE DID WE GO WRONG?
At the start of the current foreign exchange imbroglio, the government allowed the CBN governor a free reign as he experimented with currency controls – banning and unbanning items fit for access to the dollar at the official rate, yet no fiscal policy direction was unveiled to address imbalance within the economy. So, rather than put together a crack team to look at the issues more robustly, government played the ostrich.
WE PLAYED THE OSTRICH - USING MONETARY INTERVENTION TO ADDRESS AN ISSUE WHICH NEEDED A COMBINATION OF FISCAL AND MONETARY MEASURES
The government allowed the CBN Governor a free reign as it experimented with currency controls at a very delicate time, rather than put together a crack team to look at the issues more robustly. We got a downgrade on the JP Morgan Bond Index, it was fine. Foreign Investors started to flee our Bourse – it was fine. We started to lose foreign direct investment flows – it was fine. Government persisted in its ways and now, there is a huge gap between the official rate of the dollar and the black-market rate, with speculators having a field day in the middle – I hope we still do not perceive this as fine? Because, at this rate, if we do not start to do the right things, we might be heading for a recession.
NO DOUBT, PRESIDENT BUHARI MEANS WELL – BUT BEYOND GOOD INTENTIONS, WE NEED A LEADERSHIP THAT CAN LEAD THE WAY OUT OF OBSOLETE PARADIGMS
The problem is not good intentions. The real problem is that we are so used to doing nothing but corruptly courting the income coming from Crude Oil, with no push for a change in paradigm. We have designed all manner of Development / Rolling Plans – from Vision 2010 to NEEDS, to Vision 2020 – but, we have NOT action-ed any.
TRUTH IS, RIGHT ACTIONS ARE BETTER THAN GOOD INTENTIONS.
I still believe in good intentions, but I am longing more for right actions, right now, because Nigeria badly requires a leader that is an innovator and a change-maker, who is endowed, skilled and emotionally engaged. While right actions usually flow from good intentions – good intentions remain the starting point; we must take it further, because, in solving the current challenge, there is a need for revolutionary change and not incremental change.
POST-SCRIPT: MY SUGGESTION
While I accept that there really are no quick fixes for the position we found ourselves following the fall of Crude Oil prices in the global market, but our government did not help matters at all. Truth is, we have no one to blame but ourselves. Our love for everything foreign and our reliance on a wasting asset has led us on this path. Now what is desirable are innovative solutions rather than a hard-line position. Nigeria cannot be an island unto itself. We need the world, just as the world needs us. Devaluing by 20% when our dominant export had lost over 80% of it's value,and meandering on the corridor of a hard-line exchange control, seem to me like playing the Ostrich. What we should have done was to begin to address key fundamentals like interest rates, a possible quantitative easing with rate hikes on letters of credits for imports and subsidies for target sectors like Agriculture and Manufacturing, while reaching out for foreign investment.
Nigeria is drifting and there seems to be a scarcity of wisdom, not just in the corridors of power, but everywhere. We seem to be great at recycling our leaders in an attempt to leverage experience in resolving a current challenge. It happened in 1999 and it repeated itself in 2015. But, the missing link has really not been “experience”, it has all along been “vision”. I reckon that for us to go into the future, “vision” must replace “experience”. In trying to find answers to the current challenge, we must look beyond the immediate. We really need to ask ourselves: “what really do we want Nigeria to be like in 30 – 50 years from now?”
MY CONVERSATION ON ZERO-BASED BUDGETING, THE 2016 BUDGET ERRORS AND THE CURRENT STATE OUR ECONOMY...
At the start of the debate on “Budget Padding” and all the phony figures that were emanating from the proposed 2016 budget, a foreign friend asked me some curious questions: “I thought your new government initially spoke about zero-based budgeting as done in China, I do not think that what was delivered was zero-based budgeting as there would have been no room for these levels of error if only the government had stuck with what it initially pronounced”. I tried to defend the government but my defence was feeble as my friend immediately countered by saying: what zero-based budgeting means is budgeting in which all expenses must be justified for each new period. Zero-based budgeting, therefore, starts from a "zero base" and every proposed expenditure – be it OP-EX or CAPEX - is analyzed for its needs and costs. So where did all the errors come from?” I was dazed. Before I could recover, my friend again asked another interesting question: ‘Did the current government weigh the challenge of falling Oil prices and the huge level rot in the system before aspiring for power?” That question was immediately followed by another one: “Beyond the quest to fight corruption, does the current government have a broad plan for the revival of the economy and the entrenchment of a system that works?” Both sounded like rhetorical questions to me because I could not proffer a clear answer.
SO, WHERE DID WE GO WRONG?
At the start of the current foreign exchange imbroglio, the government allowed the CBN governor a free reign as he experimented with currency controls – banning and unbanning items fit for access to the dollar at the official rate, yet no fiscal policy direction was unveiled to address imbalance within the economy. So, rather than put together a crack team to look at the issues more robustly, government played the ostrich.
WE PLAYED THE OSTRICH - USING MONETARY INTERVENTION TO ADDRESS AN ISSUE WHICH NEEDED A COMBINATION OF FISCAL AND MONETARY MEASURES
The government allowed the CBN Governor a free reign as it experimented with currency controls at a very delicate time, rather than put together a crack team to look at the issues more robustly. We got a downgrade on the JP Morgan Bond Index, it was fine. Foreign Investors started to flee our Bourse – it was fine. We started to lose foreign direct investment flows – it was fine. Government persisted in its ways and now, there is a huge gap between the official rate of the dollar and the black-market rate, with speculators having a field day in the middle – I hope we still do not perceive this as fine? Because, at this rate, if we do not start to do the right things, we might be heading for a recession.
NO DOUBT, PRESIDENT BUHARI MEANS WELL – BUT BEYOND GOOD INTENTIONS, WE NEED A LEADERSHIP THAT CAN LEAD THE WAY OUT OF OBSOLETE PARADIGMS
The problem is not good intentions. The real problem is that we are so used to doing nothing but corruptly courting the income coming from Crude Oil, with no push for a change in paradigm. We have designed all manner of Development / Rolling Plans – from Vision 2010 to NEEDS, to Vision 2020 – but, we have NOT action-ed any.
TRUTH IS, RIGHT ACTIONS ARE BETTER THAN GOOD INTENTIONS.
I still believe in good intentions, but I am longing more for right actions, right now, because Nigeria badly requires a leader that is an innovator and a change-maker, who is endowed, skilled and emotionally engaged. While right actions usually flow from good intentions – good intentions remain the starting point; we must take it further, because, in solving the current challenge, there is a need for revolutionary change and not incremental change.
POST-SCRIPT: MY SUGGESTION
While I accept that there really are no quick fixes for the position we found ourselves following the fall of Crude Oil prices in the global market, but our government did not help matters at all. Truth is, we have no one to blame but ourselves. Our love for everything foreign and our reliance on a wasting asset has led us on this path. Now what is desirable are innovative solutions rather than a hard-line position. Nigeria cannot be an island unto itself. We need the world, just as the world needs us. Devaluing by 20% when our dominant export had lost over 80% of it's value,and meandering on the corridor of a hard-line exchange control, seem to me like playing the Ostrich. What we should have done was to begin to address key fundamentals like interest rates, a possible quantitative easing with rate hikes on letters of credits for imports and subsidies for target sectors like Agriculture and Manufacturing, while reaching out for foreign investment.
Friday 4 December 2015
When Shall Our Nightly Visions, Give Way to Mornings of Fulfillment?
WANDERING, WONDERING...
Melancholic blues rings loud
On the alters of Nationhood
Mass-Servers in self-centred homilies
"Bless" our forlorn hopes
With sermons of democracy dividends
Wandering, wondering...
Normads on a journey to greenland
Sheep and Shepard in a sleepwalk
Wind-driven, like sails to neverland
Wandering, wondering...
Summits and talkshop
Outcomes a slogan: 2020!
More summits, more talkshops
Another slogan: 7 point agenda!
Still discussing, still planning
Another slogan: Due Process!
Wandering, wondering...
Another homily:
Blessed are those who talk
For from words did our world take root.
Blessed is the idle hand
For it shall lag and lack
Yes blessed is the one who steals and stores abroad
He shall truly be homeless
Wandering from clime to clime
And wondering good home could be
Wandering, wondering...
When shall we like the morning sun burst forth with light?
When shall we like the stream swirl with hope?
When shall talk cease and work increase?
When shall our nightly visions give way to mornings of fulfillment?
Wandering, wondering...
Bolaji Okusaga
Melancholic blues rings loud
On the alters of Nationhood
Mass-Servers in self-centred homilies
"Bless" our forlorn hopes
With sermons of democracy dividends
Wandering, wondering...
Normads on a journey to greenland
Sheep and Shepard in a sleepwalk
Wind-driven, like sails to neverland
Wandering, wondering...
Summits and talkshop
Outcomes a slogan: 2020!
More summits, more talkshops
Another slogan: 7 point agenda!
Still discussing, still planning
Another slogan: Due Process!
Wandering, wondering...
Another homily:
Blessed are those who talk
For from words did our world take root.
Blessed is the idle hand
For it shall lag and lack
Yes blessed is the one who steals and stores abroad
He shall truly be homeless
Wandering from clime to clime
And wondering good home could be
Wandering, wondering...
When shall we like the morning sun burst forth with light?
When shall we like the stream swirl with hope?
When shall talk cease and work increase?
When shall our nightly visions give way to mornings of fulfillment?
Wandering, wondering...
Bolaji Okusaga
Welfarism and Production - The Paradox of the Nigerian Context
STILL ON APC’S INSISTENCE ON THE N5,000 POLICY: WHAT IS THE PLAN? WHERE ARE THE RESOURCES? HOW SUSTAINABLE IS THIS?
I love campaigns and politics because both are platforms for elevated speeches and promises. But after elections, reality always beckons. Now, Alhaji Lai Mohammed, the APC spokesperson has insisted that the APC intends to keep this promise.
While I am not entirely condemning this plan, I am just imagining the implication of paying N5,000 naira monthly to the bottom 25 million and the humongous bureaucracy we need to create to make that happen; and since governance is about the allocation of priorities, I am also looking at how a whopping 1.3 Trillion naira from the national treasury annually will help achieve the goal of diversifying our economy and creating a sustainable basis for national wealth. While the welfare pay-out may make some sense from a preventive giving perspective, it begs the question from an economic sense, given that we are not yet an industrial society, able to meet its local demand and possessing the capacity for broad-based growth away from dependence on commodities. So what really are we trying to achieve? How are we going to manage this without giving rise to other negative consequences? Is it possible to reduce inequality, decrease social tension and create vents for shared prosperity through other means?
WELFARISM IN A LARGELY CONSUMING ECONOMY - WILL THIS BE AN INCENTIVE OR A DIS-INCENTIVE TO PRODUCTION?
The Industrial Revolution changed human life greatly by introducing exponential efficiency and creating more prosperous societies. But alongside the gains of the industrial revolution came other social ills, chief of which was inequality and social tension between the owners of production and labour. Following the negative impacts of the Industrial Revolution, Britain went from being a Welfare State (one that reaches out to the poor and indigent using the resource of the state) to a Welfare Society (one that seeks through measures such as taxation to redistribute wealth in order to reduce inequality and social tension).
A welfare state provides a range of goods to its citizens through legal entitlements; the welfare society, provides welfare through private means, essentially by taxing the rich to pay the poor. The latter being a refinement of the former, coming out of the Liberal Reforms of the 1940’s Britain, at the end of World War II.
THE VALUE JUDGMENT THAT PREDISPOSES A COUNTRY TOWARD A WELFARE SYSTEM –IS NIGERIA THERE YET?
The most important values judgment that predisposes societies to welfarism is that, if at least one is better off but no one worse off, the economy is better off. This judgment presupposes that aggregate production and, by extension, national wealth is adequate to cater for the weak and the indigent, while not acting as a disruptive force against production. But is Nigeria there yet?
HOW DO YOU DIVERSIFY YOUR ECONOMY IN A SITUATION WHERE MORE THAN A QUARTER OF THE NATIONAL BUDGET THAT CAN HELP CREATE AN ENABLING ENVIRONMENT FOR PRODUCTION IS GIVEN AS WELFARE PAY-OUTS?
For post-industrial societies, yes, welfarism may have some pertinence. But for societies hoping to build their productive base and aspire to a more efficiently run system which can guarantee more employment opportunities and increase national prosperity, welfarism may pose a big problem. This is because, in making the decision to push for welfarism, there is always the trade-off between equality and efficiency. While this may have some basis in a post-industrial society, it defeats the purpose in a pre-industrial arrangement. The APC need therefore to make its plan for implementing a N5,000 monthly stipend for the bottom 25 million clear so we can interrogate it. For like someone recently said, “a goal without a plan is merely a wish”. God bless Nigeria.
I love campaigns and politics because both are platforms for elevated speeches and promises. But after elections, reality always beckons. Now, Alhaji Lai Mohammed, the APC spokesperson has insisted that the APC intends to keep this promise.
While I am not entirely condemning this plan, I am just imagining the implication of paying N5,000 naira monthly to the bottom 25 million and the humongous bureaucracy we need to create to make that happen; and since governance is about the allocation of priorities, I am also looking at how a whopping 1.3 Trillion naira from the national treasury annually will help achieve the goal of diversifying our economy and creating a sustainable basis for national wealth. While the welfare pay-out may make some sense from a preventive giving perspective, it begs the question from an economic sense, given that we are not yet an industrial society, able to meet its local demand and possessing the capacity for broad-based growth away from dependence on commodities. So what really are we trying to achieve? How are we going to manage this without giving rise to other negative consequences? Is it possible to reduce inequality, decrease social tension and create vents for shared prosperity through other means?
WELFARISM IN A LARGELY CONSUMING ECONOMY - WILL THIS BE AN INCENTIVE OR A DIS-INCENTIVE TO PRODUCTION?
The Industrial Revolution changed human life greatly by introducing exponential efficiency and creating more prosperous societies. But alongside the gains of the industrial revolution came other social ills, chief of which was inequality and social tension between the owners of production and labour. Following the negative impacts of the Industrial Revolution, Britain went from being a Welfare State (one that reaches out to the poor and indigent using the resource of the state) to a Welfare Society (one that seeks through measures such as taxation to redistribute wealth in order to reduce inequality and social tension).
A welfare state provides a range of goods to its citizens through legal entitlements; the welfare society, provides welfare through private means, essentially by taxing the rich to pay the poor. The latter being a refinement of the former, coming out of the Liberal Reforms of the 1940’s Britain, at the end of World War II.
THE VALUE JUDGMENT THAT PREDISPOSES A COUNTRY TOWARD A WELFARE SYSTEM –IS NIGERIA THERE YET?
The most important values judgment that predisposes societies to welfarism is that, if at least one is better off but no one worse off, the economy is better off. This judgment presupposes that aggregate production and, by extension, national wealth is adequate to cater for the weak and the indigent, while not acting as a disruptive force against production. But is Nigeria there yet?
HOW DO YOU DIVERSIFY YOUR ECONOMY IN A SITUATION WHERE MORE THAN A QUARTER OF THE NATIONAL BUDGET THAT CAN HELP CREATE AN ENABLING ENVIRONMENT FOR PRODUCTION IS GIVEN AS WELFARE PAY-OUTS?
For post-industrial societies, yes, welfarism may have some pertinence. But for societies hoping to build their productive base and aspire to a more efficiently run system which can guarantee more employment opportunities and increase national prosperity, welfarism may pose a big problem. This is because, in making the decision to push for welfarism, there is always the trade-off between equality and efficiency. While this may have some basis in a post-industrial society, it defeats the purpose in a pre-industrial arrangement. The APC need therefore to make its plan for implementing a N5,000 monthly stipend for the bottom 25 million clear so we can interrogate it. For like someone recently said, “a goal without a plan is merely a wish”. God bless Nigeria.
Lee Kuan Yew and Singapore's Journey to Self Discovery - Any Lesson for Nigeria?
LEE KUAN YEW AND THE NANNY STATE MODEL:
Upon independence from Britain in 1965, no one gave Singapore the slightest chance of surviving. What with their domineering neighbor, Malaysia and the ethnic divisions within this thing Island State. However, the story of the transformation of Singapore - a tiny island with no natural resources into a thriving economic success - still confounds a lot of people including my humble self. As I re-read the book - "From Third World to First" - written by the protagonist himself, I am pondering on the amount of rigor and commitment Lee Kuan Yew applied on this interesting journey to self discovery.
NIGERIA - SEARCHING FOR FIFTY LOST YEARS...
Reading Lee Kuan Yew's book again, I can't help but search for parallels between Singapore in 1965 and the Nigeria of today. It suddenly dawned on me that Nigeria has lost fifty good years.
WHERE IS THE GRAND VISION? ARE WE NARROWING IT DOWN TO FIGHTING CORRUPTION AND RUNNING A WELFARE STATE AT A TIME OF DWINDLING RESOURCES?
All we are doing now is basically trying to lay bare plans on the table and if all I am hearing about spending to overcome the slow growth cycle and allocating 1.3 Trillion to a programme targeted at giving 5 thousand naira monthly stipend to 25 million people at the bottom of the pyramid, while keeping our bloated public service, is anything to go by, then I am not sure we are set to embark on a journey to recover our fifty lost years yet.
PROPOSING AN 8 TRILLION NAIRA BUDGET AND ALLOCATING LESS THAN 40% TO CAPEX WILL NOT GET US ANYWHERE;
Doubling the budget estimates at a time the revenue source of government, Oil, is fast losing value, only to spend a huge chunk of it on recurrent expenditure, is something I cannot comprehend. Where are we going to fund the budget from? I hear that President Buhari intends to borrow 2.10 Trillion naira; and I am really worried that we are not doing the hard rigor in finding solutions to Nigeria's economic imbalance. I think we are taking the easy route.
WE NEED TO AVOID THE GREEK SCENARIO.
Given the false protection which being in the Euro-Zone provided, for a long time,the government of Greece was using borrowed money to fund it's budget. The government of Greece prioritized welfare spending instead of focusing on building the Country's economic base through policies which encourage production. The government of Greece relied on one main source for revenue - tourism. As the global recession kicked-in in 2008, funds from tourism started to dry up and Greece's Creditors began to demand their money. The recession made it hard for Greece to pay back, because tax revenues were little, so keeping Greece's bloated public spending and pension programmes became a huge burden. And with a none existent production base and with tax evasion being commonplace and pension rights being unusually generous – there was no internal support base for Greece to fall back on. I hope Nigeria does not travel down that route. Rather than play Greece therefore, can we play Singapore - by investing in audacious infrastructure programmes and supporting production?
ENOUGH SAID - I AM ENJOYING LEE KUAN YEW'S BOOK.
I am praying for some kind of role-play and hoping that President Muhammadu Buhari could wear Lee Kuan Yew's character. I hope that dream can come to reality, because Nigeria truly needs a Nanny at this point.
Upon independence from Britain in 1965, no one gave Singapore the slightest chance of surviving. What with their domineering neighbor, Malaysia and the ethnic divisions within this thing Island State. However, the story of the transformation of Singapore - a tiny island with no natural resources into a thriving economic success - still confounds a lot of people including my humble self. As I re-read the book - "From Third World to First" - written by the protagonist himself, I am pondering on the amount of rigor and commitment Lee Kuan Yew applied on this interesting journey to self discovery.
NIGERIA - SEARCHING FOR FIFTY LOST YEARS...
Reading Lee Kuan Yew's book again, I can't help but search for parallels between Singapore in 1965 and the Nigeria of today. It suddenly dawned on me that Nigeria has lost fifty good years.
WHERE IS THE GRAND VISION? ARE WE NARROWING IT DOWN TO FIGHTING CORRUPTION AND RUNNING A WELFARE STATE AT A TIME OF DWINDLING RESOURCES?
All we are doing now is basically trying to lay bare plans on the table and if all I am hearing about spending to overcome the slow growth cycle and allocating 1.3 Trillion to a programme targeted at giving 5 thousand naira monthly stipend to 25 million people at the bottom of the pyramid, while keeping our bloated public service, is anything to go by, then I am not sure we are set to embark on a journey to recover our fifty lost years yet.
PROPOSING AN 8 TRILLION NAIRA BUDGET AND ALLOCATING LESS THAN 40% TO CAPEX WILL NOT GET US ANYWHERE;
Doubling the budget estimates at a time the revenue source of government, Oil, is fast losing value, only to spend a huge chunk of it on recurrent expenditure, is something I cannot comprehend. Where are we going to fund the budget from? I hear that President Buhari intends to borrow 2.10 Trillion naira; and I am really worried that we are not doing the hard rigor in finding solutions to Nigeria's economic imbalance. I think we are taking the easy route.
WE NEED TO AVOID THE GREEK SCENARIO.
Given the false protection which being in the Euro-Zone provided, for a long time,the government of Greece was using borrowed money to fund it's budget. The government of Greece prioritized welfare spending instead of focusing on building the Country's economic base through policies which encourage production. The government of Greece relied on one main source for revenue - tourism. As the global recession kicked-in in 2008, funds from tourism started to dry up and Greece's Creditors began to demand their money. The recession made it hard for Greece to pay back, because tax revenues were little, so keeping Greece's bloated public spending and pension programmes became a huge burden. And with a none existent production base and with tax evasion being commonplace and pension rights being unusually generous – there was no internal support base for Greece to fall back on. I hope Nigeria does not travel down that route. Rather than play Greece therefore, can we play Singapore - by investing in audacious infrastructure programmes and supporting production?
ENOUGH SAID - I AM ENJOYING LEE KUAN YEW'S BOOK.
I am praying for some kind of role-play and hoping that President Muhammadu Buhari could wear Lee Kuan Yew's character. I hope that dream can come to reality, because Nigeria truly needs a Nanny at this point.
Corporate Social Responsibility in the Age of Social Media
1. DEFINING CORPORATE SOCIAL RESPONSIBILITY (CSR)
Corporate social responsibility (CSR) evolved from the idea that corporations and business concerns have a duty of care to all the stakeholders that feature in their business cycle and business ecosystem – from production to packaging, marketing sales, services, suppliers and counter-parties as well as within the regulatory and social environment. These duty of care implies that corporations must express consideration for stakeholders and aim to mitigate adverse consequences which may arise from their operations.
From the forgoing, it is clear, that there is an ongoing dialogue as to the role of businesses in society. As society evolves, this dialogue increases sensitivity to, and awareness of environmental and ethical issues. This dialogue continuously throws up issues such as customer service, product / service quality, product stewardship, the role of business in protecting the environment, especially with climate change, the management of diversity in the work place and the treatment of women in the workplace. These issues are constantly highlighted in the media and in face to face conversations between the corporation and individual citizens in society. Given this never-ending scenario, governments and regulatory bodies, who act as umpires in these conversations, are constantly changing the terms of engagement in keeping with the need to protect society and citizens within the bounds of the social contract which exist between businesses and society. On the one hand, a crucial audience in this conversation, investors and investment community take account of the outcome of this conversation in rewarding or punishing corporations in terms of the flow of investments. While consumers, on the other hand, also gauges corporations CSR performance in their decision to extend or withdraw patronage for corporations. The need to stay above board in this conversation is constantly contributing to the pressure on corporations to operate in a socially, environmentally and economically sustainable way.
2. UNDERSTANDING THE STAKEHOLDER
As corporate organisations evolve into influential constituents in communities, business ethics became an important topic for governments and local communities. From the dark ages when religious institutions held so much influence, to the current clime, where business organisations dictate individual and collective destinies, the transformation of business from mere providers of value to centres of social developments dictated a change, not just in the perception of business by stakeholders, but also in the expectation from business, in the fulfillment of the social contract. Hence the importance of stake-holding in the social accountability process. The contract between an organisation and its stakeholders is built on a two-way exchange of value and expectations. While all the business organisation places value on delivering profits to shareholders, in its interaction with other stakeholders, it cannot afford to place profit as the fundamental driver of its interaction with the stakeholder. It must carefully navigate the demand of value creation and relationships with stakeholders in order for it to achieve its corporate objective
The need for stake-holding therefore arises in the demand for the business organisation to live up to its obligations and responsibilities in proportion to its influence in society. Hence an exposure of the business organisations and/or its executives for immoral and fraudulent conduct is usually punished, not just by the regulators, but by other stakeholders such as the consumer, who may withdraw patronage for such business organization, and by so doing hasten the death of the organization. Examples of such instance are the Enron / Arthur Anderson and Worldcom saga.
3. ACCOUNTABILITY AS KERNEL FOR CSR
Organisations exist in the public space, to deliver value which meet a need in society and bear both good and bad consequences for society. For example, an industrial concern producing products which are needed within the local community, aids the economy of the community by providing employment and allocating contracts to local suppliers on the positive end. But on the negative end, the industrial concern places a demand on land and other resources within its operating environment. Its operations may also come with environmental impacts such as the flaring of dangerous gases and the release of toxic wastes into public water ways. These dual consequences places a need for corporate accountability if the positive benefits are to be maximized and the negative consequences minimized. With openness and transparency on the part of the industrial concern, it is able to enter into a dialogue with the community on better ways of producing its products, while coming to compromise on the most sustainable route to guaranteeing a win-win bargain between itself and the society who enjoys the benefits of its products and bears burden of the negative outcomes from its production process.
Given the need for organisations to be open and transparent in their dealing and reflect an alignment with best business practices in their operations, the creation of an open world through the social media, places a real burden on corporations. Not only does the social media blur the line between what can be expressed in private and what can be expressed publicly, the fact that the platform is conversational rather than just being a listening platform also raises the bar in terms of engagement as well as accountability.
From the foregoing, it is clear that CSR as a business practice is evolving. And needless to state that the emergence of the social media makes it all the more compulsive.
4. CSR AND CORPORATE ENGAGEMENT – THE SOCIAL MEDIA NEXUS
Based on the need to strengthen corporate reputation, improve corporate performance and market attractiveness, companies over time have come to reckon with corporate social responsibility as a key vehicle for achieving their corporate objective. Hence, beyond the evolution of the concept of corporate social responsibility, the emergence of social media serves to broaden the context rather than the concept. From corporate philanthropy, which creates a platform for sharing without ingraining responsibility into company’s business practices, to the era of the triple bottom line, which extends the whole idea of corporate accountability beyond profits to its impact of business on people and the planet, to sustainability principles which discusses accountability more from a continuity and efficiency perspective – the emergence of the social media has served not only to broaden the base for accountability, but to also open up discussions on these issues with a wider segment of the population.
The nexus for discussion on key issues regarding responsibility and accountability therefore became more open, with engagements becoming wider given the virtual platform which social media avails. Beyond the social reporting sessions which physically brings stakeholders together to discuss the salience and relevance of corporate contribution, there is an ongoing discussion on corporate citizenship and responsibility in the virtual world
5. THE SOCIAL MEDIA LANDSCAPE
In today’s digital reality, where virtually everything that is happening in the real world is being replicated on cyber-space, the concept of Social Networking is an emergent phenomenon spreading across the globe with so much coming out of America, Europe and Asia and Africa.
Among the notable networks on the cyber space which has crashed into global thought and captured the popular imagination are:
1. Facebook
2. Twitter
3. Insagram
4. Linked-In
5. Google Plus
6. MySpace
7. Tagged
8. Cyworld
9. Bebo
10. Delicious
11. Hi5
12. Tribes.com
13. Orkut
Basically, a social network site is a web-based service that allows individuals to do the following:
• Construct a public or semi-public profile within a bounded system
• Articulate a list of other users with whom they share a connection
• View and traverse their list of connections and those made by others within the system.
Ever since the advent of the internet and computer –mediated communication, which first came in form of messaging and collaboration through electronic mail, the world has become a small place with ideas being traded across geographic borders. However, with the emergence of Social media a new dynamics was added to communication on the cyberspace. Today, most Social Network sites support the maintenance of pre-existing social media, but others help strangers connect based on shared interests, political views, or activities. Some sites cater to diverse audiences, while others attract people based on common language or shared racial, sexual, religious, or nationality-based identities. Sites also vary in the extent to which they incorporate new information and communication tools, such as mobile connectivity, blogging, and photo/video-sharing.
6. SOCIAL MEDIA: HOW IT WORKS
The backbone of Social Sites consists of visible profiles that display a list of Friends or contacts who are also users of the system. Profiles are unique pages where subscribers can reveal their personal details. After joining a social site, an individual is asked to fill out forms containing a series of questions. The profile is generated using the answers to these questions, which typically include descriptors such as age, location, interests, and an "about me" section. Most sites also encourage users to upload a profile photo. Some sites allow users to enhance their profiles by adding multimedia content or modifying their profile's look and feel. Others, such as Facebook, allow users to add modules or applications that enhance their profile. The visibility of a profile varies from site to site and according to user discretion. By default, profiles on some social sites are crawled by search engines, making them visible to anyone, regardless of whether or not the viewer has an account. Alternatively, LinkedIn controls what a viewer may see based on whether she or he has a paid account. Sites like MySpace allow users to choose whether they want their profile to be public or private. Facebook takes a different approach—by default, users who are part of the same "network" can view each other's profiles, unless a profile owner has decided to deny permission to those in their network. Structural variations around visibility and access are one of the primary ways that social sites differentiate themselves from each other.
While social sites are often designed to be widely accessible, many attract homogeneous populations initially, so it is not uncommon to find groups using sites to segregate themselves by nationality, age, educational level, or other factors that typically segment society, even if that was not the intention of the designers.
7. THE GROWTH OF SOCIAL MEDIA
Because of its appeal to groups and community, social media became a global phenomenon as people rally to own a chunk of the cyberspace where they could share their identity, thoughts and feelings on particular subjects of interest and have others do same. Overtime social media started to appeal to particular communities before opening up to others. A case in point is Facebook which was essentially a Harvard Network before becoming an open network.
Today popular Social media command billions in terms of user numbers and keep a huge data base of contacts and data for direct marketing and business networking.
8. SOCIAL MEDIA AND SOCIAL CAUSES
Beyond friendships and professional networking that were the primary purpose for the setting up of social sites, social sites such as Twitter, Google Plus and Facebook and Causes.com are getting increasingly visible in the corporate accountability space – either taking position on issues such as same-sex marriages, climate change, corporate misdemeanors and corruption.
With the invention of the mass media through the discovery of the printing press, the radio and television, inhibitions to the movement of information was greatly reduced. However, most of the information received were linear in nature as opposed to interpersonal and interactive communication, which allowed the refinement of positions in the communication encounter. Where rejoinders were given, the original information would have become cold and cannot be actively pitched with the response. All that was soon to change with the invention of the social media – a platform which allowed, not only for the dissemination of information, but more importantly, availed the immediacy of feedback in the communication encounter and created a conversational approach to information dissemination.
Given the extensive coverage of the social media, organisations are now more under scrutiny than they have been in history. Now organisations are made or marred in social communities depending on their corporate conduct, track-record and the openness of their business as well as their ability to engage on critical issues within social communities.
In this new reality, doing good and doing well are not enough, as organisations need to explain the basis of their action and constantly touch base with their target audience to explain their actions in order to stave-off a misreading of their intentions. Beyond explaining intentions, organisations must also live true to their creed as any deviation from thee corporate promise is immediately picked up in the social media and a negative trend may start to emerge around the organization. From allegations of a deep-fried rat in KFC menu, to the negative trend around the BP Oil spill in the Gulf of Mexico, to the United Airline’s breaking a Guitar saga, to local corporate misdemeanors such as the MTN /NCC fine issue and frequent customer complaints on poor customer service in the Nigerian banking industry, organisations are constantly being held against their defined creed, product quality, production and safety process, service charter and declared CSR philosophies in the new court of public opinion which the social media provides.
9. SOCIAL REPORTING AND SOCIAL MEDIA
Social reporting basically implies civic engagement involving stakeholders within the social and operation environment of corporation which are set-up to explain intentions, request feedback on social interventions and agree better ways of achieving the social contract between the organisations and its various stakeholders within the defined community. In this process, players within the community, the civic and professional space participate directly or indirectly in exacting responsibility and commitment from the organization. It can be initiated by the organization itself, the government acting through regulatory bodies, the private sector acting through trade or business groups or civil society actors who are watchdogs monitoring alignment with self-declared commitments by the organization or its compliance with codified and extant regulations.
In the social reporting process, the following issues are reported, tested and validated by host communities acting through informed observers:
- The social relevance of business strategy
- Organizational profile and social commitment
- Stakeholder priorities and engagement
- Governance framework
- Ethics and Integrity
With the advent of the social media, the social reporting process has moved from being a cycle or calendared activity to a daily requirement for businesses and corporations. This is because, the social media places enormous social and environmental pressures on corporations and increases the attention paid to day-today social incidents, which were before now unnoticed given the news cycle and the linear nature of traditional news media, with agenda setting being the sole prerogative of media gate-keepers. All that has changed with the social media, as institutional gate-keeping has given way to social gate-keeping, giving the ordinary man on the street the power to set business agenda. From public responses to issues such as the BP Gulf of Mexico and Exxon Valdez oil spills to the Nike child labour issue in the Philippines – the average citizen with an active network on the social media has proved to be as strong, if not stronger than the traditional newshound. From these examples, it is clear that the social media, given its extensive reach, has increased the pressure for corporate disclosures and altered the basis for gauging the perception of corporate organisations, while changing the framework for corporate social reporting and corporate accountability mechanism as well as the measurement of corporate image and corporate reputation.
10. MAKING CORPORATE RESPONSIBILITY TRULY SOCIAL
The importance of the social media in shaping the perception of the corporate enterprise cannot be over-emphasized; for not only is the social media a platform which brings the corporate organisation together with its publics, it also serves as a forum for the discussion of corporate conduct and performance. And given that corporate responsibility and the social media are both evolving and emergent phenomenon, with great public interest and investment, there is a need for organisations to become more active participants in discussions which shapes the role of corporate organisations in society as well as and expectation arising therefrom.
From the foregoing, it is clear that the social media has hastened the transition of corporate reporting from a corporate ritual with mere information transmission to active stakeholder participation in an ongoing conversation which seeks answers to pressing questions regarding the integrity of the business, its willingness to operate transparently and be open to constant scrutiny on its products / service, corporate conduct, contributions, economic viability and sustainability as well as its role in society.
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