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NIGERIA ECONOMIC OUTLOOK 2023

by with No Comment By Tayo AreEconomy

Economic growth in Nigeria this 2023 is expected to be at 3 percent., dropping from last year’s 3.2 percent. This follows a pattern of the last three years. Growth rate was at 3.6% in 2021. It dropped to 3.2% last year 2022 and will further drop by 0.2% to remain at 3.0%  this year. This is somehow still on a positive growth trajectory. This is far ahead of South Africa whose economic growth dropped from 2.1% in 2022 to 1.1% this year.

 In terms of fiscal, Monetary Policies, there is need for some rejigging. And the roles of  go-getters, major stakeholders within the command post of the economy is critical to Nigeria’s success this year 2023. The key players here include policy makers, especially those in the ministry of finance and the governor of the Central Bank, Then come movers and shakers of the economy such as Aliko Dangote, Oba Otudeko, Abudlsamad Rabiu. Mike Adenuga,Tony Elumelu  and others.

It is this crop of go-getters that Nigeria needs now to rescue the economy from going into recession. The in-coming administration, after May 29th, will need them so much to help in organizing a reboot of the economy, freeing it from the rot that is getting messier everyday. They have the wherewithal and courage to organise the clean-up in a way that will free the population from the pain, hopelessness and anger standing between them and a new beginning.

Of course, it is a fact that the link between President Muhammadu Buhari’s government and the incoming administration, that will succeed him with the February 25th polls, is the 2023 federal budget. Against this background, the budget focuses on maintaining fiscal viability and ensuring a smooth transition to the incoming administration. The proposed 2023 federal government budget implies a general government fiscal deficit of about 6 percent in 2023 compared to an estimated 6 percent in 2022.

As at now, the Nigerian economy is ailing. The indicators are not very encouraging. Nigeria’s N21.83tn 2023 federal budget has about N12tn deficit component. The capital expenditure component of it is about N6.4trillion while debt service will swallow N6.3trillion.

At the same time, multidimensional poverty is plaguing the country, putting 133 million Nigerians below the poverty line according to the National Bureau of Statistics. The unemployment figure stands at over 33 percent as many micro, small, and medium enterprises (SMEs) groan under the heavy cost of doing business. The mortality rate of many businesses in Nigeria is high, largely due to the high cost of energy (electricity and petroleum products insecurity, and lack of adequate infrastructure as well as the government’s policy summersault.

With the high cost of fuel importation and a weak Naira, it is possible that the petrol subsidy will be removed in the second half of 2023. According to government sources, trillions of naira being spent to subsidize the cost of imported refined fuel can best be deployed to improve social services and infrastructure.  Within the course of the year, if this is done, there is bound to be a rise in commodity prices, and this can lead to social unrest unless cleverly managed.

However, if those at the levers of policy-making and those in the forefront of economic power in Nigeria put in their best and harmonize things together, Nigeria can sustain its projected growth rate this 2023 without plunging into recession, predicted to assail a third of the countries of the world by both the World Bank and the International Monetary Funds (IMF).

So as President Muhammadu Buhari and his cabinet bow out in April, there are expectations that a new Nigerian economy will be unveiled when all the contending issues will be treated. These include the deregulation of the petroleum downstream sector; consolidation of the power sector reform; prioritisation of infrastructure financing, resetting of the monetary policy, resolution of the foreign exchange market crisis, and fight against corruption and policies that will aid employment generation.

Within the oil industry, issues to be tackled include the twin challenges of low crude oil production and oil theft. And within the economy generally, deregulation of the petroleum downstream sector, and the pending reforms in sectors like telecoms, aviation, capital market, insurance and Micro, Small and Medium Enterprises are of essence.

 NNPC/Dangote Refinery

Amid the confusion in the petroleum industry and the perennial fuel scarcity, expectations are rife that with the coming onstream of the Dangote Refinery, especially in the first quarter of the year, Nigeria will heave a sigh of relief given the reality that a private refinery will be run profitably and efficiently.

Reports said that the Dangote Refinery is nearing completion as pre-commissioning tests reach concluding stages making a launch date in the first quarter of 2023 feasible.

Sources close to the company’s plans said the refinery, billed as the largest single-train refinery in the world with a capacity to process 650,000 barrels per day could see the first refining runs begin as early as March.

The integrated refinery and petrochemical complex in the Lekki Free Zone near Lagos, Nigeria, will produce Euro-V quality gasoline and diesel, as well as jet fuel and polypropylene and will likely generate 4,000 direct and 145,000 indirect jobs.

It is expected to double Nigeria’s refining capacity and help in meeting the increasing demand for refined petroleum products while providing cost and foreign exchange savings. It is estimated to have an annual refining capacity of 10.4 million tonnes of petrol.

On the other hand, the Nigerian National Petroleum Company Limited, on behalf of the federal government, controls four refineries which include: the Kaduna Refining and Petrochemical Company, Warri Refining and Petrochemical Company, and Port Harcourt Refining Company.

In the face of poor performance and huge overheads, experts say fixing Nigeria’s unprofitable refineries to functional capacity has remained a pipe dream since 1999.

Banking sector

Overwhelming pattern across Nigeria would seem to suggest a readiness of some banks to maximize Nigeria’s promise of greatness and support more the real sector. A slew of events is expected to determine in the economy this year. Whether most banks will play a growing emboldening of the business landscape is another thing, but certainly some of them

Telecom Sector in 2023 

The telecom sector will perform optimally this year. This is the verdict of the Chairman of the Association of Licensed Telecom Operators of Nigeria (ALTON), Mr. Gbenga Adebayo, He said Fintech and Data Application will be the major drivers of the economy in 2023.

According to him, there will be increased data analytics that will inform major decision-making in 2023, driven by increased data application. He said Fintech would get more support from telecom operators in 2023 which would enable them to develop more solutions that would further support financial transactions across the board.

This is quite possible when one looks at the gains of the telecom sector and how it positively impacted the Nigerian economy in 2022 in the areas of GDP growth, broadband penetration, and Fintech growth.

Capital market Investors

Most listed banks, Fast Moving Consumer Goods (FMCG), and cement manufacturing companies will announce impressive performances in continuation of the 2022 performance that has attracted increased trading on the bourse.

As the inflation rate currently at 21.47 percent as of November has eroded investment, the pension fund administrators, and retail investors have increased their investment in fundamentals stocks and at the same time divest to fixed-income securities in a move to gain attractive yield on their investment above the inflation rate.

The trend, according to analysts will continue in 2023 as investors’ shift might thrust the stock market into negative territory in the first quarter of the year when Independent National Electoral Commission (INEC) will conduct the general elections.

The Chief Managing Director, of Highcap Securities Limited, Mr. David Adnori said, “With the expectation of relatively high yields in the fixed income market, especially in the first half of 2023, most investors are expected to patronise the bonds market more.

Equally, analysts at Cordros securities forecasted interest rates domestically to remain high over 2023. According to them, “At the same time, we expect currency pressures to persist in the absence of any positive signal that denotes an improvement in FX supply relative to the pre-pandemic levels.”

Naira Exchange Rate and Inflation

The USD to Naira Exchange Rate experienced a sharp rise last year,  and Nigeria’s CPI changes have been harsh. Since supply chain disruptions in developed countries have triggered global inflation, there is cause for concern within the Nigerian economic landscape. As the downward pressure on the Nigerian economy increases, it is imperative to stabilize growth. The combination of exchange rate depreciation of the Naira and imported inflation has aroused many concerns.

The nominal effective exchange rate trend of the Naira has high correlation with Nigeria’s CPI and has a tendency to gradually strengthen, while the correlation with PPI and import and export prices is higher.

In the one-way transmission mechanism, the exchange rate can, directly and indirectly, affect Nigeria’s consumer prices. Due to the relatively high proportion of import consumption in the country, the direct impact of the exchange rate on the Consumer Price Index is quite high. Therefore, it is mainly based on direct transmission and cost promotion.

However, whether the transmission is smooth or not is still affected by economic expectations and monetary environments.

The state of the economy, not the exchange rate, is the most important factor affecting the CPI in Nigeria. Therefore, the government should do a good job of stabilizing the supply of commodities and monitoring market prices to help alleviate the concerns of further inflation outbreaks, while also stabilizing monetary policy expectations and strengthening market confidence.

Experts say Nigeria can sustain its projected growth rate without plunging into recession, with all hands being on deck .

To Dr. Muda Yusuf- the Director of the Centre for the Promotion of Private Enterprise, political environment will have much to do with the economy this 2023. He is of the view that the quality of the transition programme will determine the quality of the leaders to be elected. According Dr Yusuf, this is why the current administration must ensure that people’s votes count on election day.

He maintains that “the political environment has a major impact on economic and business performance. Therefore, the quality of the political transition process, especially the credibility of the 2023 elections would be of contextual significance for the economy in 2023.  The elections must be free, fair, transparent and credible. “And it must be seen to be so.  This underlines the need for the independence, neutrality and credibility of the key institutions involved in the election management process – INEC, the Judiciary and the security agencies.  The quality of the democratic transition and choices would significantly impact economic outcomes in 2023.”

To Prof. Omowumi Iledare, petroluem subsidy payment is part of the woes of this country, as it is linked to foreign exchange problem. .A professor of Energy Economics and past President, Nigeria Association of Energy Economics, Prof. Iledare, insists on the need for stopping subsidy. He said Nigerians cannot afford to burn public funds on the tail pipe of cars.

“Subsidy will collapse the Nigerian economy and it is already doing it. When you are spending one trillion naira a year over 10 years to subsidize petrol consumption, not for economic sustainability, then you cannot survive it.”.

He adds that a general government deficit of this magnitude would entail additional central bank financing given the difficult external environment and the need to limit crowding out of the private sector. According to him, “Macroeconomic trade-offs imply that when inflationary pressures are high as is the case in Nigeria, fiscal policy should protect the most vulnerable while pursuing a tightening stance to avoid overburdening monetary policy in the fight against inflation.

For the in-coming administration, there is a need for political commitment at the highest level and broad buy-in from stakeholders is crucial to improving revenue collection.

What is critical for the government is that the economy must be diversified and the oil revenue projections in the 2023 fiscal appropriation must be met for the economy.

Next is the need to redesign the existing tax policy to favour growth-enhancing activities. The government also need to assess the effectiveness of existing fiscal incentives. Efforts to design more progressive tax systems and boost tax collection — particularly, property and/or land taxes — will surely help. This will have to be combined with increasing the VAT rate, streamlining existing VAT exemptions, and increasing existing excise rates on alcoholic and tobacco products.

As the two major monetary policies introduced last year take effect this January, analysts believe the current administration has begun to position the economy for the needed reforms. These are the Naira redesign and the withdrawal limit, which seek to checkmate the activities of currency dealers, criminally minded individuals who indulge in kidnapping and robberies as well as politicians who engage in vote buying.

Much is also expected in the foreign exchange sector as more dollars are expected to be generated by enhanced non-oil sector activities and the anticipated commencement of the Dangote Refinery. Then inflation must be anchored while the problem of foreign exchange should be significantly tackled when the Dangote refinery goes into operation, helping Nigeria to do away with using huge foreign exchange on importation of refined petroleum products.

 

 

Godwin Emefiele

THE SENATE AND CBN AUTONOMY AS GODWIN EMEFIELE SEEKS TO MOVE NIGERIA AWAY FROM CONSUMPTION

by with No Comment By Amos BalogunBy Kunle Olu OjoEconomy

Leaders have integrity and never compromise it. Integrity is defined as your moral compass, the ability to judge between what is right and wrong and act accordingly. This is what Godwin Emefiele, governor Central Bank of Nigeria (CBN) personifies.
As CBN governor, Emefiele has maintained the integrity of the apex bank in terms of its own side of the framework of economic management through monetary policy. So in terms of monitoring cost, availability and supply of money within the economy, Emefiele has been wonderful, entrenching stability and engendering economic development in Nigeria.
His focus has been to make the CBN work within the context of its enabling Act to deliver value that ensures the sustainable growth of the Nigerian economy and win the country away from consuptioon. So the CBN continues to maintain sound financial structure, promote monetary stability, safeguard the value of Naira and stable exchange rate, proving to be a financial adviser to the federal government in the areas of price and exchange rate management, development financing, building foreign reserves and employment creation.
With his re-appointment by president Muhammadu Buhari in 2016, he introduced various intervention funds to control market failure within the economy. The CBN under his leadership has been resolute at ensuring economic growth and financial stability through strategic policies that will move Nigeria away from consumption to production through critical interventions and policies such as import susbstitution . In promoting import substitution through development financing, CBN rightly removed some 43 imported goods from the list of some items valid for Forex Exchange in the Nigerian Foreign Exchange Market.
Equally, it has consistently resisted the pressures to return to “staggering and undulating foreign exchange rate in relation to the naira due to pressures by speculators, bettors, round-trippers and rent-seekers.
It is such policies that have helped the CBN to navigate the Nigerian economy through economic challenges such as economic recession/stagflation, COVID-19 pandemic, interest rate issues, foreign exchange rates, external reserves, exchange rate, financial inclusion and the gap in the agricultural value chain.

For this reasons, Forbes Media New York earlier in May this year honoured the CBN governor with the Forbes Best of Africa Lifetime Achievement Award.
Forbes in partnership with Foreign Investment Network, FIN, also issued Emefiele with its certificate of distinction.In its letter of award to Emefiele and signed by the President, Customs Solutions Media for Forbes Media, Mr Mark Furlong, Forbes disclosed that it decided to honour the CBN governor on the grounds of his remarkable performance and pace-setting achievements at the apex bank.
“It therefore comes as no surprise that you have brought the same ‘can-do’ spirit to your job as Governor of the Central Bank of Nigeria. Although you took over at the CBN in 2014 when the economy was already in the doldrums, the naira weak, oil price falling and Nigeria’s foreign reserves at a very low ebb, three years later you have recorded appreciable progress in salvaging the economic fortunes of your country.
“In keeping with your vision to “…create a people-centered Central Bank by delivering price and financial system stability and promoting sustainable economic development,”
Curiously, at this time that Emefiele is being recognized that the Nigerian Senate is planning to cut down the autonomy of the CBN and thunder down the Nigerian economy.
On 27th September 2022, the senate passed for a second reading a Bill to amend the Central Bank of Nigeria (CBN) Act, 2007. The Bill is clearly meant to whittle down the powers of the Governor of the Central Bank of Nigeria (CBN).
The proposed legislation was sponsored by Senator Sadiq Suleiman Umar, who is representing Kwara North Senatorial District at the National Assembly. The senator, in his lead debate, sought an amendment to the Central Bank of Nigeria’s (CBN) Act No. 7 to remove the powers of the governor from determining the appointment of anyone into the services of the apex bank.
Umar proposed that the new Chairman of Board of the Central Bank should have powers to determine salaries and allowances of members, while the governor focuses strictly on administrative duties in the running of the bank.
The senator further argued that the board should be responsible for the annual budget of the bankers’ bank which he said is the global standard.
He said: “A bill for an Act to amend the Central Bank of Nigeria (CBN) Act No. 7 of 2007 to enable the appointment of a person other than the governor as the chairmen of the board, divest the board of the powers of determining and fixing salaries and allowances of its members.
At that day’s plenary, the Bill having passed the second reading was referred to the Senate Committee on Banking, Insurance and Other Financial Institutions for further legislative input. The committee is expected to report back in four weeks.
The Bill focuses on three issues. First, the appointment of an outsider as the chairman of CBN Board of Directors; second, fixing the remuneration of board members . Third is the approval of annual budget to be submittesed to the National Assembly (NASS) for consideration.
Analysts say with regard to the three issues above, the Senate seem not to appreciate the sensitive and unique role of a central bank in the economy. They add that this proposed amendments seek to erode the bank’s operational independence contrary to the existing section 1(3) of CBN Act 2007 which states “——the Bank shall be an independent body in the discharge of its functions.”
An economist Dr Taiwo Babalola of Babcock Univeristy say the senators are acting in ignorance, pointing out that they want to completely destroy foreign investors confidenc e in the Nigerian economy.
“Tell me, which foreign investors will bring his money to a clime where the central bank is under the control and manipulations of politicians? Those people are rascals like a man who wants to set his house on fire because a rat has entered there. Why should you plan to push the nation’s economy into disaster in an attempt to destroy the sacredness of an institution just because you have a vendetta agenda against take the present occupant of the office? What are they saying the CBN has done that they want to take the autonomy away?”
Dr Babalola explains that the problems of inflation and foreign exchange crisis come from fiscal failure and failure on the part of the National Assembly, of which the Senate is a part. He adds that the debt burden on Nigeria which the Senate helped create through their lack of principled stance to interrogate the reasons for huge loans.
He referred to the 2020 Macroeconomic Outlook of the Nigerian Economic Summit Group (NESG). He disclosed that in the NESG stated at that time that Nigeria’s mounting debt profile was a major concern despite the country’s $900 billion worth of dead capital in property and agricultural lands. He argued that while borrowing may be inevitable, especially at a period like this, there are serious concerns at the rate these debts are being piled up. Aside the fact that the funds are not being deployed into projects that generate income, borrowing should not be done in such a way to mortgage the future of the country and its sovereignty. Dr Babalola said.
“Is it Emefiele that approved unsustainable loans for President Muhammadu Buhari? Is it Emefiel that help put heavy debt burden on Nigeria,with 80 of our earnings going for debt servicing? Are they not knowledgeable enough to know that CBN is not responsible for fiscal policy and trade policy?
Mr Abiodun Shopitan, a former director in the CBN believes some elements in the Senate are on a vendetta mission. “We need a high power Central Bank autonomy. That autonomy should not be taken away. the National Assembly shouldn’t throw away the baby with the birth water. Amending CBN Act 2007 is unnecessary. Just because of one man they want to destroy the entire Nigerian economy. That is a no, no, for any sane mind.”
In the opinion of Mr Ganiyu Ogunleye, a former top brass of the CBN, the apex bank currently exercises its regulatory and supervisory independence under the provisions of BOFIA, 2020 Institutional Independence: entails security of tenure of executive management, governance structure composed of experts, freedom to conduct monetary policy as well as open and transparent decision-making process while Budgetary Independence: involves insulation from political pressure, freedom to staff the agency and prompt response to imminent financial sector crisis but subject to clear accountability framework.
“The CBN Act 2007 has provisions to ensure institutional and budgetary independence which should not be tampered with. It should be emphasised that budgetary independence is critical to any central bank’s ability to exercise the three other dimensions of its independence. Neither its lender of last resort role nor its financial system stability mandate can be effectively executed without budgetary independence. Regrettably, the proposed amendments by the Senate will effectively erode CBN independence. It is therefore, recommended that the Senate should let the four dimensions of independence enunciated in this contribution guide its deliberations. The lawmakers are urged to appreciate that the four dimensions of central banks’ independence are internationally accepted, and Nigeria should not be an exception.”
These men of intellect are right indeed that CBN autonomy should not be tampered with. The apex bank has done quite a lot in the areas of intervention funds in its quest to wean Nigeria away from consumption to production and employment generation. Currently, the CBN has 37 intervention funds targeted at stimulating the economy and addressing the issue of unemployment.
The CBN under the leadership of Emefiele introduced various interventions, which were born out of market failure and other critical issues within the nation’s economic space, according to Osita Nwanisobi, CBN’s acting director, corporate communications department.
Now let us take a look at some of Emefiele key achievements so far revealed that the country has recorded significant growth in banks credit to private sector by 92.79 percent year-on-year to N32.64 billion in June 2021 from N16.93 billion in June 2014, when Emefiele became the governor of the CBN.
The huge increase in banks credit growth was driven by the policy of Loan to Deposit Ratio (LDR), which the CBN under the leadership of Emefiele introduced in September 2019.
Under the Emefiele’s led Central Bank’s development finance initiatives, the Bank granted N756.51 billion to 3,734,938 small holder farmers cultivating 4.6 million hectares of land, of which N120.24 billion was extended for the 2021 Wet Season to 627,051 farmers for 847,484 hectares of land, under the Anchor Borrowers’ Programme (ABP); for the Agribusiness/Small and Medium Enterprise Investment Scheme (AGSMEIS), the sum of N121.57 billion was disbursed to 32,617 beneficiaries; and for the Targeted Credit Facility (TCF), N318.17 billion was released to 679,422 beneficiaries, comprising 572,189 households and 107,233 Small and Medium Scale Enterprises (SMEs).
Also, Under the National Youth Investment Fund (NYIF), the Bank released N3.0 billion to 7,057 beneficiaries, of which 4,411 were individuals and 2,646 SMEs. Under the Creative Industry Financing Initiative (CIFI), N3.22 billion was disbursed to 356 beneficiaries across movie production, movie distribution, software development, fashion, and IT verticals.
The CBN under the N1.0 trillion Real Sector Facility, released N923.41 billion to 251 real sector projects, of which 87 were in light manufacturing, 40 in agro based industry, 32 in services and 11 in mining.
On the N100 billion Healthcare Sector Intervention Facility (HSIF), N98.41 billion was disbursed for 103 health care projects, of which, 26 are pharmaceuticals and 77 are in the hospital services. Similarly, the sum of N232.54 million was disbursed to 5 beneficiaries under the CBN Healthcare Sector Research and Development Intervention (Grant) Scheme (HSRDIS) for the development of testing kits and devices for Covid-19 and Lassa Fever.
Under the National Mass Metering Programme (NMMP), N36.04 billion was disbursed to 17 Meter Asset Providers, to nine (9) DisCos, for the procurement and installation of 657,562 electricity meters. On the Nigerian Electricity Market Stabilization Facility – 2 (NEMSF-2), the CBN released N120.29 billion to 11 DisCos, to provide liquidity support and stimulate critical infrastructure investment needed to improve service delivery and collection efficiency.
All these are geared towards moving Nigeria away from just a consuming nation to producing and exporting country. For this reasons, Emefiele has drawn praises across the waters-Meditteranen, Pacific and Atlantic.

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OFFICE OF THE ACCOUNTANT GENERAL OF THE FEDERATION

by with No Comment Economy

FAAC SHARES N699.824 BILLION DECEMBER 2021
REVENUE TO FG, STATES AND LGCs

The Federation Accounts Allocation Committee (FAAC) has shared a total of N699.824 Billion December 2021 Federation Account Revenue to the Federal Government, States, and Local Government Councils.
This was contained in a communiqué issued at the end of a virtual meeting of the Federation Account Allocation Committee (FAAC) for January 2022.
The N699.824billion total distributable revenue comprised distributable statutory revenue of N507.267billion; distributable Value Added Tax (VAT) revenue of N187.409 billion and Exchange Gain of N5.148billion.
In December 2021, the total deductions for the cost of collection were N30.003 billion, and the total deductions for statutory transfers, refunds and savings was N36.643 billion. The balance in the Excess Crude Account (ECA) was $35.368 million.
The communiqué confirmed that from the total distributable revenue of N699.824 billion; the Federal Government received N279.457billion, the State Governments received N221.190 billion and the Local Government Councils received N163.879 billion. The sum of N35.297 billion was shared with the relevant States as 13% derivation revenue.
The distributable statutory revenue of N507.267 billion was available for the month. From this, the Federal Government received N248.885 billion, the State Governments received N126.238 billion and the Local Government Councils received N97.324 billion. The sum of N34.820 billion was shared with the relevant States as 13% derivation revenue.
In the month of December 2021, the gross revenue available from the Value Added Tax (VAT) was N201.255 billion. This was higher than the N196.175 billion available in the month of November 2021 by N5.080 billion.
The sum of N5.796 billion allocation to NEDC and N8.050 billion cost of the collection were deducted from the N201.255 billion gross Value Added Tax (VAT) revenue, resulting in the distributable Value Added Tax (VAT) revenue of N187.409billion.
From the N187.409 billion distributable Value Added Tax (VAT) revenue, the Federal Government received N28.111 billion, the State Governments received N93.705 billion and the Local Government Councils received N65.593 billion.
The Federal Government received N2.461 billion from the total Exchange Gain revenue of N5.148 billion. The State Governments received N1.248 billion, the Local Government Councils received N0.962 billion and N0.477 billion was shared to the relevant States as 13% derivation revenue.
According to the Communiqué, in the month of December 2021, Companies Income Tax (CIT) and Value Added Tax (VAT) increased reasonably, Petroleum Profit Tax (PPT) and Oil and Gas Royalties decreased significantly while Import and Excise Duties decreased marginally.

RELOAD DEC 2021 TELESCOP

How CBN is Pushing the Frontiers of the Economy for Macroeconomic Stability and sustainable Growth on the Watch of Godwin Emefiele

by with No Comment BankingEconomy

Godwin Emefiele, Governor Central Bank of Nigeria (CBN) is a man of insight passionate about quality decisions in his tasks of targeting inflation, ensuring interest rate stability, and employment generation to fully support productivity and society. These roll on the back of quality decisions to achieve macroeconomic stability to push the frontiers of the economy for sustainable growth and economic development.  The most recent action in the Nigerian monetary policy authorities is the eNaira.

President Muhammadu Buhari launched  Nigeria’s digital currency at the Presidential Villa, Abuja on Monday, October 25th. In announcing the launch of the e-Naira, the CBN stated that the product, which was put together following many years of research, would advance the boundaries of the payments system in order to make financial transactions easier.

With this launch, Nigeria, Africa’s largest economy in terms of GDP and the continent’s most populous country (over 200 million inhabitants), is a pioneer on the continent, alongside Ghana, which has been testing its e-Cedi as a new means of exchange since September.

“We have become the first country in Africa and one of the first in the world to have introduced a digital currency for our citizens,” said President Buhari.

According to Mr Emefiele,  the eNaira would support a resilient payment ecosystem, encourage rapid financial inclusion, reduce the cost of processing cash, enable direct and transparent welfare intervention to citizens and increase revenue and tax collection. He said eNaira would also facilitate diaspora remittances, reduce the cost of financial transactions, and improve the efficiency of payments.

“Therefore, the eNaira is Nigeria’s CBDC and it is the digital equivalent of the physical naira. As the tagline simply encapsulates, the eNaira is the same naira with far more possibilities.

“The eNaira – like the physical naira – is a legal tender in Nigeria and a liability of the CBN. The eNaira and naira will have the same value and will always be exchanged at one naira to one eNaira.”

  eNaira benefits include:

The e-Naira is expected to foster economic growth by offering easier access to capital and financial services which will increase economic activities at low/no interest transaction rates.

It is also expected to provide secure and cheaper diaspora remittance options and make such transactions faster.

Due to its traceability, the e-Naira makes it more difficult for individuals or organizations to indulge in fraud.

While the impossibility of being forged, makes it very strong and reliable, the e-Naira provides financial inclusion by making financial services available to communities without enough banking opportunities.

Local and international trade is expected to be increased with the emergence of the e-Naira, and the nation’s digital currency is expected to aid revenue collection by reducing the cost of handling cash.

Thus eNaira is Part of the CBN’s strategy to enhance the country’s macro-economic stability. Notably,  macroeconomic stability eliminates uncertainty in economic activity, increases the country’s investment attractiveness, as well as increases the economic activity in the future. The level of macroeconomic stability is the key to assessing investment risk.  The greater the level of macroeconomic stability, the greater the market confidence and propensity to take risks.  In the period that Mr. Emefiele has been in the saddle, the CBN has been aggressively pushing strategies to ensure that the level of macroeconomic stability increase.

Crucially, the Nigerian economy is factor-driven , just it is monolithic. Oil contributes more than 80 percent of foreign exchange earnings, a development that readily exposes the economy to shocks. The economy is also largely import-dependent without much production. Then there is a heavy reliance on fuel importation.  These show serious fundamental flaws in the economy. It was reported that the economy recorded the highest import bill of N6.85 trillion in twelve years with a 54 percent increase during the first quarter (Q1) 2021. Equally, the trade deficit stood at N5.81 trillion in first half (H1) 2021.

There is also the challenges of the inability of the country to issue debt in local currency and reliance on external grants and concessional loans to fund government deficits and capital spending .

All these places a lot of burden on the economy and even the value of the Naira.  So exchange rate issue gradually becomes a sore point. This has caused many to raise concerns over the health of the economy,  even as CBN has been aggressive in formulating policies in the management of both the demand and supply of the intractable foreign exchange challenge. CBN is doing its best here to ensure macroeconomic stability.

The exchange rate is the price of one currency in terms of another and it is the backbone of international trade. It helps to determine the health of an economy and the well-being of citizens through the quantum and ratio of imports and exports. A country’s exchange rate is determined by its foreign exchange earnings, by its production and export as well as external reserves, and a number of variables interplay in the dynamics of foreign exchange.

In the absence of strong productivity and huge oil import, the Naira weakens. And this has led to strong criticisms of the Central Bank of Nigeria, CBN and its Governor Mr Emefiele.  And while concerns rage over exchange rate issues, some observers  also point out that there seems to be no synergy between fiscal policy of government and CBN’s monetary policy.

This is true, of course.  Many economists and  private sector leaders see the need for more synergy between fiscal and monetary policy. The Executive branch is responsible for that. The CBN is charged with formulating monetary policy to complement the fiscal policy in the attempt to grow the economy, control interest and exchange rates and curb inflation while aiming to provide jobs.

And lately, Vice President, Professor Yemi Osinbajo has also voiced his concern over this lack of synergy .  He felt the CBN is intruding into the terrain of fiscal policy, which is the exclusive forte of the executive.  He recently observed.

“There must be synergy between the fiscal and monetary authorities. We must be able to deal with the synergy; we must handle the synergy between the monetary authority, the CBN, and the fiscal side.

Sometimes, it appears that there is competition, especially on the fiscal side. If you look at some of the interventions, you will find that those interventions are interventions that should be managed by the ministries.

“The Ministry of Industry, Trade and Investments should handle MSMEs (micro, small and medium enterprises) and we should know what CBN is doing. In other words, if the CBN is  intervening in the MSME sector, it should be with the full cooperation of the Ministry of Industry….”.

 

Of course, in recent times,  the CBN has involved in a lot interventions in order to stimulate local production , maximize the potentials of the economy and achieve the goals of macroeconomic stability. CBN Governor Emefiele is well aware that in the absence of any coherent, comprehensive and comprehensible fiscal policy, he has to act to prevent economic crises.  And that he has been doing.

Of course, just as it is a primary duty of CBN to formulate monetary policies to drive the economy, there are also some fundamental and aberrant factors inherent in the economy that damp  some policies, aimed at stimulating energetic inflows and pushing the frontiers of the economy further.

Until those fundamentals are tackled, the economy may continue to witness exchange rate instability. It is well known that the economy is factor-driven and monolithic, with crude oil contributing more than 80 per cent of foreign exchange earnings. Then the economy is import-dependent.

Ordinarily large scale importation is good because it indicates that an economy is robust. It also offers citizens wider product choices even at cheaper rates. But it becomes problematic when it is not matched with a robust manufacturing base, exports and other services such as tourism which promote foreign exchange inflows.

Other challenges of the economy include what development economists call the commitment of “original sin,”which  is the inability of a nation to issue debt in local currency and reliance on mostly external grants and concessional loans to fund government deficits and capital spending and which tended to pass currency risk to customers. CBN has been aggressive in formulating policies in the management of both the demand and supply of the intractable foreign exchange challenge.

Some of the policies such as the prohibition of 41 items from the Interbank foreign exchange market and the establishment of the Importers’ and Exporters ‘ (I&E) FX Window made reasonable impacts until the situation was exacerbated by the COVID-19 pandemic which crashed oil price  and  distorted the trajectory and momentum of the economy.

Also CBN introduced the dollar for naira policy to stimulate inflows. The policy offers a rebate of N5 for every $1 of remitted funds to Nigeria. This is expected to drive Diaspora remittances. While some analysts are optimistic that it would create impact on inflows, others believe it would not.

Sometimes ago, in a press report, Professor of Economics at Olabisi Onabanjo University, Sheriffideen Tella noted that “it won’t have any major impact on Diaspora remittances.”

According to him, “the first thing is that the amount (N5) is too small to attract those living abroad to start sending money home.” But CBN Governor, Godwin Emefiele, noted that remittances improved from a weekly average of about $5 million to over $30 million per week through the Bank’s foreign exchange initiatives.

The CBN has taken all these decisions to save the economy. This is why some observers wonder at  Vice President Osinbajo’s comment on Emefiele and the CBN. Expectedly, many objective observers are asking questions. Is this fair to  CBN? Is the portrayal of Mr  Emefiele, a true reflection of what has gone on the last six and years?

Notably, in any economy everything revolves around the formulation and execution of a fiscal policy. Was there one? When was it announced? And when did implementation start?  These are observers have raised. They are of the view that there is lack of coordinated fiscal policy. This is what has necessitated  CBN’s interventions, they say.

These observers  point out that in the last few years, the Federal Government has failed to set out clear fiscal policies in the annual budgets. All they is done is to announce how much would be spent and the sector allocations. No single budget address has included the fiscal policies that would underlie the attempt to achieve the objectives stated in the budget – particularly, the GDP growth  target. This explains why Nigeria has missed the growth target for six years in a row.

Normally each budget revolves round targets  which the country sets to achieve each year. Everybody will then be made  aware of the Budget Thrusts or priorities for the year.

Ordinarily this happens as the Minister of Finance addresses top public officials, with the leaders of the Organised Private Sectors, OPS, Banking, Labour, Academia and the International Community being on seat.  Then the minister will lay out the regime of taxes, duties, tariffs, fees, surcharges etc expected to yield the revenue projections.  Expectedly, the address will announce the changes to the list of products imported or exported.

But so far, this has never happened since 2015. And since the CBN has the task of ensuring macroeconomic stability, it has to act to avoid exchange rate problems. Then its interventions, in the Nigerian economy is to grow the MSME, with effectiveness of some policies which aim at stimulating energetic inflows and pushing the frontiers of the economy.

Emefiele knows that a badly mismanaged economy results in exchange rate problems; that sooner or later devaluation of the currency will be the only option left. In the absence of any coherent, comprehensive and comprehensible fiscal policy, he had to act to prevent worse deterioration of our position.

It should be recognized that macroeconomic stabilization is important for the development of enterprises. The economic situation and its level in the future have a fundamental importance for economic activity.

The purpose of a stabilization policy, including a combination of fiscal and monetary policy is to alleviate fluctuations in business cycles, which is supposed to lead to lasting economic balance. However, it should be emphasized that from the point of view of sustainable development, political decisions, economic conjunction, social and ecological crises should also be taken into account.

Overall, the apex bank has done well to initiate notable policies aimed at pushing the frontiers of the economy while ensuring microeconomic stability on the watch of Mr Godwin Emefiele.

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Oil Price rise and the Challenge of Economic Diversification

by with No Comment By Akintunde OgohEconomy

Economic prospects of Nigeria and other African oil producing countries of Angola, South Sudan are looking bright with the consistent rise in oil prices over the past few months.  Brent crude has witnessed steady rise of more than 90 per cent since November last year. If the high prices are to hold up for longer, these countries are sure to witness rapid economic revival from the impact of prolonged oil slump and COVID-19, which had weakened their fiscal positions, accumulated reserves. This is especially true in respect to Nigeria, runs a deficit budget. The same situation go on in Angola, not to talk of South Sudan. In Nigeria there is need to invest in repairing local refineries, so that subsidy payment does not eat up the gains of the present wind fall. Nigeria is unique because of its production of Bonny Light crude oil, which is used to fly aircraft.it should be refined in Nigeria.

The latest Regional Economic Outlook (REO) from the International Monetary Fund (IMF) had noted in April that oil prices and early vaccine roll-outs support the outlook for many   economies. The recent increase in oil prices is sure to boost confidence, supporting non-oil GDP, which was projected to expand by 2.3 per cent in 2021, with an assumption of average Brent prices around $60 a barrel.

With the brent prices crossing $72 in the last week of June, various forecasts suggest that crude prices could cross $100 in 2022. A Bank of America Merrill Lynch (BofA) forecast recently said Brent will now average $68 a barrel in 2021, compared to an earlier estimate of $63 per barrel. BofA sees the Brent price averaging as much as $75 a barrel in 2022, up from a previous forecast of $60 per barrel.

Nigeria and many other oil dependent economies were impacted by long term decline in prices since 2016 that was accentuated by further collapse in demand following the COVID-19      pandemic.

Between mid-2014 and early 2016, the global economy faced one of the largest oil price declines in modern history. The 70 per cent price drop during that period was one of the three biggest declines since World War II.

Booming US shale oil production played a significant role in the collapse of oil prices from mid-2014 to early 2016. Efficiency gains in the sector lowered break-even prices considerably, making US shale oil the de facto marginal cost producer on the international oil market.

Although supply side interventions by the Organisation of Petroleum Exporting Countries (OPEC) led by Saudi Arabia have been able to limit the oil slump with limited success, the longer-term sustainability is largely a function of global demand.

Look beyond cycles

While the global oil majors and most analysts do not see oil heading to a new super cycle, they acknowledge that prices still have room to rise from current levels because of a strong demand rebound and expected tightness in supply. Trends and cycles in oil demand and prices will remain a major driver of the Nigerian economy for a long time, just as for the Gulf region. There is now urgent need to double up on the path of economic diversification.

The long-term demand slump and low oil prices had driven home the need to diversify government income streams triggering deep fiscal and structural reforms in many sub Saharan African economies in recent times. At the local level min Nigeria here, government should take urgent steps as follows.

First, the country should make its bottomless well of resources to back its currency- the Naira at a rate of N50 to the American dollar while it should do its refining locally. Despite all the talks about oil going out of fashion, Bonny light stands its ground for many years to come. This is a great weapon in the hand of the Nigerian government to negotiate its loans.  Without Bonny light no aircraft can fly. So Nigeria flies the world and our economists know this! Why not help government with advice?

Two, FG should pour stimulus packages on small businesses and artisans.

Three, the country should stop giving its crude resources away to the West and China in crude form, more or less giving them for free with the present value of the Naira. These people have nothing for Africa. No plan to make Africa rise and China is the worst of them all!  So effort should be made to ban timber export forthwith, whoever needs our timber should come establish factory to process it here.

Four, Nigeria government should scale up agriculture and its value-chain, and export processed products. Three, Nigeria government should activate entrepreneurship and infrastructure. Five, the government should involve in massive human capital development to realize President Mohammadu Buhari vision of lifting 100 million people out of poverty.

The revival in the global oil demand and prices is an opportunity for Nigeria, and African oil countries governments, to accelerate their efforts towards further diversification rather than slipping back to the boom bust cycles dictated by oil market volatility.

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Why Insurance Cover is a Necessity for All

by with No Comment BankingEconomyPolicy

Many Nigerians don’t fully understand the benefits of insurance, and as such they feel they don’t need any form of insurance cover. But this should not be so. We all need insurance.  You need one form of insurance cover, I need it too. Yes, we all need an insurance cover since there are so many uncertainties in life. But then you need to know and understand what it is that you are covered for. So there is need for you to understand the needs and benefits of insurance so as to make an informed decision before you purchase a cover.

Insurance operates on the basis that losses and misfortunes can occur anytime. It is informed by the wisdom that it is better to plan for a rainy day, so as to reduce or manage the impact of a loss, should it occur. There are also various religious teachings that underscore the importance of insurance as a financial planning mitigation tool. In the traditional African societal set up, insurance was also practiced. In Nigerian society, it used to exist in one form or the other and continues to be practiced in some areas till date. Among the Yoruba, there is what is called Esusu-by pooling resources to help those in need. This practice, however, is not sustainable in the current life these days. As a result of this fact, there is the need for individuals to purchase insurance covers.

Why Insurance?

You need insurance because losses and misfortunes occur from time to time. In most cases when incidents such as fires, sicknesses, motor accidents and death occur, you are not prepared for the financial consequences that follow. We see cases where people resort to borrowing money from friends and relatives who unfortunately, in most cases, are often short of money. What do you expect from someone who has no money to assist you?  They don’t have, and therefore do not help much.

In extreme cases, we see cases of families disposing off assets at very low, throw-away prices because of the emergency situation. It is even sad when such assets are sold to pay for medical bills and the patient whose bills need to be paid dies before the asset is even paid for. No doubt this is double tragedy. And while insurance will not stop such deaths or losses from occurring,  (such as life or medical cover), it definitely helps cushion those who have suffered losses by availing funds to cover for the insured losses

Right Policy

Life has a lot of uncertainties. By buying insurance, you transfer possible financial losses from yourself to an insurance company. While you cannot avoid the misfortunes of life, you can be sure that with the right insurance policy, you will recover from your financial loss. So as to fully appreciate the importance of insurance and purchase the right insurance cover for yourself, you may need to:Identify your risks and needs and then do the followings:

  1. prioritize them. Remember that not all risks are insurable and your insurance needs are specific to you. You should not buy an insurance product simply because your friend bought a similar product and it sounds good.
  2. Insurance is not a straight fitting jacket! Discuss your risks and needs with an insurance company or a broker or an agent near you. Always compare policy benefits against premiums of several insurance companies before you settle on one. A colleague once mentioned that insurance intermediaries (brokers and agents) are like doctors who diagnose and prescribe medication for their patients in that they should help you identify that area in which you are hugely exposed and advice the right insurance product for you!
  3. Match the available insurance products to your needs and choose the one that best meets your needs at affordable cost. When you match your needs with the policy, it is highly unlikely that you will cancel the policy before it matures. This is because you will have understood it and known exactly that which you are getting into. Once again remember to purchase only that cover that you need, based on your risk assessment and prioritization. Where possible avoid instances of buying more or less than you need.

Peace of Mind

Perhaps the most significant benefits of insurance include protection of family and assets and the resultant peace of mind that one has when they have an insurance policy. There are also other benefits like savings, financial security, investment vehicles and tax relief. Lastly, remember that your health is your wealth- sicknesses strike without notice. So take charge of your health and consider buying a medical insurance cover. The NHIS Scheme of the Federal Government is there for you and your family to use.  Paying N5,000 a year to NHIS for health coverage for one year is nothing, compare to the cost of healthcare. When anyone in the family gets sick, such a scheme will shield you from out-of-the-pocket medical spending.  Then what about children education? The future belongs to the educated-with education becoming increasingly expensive; consider buying a policy for your children’s education. Accidents occur anytime, anywhere-consider purchasing a personal accident cover against disabilities and deaths resulting from accidents (even those from accidental stair case falls.

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Ahmed Idris and the Task of Maintaining Delicate Balance in the Disbursement of the Federation Accounts

by with No Comment EconomyMonthly PostPolicy

The sleek figure of Ahmed Idris, the Accountant-General of the Federation, works his way around the crowded, oak-panelled office, in Abuja whenever the federal accounts allocation committee assemble to take decision on the sharing of the federation accounts. He sits down and reasons with MDAs and states to reconcile all payments in transit that has not hit the account yet, and take the net balance. That is fairness.

For Idris, meetings help him reach out and forge a network of support and build transparency. For the other stakeholders, it’s a chance to meet someone many expect to one day move up to higher responsibilties.

Idris has the strengths that so many people in government offices so conspicuously lack, not only critical thinking and complex competence but a grasp of detail. And his speech is a reflection of the depth of commitment, professionalism, faith in human and civilized principles and values. These attributes help him navigate the challenges of managing the federation accounts equitably. He is also concerned with e-governace and Government Integrated Financial Management Information System (GIFMIS) operations.

while many public officials have floundered during the coronavirus pandemic, Idris has been a beacon of calm and competence, intervening swiftly on how to spend billions of Naira supporting the different tiers of government so concerned with how to create jobs as the economy went into lockdown free fall. With restrictions lifted and life gradually coming into force in different parts of the country, Idris been part of those putting people minds at rest.

He is a man who believes in transparency And he communicates about it quite effectively in order to promote transparency. Last year December when President Muhammadu Buhari launched the transparency portal. Idris quickly worked out modalities for its workability

He gave a fluent defence of this measures at a media conference early this year.

“Nobody can be open without being transparent. One cannot be transparent without being accountable. In all these the principles of stewardship is entrenched to a very large extent on all workers in the government offices, agencies, ministries, parastatals and so on. These are the stewards. The public has a duty and responsibility to be informed and enlightened about what is going on, particularly where the management of resources or public funds are being spent. That is what the government is trying to do with most of these reform initiatives.

The objective is to be transparent, open, accountable, and to ensure the public is aware of what is going on with funds and resources being managed or kept on their behalf, reminding everyone that this is the treasury of the nation. What this means is that resources come in and out for one programme or another.”

Sometimes ago early this year, the Office of the Accountant-General of the Federation, OAGF, began a comprehensive review of treasury forms and other accounting source documents in use in all ministries, departments and agencies, MDAs, of the Federal Government.

A statement by Henshaw Ogubike, Director, Information, Press and Public Relations, noted that the review was in exercise of the mandate of the Accountant General of the Federation under FR.107 (n) to issue officially-approved forms bearing treasury numbers for use in all Federal Ministries, Departments and Agencies to ensure uniformity.

It added that already, the Accountant-General of the Federation, Idris, has inaugurated an inter-ministerial committee to handle the review of the documents.

Speaking at the inauguration of the committee, Ahmed said the committee was expected to identify all treasury forms and accounting source documents presently in use; come up with new formats in line with the public financial reforms; recommend additions or deletions of the contents; assign relevant number systems to the treasury forms and review the documents in line with GIFMIS (Government Integrated Financial Management Information System) operations.

He stressed that in carrying out the assignment, the committee should be guided by the Federal Governments quest for adoption of e-governance at all levels and the fact that all the public finance reforms initiatives being driven by the Treasury are predicated on full deployment of ICT solutions.

Rationale  for the review of the documents was because the contents of the treasury forms and other accounting source documents in use were no longer relevant and useful to drive the various public finance management reforms of the Federal Government, which are mostly ICT-driven. As a result, a comprehensive review and update of these accounting source documents was thus imperative for an efficient and successful implementation of government’s financial management reforms.

“He reiterated the government’s resolve to ensure a successful review of the documents and charged the committee to give the assignment all amount of seriousness it deserves and deliver on time.”

 

Last December, the Federal Government launched the transparency portal as part of the reforms against corruption. Under this arrangement, ministries, departments, and agencies (MDAs) were directed to submit daily, monthly, quarterly and annual treasury/financial

Addressing the press some months later, Idris explained that his office had have rolled out a portal to actualize the policy. He added that part of the problem is the sensitization of the public and capacity building for the officials that will handle the system. According to him,this is because the transparency portal is completely new and the operators at the MDAs would require to be trained. That is in the pipeline

Speaking further, he disclosed that the OAGF was giving them a maximum of four months to update their skills. Not only that. It would call the MDAs and sit with them on the portal for them to ask questions on what should be done and the way they should be handling the reporting from their respective MDAs, asserting that the fact that the president launched the

“We ae now trying to upload information to the portal. Some information are historical. They will need to be put in the system. Before that is done, the Financial Officers and those who will be managing the system from the MDAs will need to be trained. The public needs to be sensitized on what they should be expecting. All these are being rolled out now.”

Therefore, the fact that the portal has been launched does not mean that we are 100 per cent available to the public immediately. But, the portal is active. There are some useful information there. Every week one checks the portal, there is always an improvement in terms of what is available and what we were given. That is how we will populate the portal.

Talking about whether all these should not have come before the launching of the portal, what I have to say is that you cannot jump the gun.

“In government, you don’t begin to implement a policy unless there is an approval. Even the treasury single account (TSA), when we started, that was why the government had problems. There was some resistance. But, eventually, we are now there. Likewise the Integrated Personnel Payroll Information System (IPPIS). That is why we are having problems. Some are real problems because of resistance. Some because you cannot jump the gun to implement it. A budget cannot be implemented unless the National Assembly passes it and Mr President signs it into law.”

The Accountant-general’s affirmation of its support for transparency around the nation is a clear reflection of the deep strategic awareness of the danger of lack of transparency, which has infested many people in the country.

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AFRICA ECONOMIC DIVERSIFICATION AND HUMAN CAPITAL DEVELOPMENT IN THE FOURTH INDUSTRIAL REVOLUTION ERA

by with No Comment EconomyMonthly Post

The most urgent things for African Leaders to do now are economic diversification away from commodities as well as build vibrant, competitive human resources. Some countries are making effort to do something. Despite these efforts, data from international organizations such as the World Bank indicate that the regional economy is still significantly driven by commodities revenue.

However, this is not necessarily a deterrent to economic growth. For years to come, the economic outlook indicates that commodities and oil will continue to serve as the backbone of the African region’s economy and remain the mainstay of all development across countries in Africa if urgent steps are not taken. This means they must do things on the path of research and development (R & D) innovation and capacity building. They must do thing that focuses on new economic sectors to exploit the unique advantages of each country. Considered a safe haven for economic stability, these new sectors prioritize investing in human capital as the winning formula for the future economy.

Given the close connection that the countries of Africa share with commodities – one that goes beyond the economic diversification plans of these countries – the volatility of commodity prices defines growth, slow-down or decline levels in these countries. This is acknowledged in the World Bank’s Reports for some years now.

In this context, the pertinent question is – how does Africa build strong foundations for economic sustainability away from commodities fluctuations in the medium and long term? Also, how can it enhance the connection between human capital and growth in all the 54 countries?

While governments across the region have introduced reforms to improve the business environment, there has not been enough concern, with infusing the youth with confidence, skill-sets, and facilitating entrepreneurship, to help young entrepreneurs in achieving their objectives and create new investment opportunities in promising sectors.

Policy adviser must encourage Government to embark on these things. Doing so will help push Africa up in order to achieve sustainable economic growth. Of course, his belief is that African governments must continue their fiscal consolidation efforts, diversify economic activities, create jobs in the private sector specifically tailored for women and the youth, and perhaps most importantly, accelerate investment in human capital through stimulating current government strategies to improve health and education outcomes. Authorities must also develop new strategies to empower young generations with skill-sets and knowledge to fast-track the transition to a digital economy and prepare them for the future economy that will be largely based on AI, big data and innovation.

After all, nations that have significantly invested in their people by way of education, human development and youth empowerment have leapfrogged their way to advancement.