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Op-Ed

The leader Nigeria needs

Nigeria needs a president who can bring inclusion

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Voters queue to cast their ballot in Maiduguri in the 2019 presidential elections

In 1945, precisely the 7th of December,the Japanese kamikaze pilots had bombed pearl Harbour, when President Roosevelt was told, he summoned his cabinet. Obviously everyone was shattered and hurt and he needed to inspire confidence. Mr Roosevelt rose from his chair; in great pain, (Roosevelt had suffered polio and was paralyzed) and muttered “America must rise”.

Leaders shine through in the darkest times. Winston Churchill was prominent during the second world, hence after the war, the British people did not re-elect him. This shows you that leaders are situation based. I had a conversation with a friend that stated to me that the over-liberalism of Barack Obama was precursor to Donald trump elections because the conservative voice was terribly silenced under Obama.

This begs the question: what leader does Nigeria need? First, what are the country’s issues?

Unemployment 

The unemployment numbers in recent times have been staggering, a rise from 8% to 23% in the space of 5 years would lead to massive protests in some climes. The rate is also very scary due to underemployment. We have seen too many graduates becoming security guards and earning less than minimum wage value in some cases.

The National bureau of statistics puts the number at 18.2million as underemployed. The first visible evidence of this was the immigration jobs test of 2014. These numbers are quite scary and call for a leader that can truly incentivize the economy, a leader with the boldness for capital injection this happened when Harry Truman had to inject the European economy with 13 billion dollars after the Second World War.

GDP and population growth

The current level of GDP growth calls for leadership, when the GDP growth rate doesn’t commensurate with population growth rate, then there is a problem. It affects every part of the economy. According to the Philip curve, an econometric model describing a historical inverse relationship between rates of unemployment and corresponding rates of rises in wages that result within an economy. The stunted GDP growth impacting on unemployment definitely would lead to lower wages, hence the pervasive lower wages in society. The current GDP rate of 2.4% and Population growth rate of 2.6% brings its attendant problems and we must get a leader that can solve this challenge.

Tax to GDP ratio

A tax to GDP ratio of less than 10% in Nigeria is abysmal for development, hence the need for a leader to deepen the tax net. Neighboring Benin Republic does a better number in tax inclusion. The European Union has a threshold of over 45% tax to GDP ratio. Greece started to suffer because they have one of the least percentile of tax to GDP ratio in Europe. We need a leader that can find the solutions to the tax issues and increase the tax net. Taxes are panaceas to national development and no nation can effectively develop without a strong tax base.

Security 

With over 2 million people displaced in the north east and disruption of farming activities in Benue due to the farmer-herder crisis, the security situation calls for leadership. Nigeria needs a leader who can truly solve the security situation.The funds spent on security so far have been dumped in the well of corruption with little or no impact. There is a need for true solutions with intensive intelligence gathering and sincerity of operations.

Education 

The dismal rate of 13.1 million pupils out of school and less than 50 percent primary school complication rate is a ticking time bomb. We need leaders who can build schools and chart a roadmap for education of its citizenry. It is shocking that Nigeria has failed on all its targets towards educating its citizenry. We all remember vision 2010 and other botched visions. It behoves a great deal of pertinence in solving these problems.

Infrastructure 

In 1906, Walter Egerton, the colonial governor of Lagos and the southern protectorate had proposed pipe borne water across Lagos but today, there no pervasive pipe borne water in Lagos. A friend built his house in 1992 in Omole phase 1 estate in Lagos, and at that time, he had pipe borne water but in 2019, there is no pipe-borne water. This is a vivid indication of the dearth of infrastructure. A rail line to Ibadan is still a big deal in 2019, but in 1906 the Lagos-Ibadan rail line was extended to Osogbo. This shows that we need a leader who can truly develop infrastructure in Nigeria.

National integration

National unity is key for Nigeria to succeed. The civil war further heightened this discord amongst Nigerians. Hence the need for a leader who is de-tribalistic with political parties that should stop zoning. The leadership of every nation should be based on competence. America does not have a zoning system. Despite the fact that the United Kingdom is made up of three countries, the Prime Ministerial role isn’t zoned. We need to fully pursue national integration with an intent of true social inclusion and that’s what the next president of Nigeria should do. The current dearth of fiscal discipline in the Nigerian system leaves much to be desired. The current recurrent expenditure rate of over 60 percent is quite scary and the current debt to service ratio of close to 70 percent is indicative of a deeper fiscal insensitivity that needs to be nipped-in the bud.

Africa Continental Free Trade Agreement 

This is the agreement between 49 African Union member states with the goal of creating a single market followed by free movement and a single currency union. It is poised to open up African possibilities and address the dismal inter-African trade status. It should be said, we need a leader who will sign and ratify this act quickly in a bid to position Nigeria properly with its vast potential. After negotiations for 15 years, China finally joining the world trade organization shores up their economy.

We need a leader who understands the mammoth potential of African trade and is ready to do business. Many people may bring in the brexit argument, but the UK is now understanding the importance of trading blocs. Joining the intergovernmental blocs are imperative for national development and the argument against these unions by anti-globalists reminds me of the arguments of the Luddites in industrial England.

In truth, Nigeria needs a president who can bring inclusion, make Nigeria a beehive of positive purposeful economic activities sautéed with peace, justice, social integration and governance.


The views expressed in this piece are the author’s own and do not necessarily reflect News Central’s editorial stance.

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Op-Ed

Gold: Positioned to thrive in low-interest-rate environment

Rising concerns surrounding the health of the global economy is another one of the engines that will help drive Gold prices

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Gold: Positioned to thrive in low-interest-rate environment

The investment case for Gold is set to remain robust as speculation mounts that major central banks will ease monetary policy in an effort to counter a global economic downturn.

The yellow metal shone with extreme intensity during the second quarter of 2019, rallying roughly 9 per cent to levels not seen above $1,435 in over six years, thanks to an environment that included ongoing global growth concerns, geo-politics, trade tensions and Dollar weakness.

Weak macro data, which reflects downward revisions in global growth over the past 12 months, is prompting a handful of central banks including the European Central Bank (ECB), Federal Reserve (Fed) and Reserve Bank of Australia (RBA) to signal a willingness to ease monetary policy and increase economic stimulus to support growth.

In a low-interest-rate environment filled with chronic uncertainty, Gold can climb another 5 per cent over the course of Q3 – claiming the title as one of the high flyers among safe-haven assets, in competition with the Yen. 

Will Gold’s fortunes hang on the Fed’s actions?

Will Gold’s fortunes hang on the Fed’s actions?

What investors need to watch as the second half of the trading year gets underway are the actions of the Federal Reserve. Will the US central bank confirm market expectations and cut interest rates as early as July? If it fails to do so, Gold risks rapidly surrendering its second-quarter surge.

Essentially, if the Fed sits on its hands beyond July, profits will be taken from the table on the $120+ rally that transpired in Gold throughout June. 

Unfavourable global conditions to keep Gold in fashion

Rising concerns surrounding the health of the global economy is another one of the engines that will help drive Gold prices.

Although a sense of optimism has returned after the Trump-Xi Jinping meeting at G20 ended in a trade truce on tariffs, it does not change the reality that global growth is decelerating.

The World Bank recently downgraded it’s 2019 world growth forecast to 2.6 per cent from 2.9 per cent and if the recent disappointing PMI releases across the manufacturing sectors in Europe, China and the United States are anything to go by, global growth is moving towards the lower bound of 2 per cent as the decade draws to a close.

Warning signals over potential cracks in the largest economy in the world, indications of tepid growth in the EU, disappointing data from China’s manufacturing sector and lacklustre growth in the United Kingdom amid Brexit-induced uncertainties are likely to sweeten appetite for safe-haven assets. 

It’s all about central bank stimulus and lower yields 

In the longer term, Gold should also find support from lower treasury yields, especially if the 10-year treasury dips below 2 per cent again as persistent growth fears and trade developments result in lower interest rates across the globe.

While the outlook for the precious metal points to the upside, potential roadblocks on the horizon include easing trade tensions and signs of global growth stabilizing. Both outcomes would pose a challenge to buyers.

What do higher Gold prices mean for African markets?

What do higher Gold prices mean for African markets?

Gold-producing nations on the continent, like South Africa and Ghana will certainly benefit from higher prices.

Economic conditions in Africa’s most industrialised economy remain unfavourable thanks to a tornado of domestic and external risks. Economic growth contracted by 3.2 per cent during the first quarter of 2019 thanks to a sharp decline in manufacturing, agriculture and mining.

Given how Gold remains one of South Africa’s most valuable exports, rising Gold prices have the potential to stimulate growth – especially when factoring in how exports account for roughly 30 per cent of GDP.

Economic growth in Ghana remains robust with GDP expanding 6.7 per cent during the first quarter of 2019. With Ghana claiming the title of Africa’s top Gold producer, higher prices will be supportive of the mining sector which expanded 20.9 per cent in Q1.

When adding to the fact that roughly 5.7 per cent of Ghana’s GDP and 40 per cent of gross foreign earnings are acquired from the mining sector, Gold’s bullish outlook brightens Ghana’s growth prospects.

Gold bulls to dream big and reach for the stars 

Taking a look at the technical picture, Gold remains firmly bullish on the monthly charts as there have been consistent higher highs and higher lows.

Prices have scope to push higher on the monthly charts should $1360 prove to be reliable support.

For as long as bulls are able to defend $1360, there should be enough confidence to challenge $1430 and $1500 – a level not seen since April 2013. Alternatively, a decline back below $1360 will most likely swing open the doors towards $1324 and $1300, respectively.

This bullish setup becomes invalidated if prices find comfort below $1300.

The views expressed in this piece are the author’s own and do not necessarily reflect News Central TV’s editorial stance.

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Op-Ed

Remembering Abdirahman Osman: Reformer and Friend

People close to Mogadishu’s slain mayor said he never complained about the huge burden of getting the city back on its feet.

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Abdirahman Omar Osman, spokesperson of the President of Somalia addresses the Somali media during a visit by the African Union's Peace and Security Council (PSC), on it's first visit to the Somali capital Mogadishu, with the President of Somalia in 2013.

Abdirahman left his family in London to answer the call to rebuild Somalia several years ago. He did so at great personal risk and in spite of the fact that he was leaving a comfortable life and a good job to take on a position in Mogadishu with no salary and immense danger.

He told me that he did so because he believed that there was hope for Somalia, that there was work to be done and that the biggest chunk of that work had to be done by Somalis themselves.

Everyone knew Abdirahman by his nickname, Engineer Yarisow. In Somalia, virtually everyone has a nickname; it’s an affectionate way that Somalis relate to each other. Never mind the nicknames can be as rude as they are hilarious: they are often based on one’s physical shortcomings. If you have a big nose, for instance, your nickname in Somalia will likely be ‘fat nose’ or something along those lines.

Abdirahman was a great man of summary stature, his nickname, therefore, was naturally ‘short man’ – Yarisow. He was an important man whose door was always open to those who came looking for him, particularly those in the media industry. He was kind, committed and deeply respectful to everyone. He was our friend.

We last met while he was still the Minister for Information, Culture and Tourism. We had coffee in his office and we talked about the editorial I penned on his behalf for the EU-AMISOM Special Edition Magazine. We joked about having arosto at a Somali restaurant in Harrow, near where his family lived and where I had some relatives.

He went on to become the Mayor of Mogadishu and the Governor of the Banadiir region. It was in this capacity that he breathed his last, having been targeted by religious extremists. Eng Yarisow always knew that the rebuilding of Somalia would require sacrifice and would come at great cost to many. He knew that the toll for a new Somalia would be high. He has paid it at the highest price: with his life.

Rest well aboowe. Your work and your name is indelibly carved in the hearts of your people, your family, friends, colleagues and all who knew you. May Allah grant you the highest place in Janna. Amin.

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Op-Ed

Will oil prices help or harm Nigeria’s economy in Q3?

Global Oil prices looked tired, exhausted and ready for an early summer break during the second quarter of 2019

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Will oil prices help or harm Nigeria’s economy in Q3?

Global Oil prices looked tired, exhausted and ready for an early summer break during the second quarter of 2019 as global growth fears overshadowed supply disruptions and ongoing OPEC supply cuts. At the time of writing, Oil prices remain shaky and vulnerable despite OPEC+ latest decision to extend production cuts until March 2020.

The crucial question is whether Oil prices will ever recover and trade back towards the $70+ levels. That depends less on geopolitical tensions in the Middle East and more on whether the US and China can reach a trade deal, settling disputes over tariffs and opening the door to continued global growth.

In this case, it’s likely that Oil prices will be injected with a renewed sense of confidence on the back of boosted global growth expectations and demand for Oil. But what if the current circumstances persist and the US-China trade disputes continue throughout the second half of 2019? 

Taking each scenario one-by-one, starting with the upside for Oil prices, Nigeria’s economy could benefit considerably if a US-China trade deal is reached and global growth expectations become brighter. The manufacturing sectors in the US and China are the Oil-gobbling engines which drive demand for international Oil suppliers.

China is the world’s top crude Oil consumer, importing more than 50 per cent of its consumption, part of which comes from Nigeria. In the fourth quarter of 2018, Nigeria exported ₦23.5 billion worth of crude Oil to China and remains a major trading partner to the Asian giant. It’s likely that if China’s economy roars back to life, Nigeria’s growth would see more long-term support, benefiting foreign exchange reserves and the naira.

Although unlikely, if a trade deal were to be announced early in the quarter, it’s possible the nation’s 2019 budget would also see ample support from increased Oil revenues from China. This argument doesn’t apply to the US which has considerably reduced its crude Oil imports from Nigeria as it heads towards energy independence, relying instead on domestic production to meet its own needs.  

If you take the negative outlook on Oil, it’s more likely the rise in Oil prices is a temporary result of supply shortage fears and the prevalent trend in Q3 will be downward pressure from concerns over a global recession. In this unfavorable scenario, the world’s two largest economies do not reach a trade deal in the third quarter and aggregate demand for Oil continues falling as it tracks economic weaknesses in China and the US.

As demand for Oil is whittled away, Nigeria’s foreign exchange reserves may be negatively impacted, along with the Naira, the 2019 budget, and most importantly GDP growth.

In terms of the national budget sheet, expenses like the petrol subsidy may take the limelight as they drag on revenues, overshadowing growth and threatening fiscal stability. 

There’s another factor we haven’t talked about so far but it’s significant in terms of Oil market economics. Oil sales are denominated in US Dollars. Recently, the currency has weakened against its rivals, meaning that Oil is more affordable and possibly giving traders an incentive to snap up contracts at current levels before they rise further.

If the Dollar bears have their way and the currency keeps declining, Oil price benchmarks could see further support in the third quarter. The impact of a weaker USD might not be as strong as a US-China trade deal, but it could feed positively into Nigeria’s Oil revenues and go some way to counter possible losses from ongoing global recession fears. 

To sum up, Nigeria’s foreign exchange reserves, currency, growth, and budget will face headwinds should trade disputes persist.

However, provided the USD keeps weakening, there’s scope for support from higher Oil prices based on bargain hunting. There’s always the possibility that the US and China could decide on a trade deal, if this happens sooner than later, Nigeria’s economy would benefit accordingly. 

The views expressed in this piece are the author’s own and do not necessarily reflect News Central TV’s editorial stance.

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