Thursday, May 26, 2016

On Fayose and Playing to Herdsmen Gallery

I think a lot of us are  just too young to remember how the civil war started. Violence yields nothing, and when violence is mixed with ethnic and political undertones it has to be a smoldering powder that every educated person must condemn unequivocally. When I watched Governor Fayose of Ekiti state make a fool of himself as usual when he visited Ikole, and then some pen pushers glorify his madness either on the altar of delayed federalism and/or ethnic interest I shook my head.

Fayose made statements like "his state", well he is just a governor (an usurper some of us think) and it is not his state. He has no right to stop economic activities by fiat and even his law if passed will be tested in the courts against the constitution and I can already tell you it will be struck down. If ranching is a solution, then the duty of the governor is to support that industry to inflame passion and call for inter ethnic strife and killing. That is just plain irresponsible . 

Ranching is not a bad idea but won't happen overnight, even as we work to harmonize cattle rearer and farmer positions across Nigeria. The only thing that will come out of Fayose's madness is death, hunger due to unemployment and high cost of beef in OUR state.

As an Ekiti man, and specifically an Ikole man (so this gets home and no need to cry more than the mourner)..this is not protection, this is lunacy. Omo ale Ni Fayose, ridiculing Ekiti people and our hard won brand for intellectualism and common sense. No one plays to the gallery with security. 

The reality on ground is that this issue will only lead to more progrom and death, as Ikole borders huge husbandry states of Kwara and Kogi, and have benefitted economically from being a center of trade and commerce in cattle and yams. What is oncoming is clash and massive unemployment & economic depression for the already "left behind" who barely survive already. The consequences of his misadventure will soon be obvious

PS: People talking about death toll of recent clash between criminal herdsmen and farmers are just plain gullible. We have higher death toll from maternal deaths in our hospital and bad roads cause by corruption and even armed robbery than cattle rustling. The issue is just the right one for ethnic jingoist seeking to undermine Nigeria for their own narrow interest and distract the current government from its war against their looting- Fayose inclusive.

Tuesday, May 24, 2016

Dangote is winning again...cement, roads and taxes

So for those wondering what Dangote is really up to with that road deal he got, well here it is

1. Bought over 250 yellow machines (or Caterpillar) for his massive refinery, fertilizer , power and pipeline project in Lekki.
Site Plan of Dangote's Plant

2. Don't need to hire an Engineering, Procurement & Construction Contractor, so he partnered with one to create a new West Africa he found Saipem who was already having issues with the Federal Govt on Oil & Gas local content: win-win

3. To further vertically integrate his cement empire, why not just do a cement road construction demonstration - more expensive but more durable, and try it on a PPP sort of like basis while not necessarily making crazy money. Call it marketing. Fashola agreed like any economist would. Few tax breaks for free but great road? You kidding me? Even you will take it
Site of Dangote Refinery, Lekki FTZ in 2015

4. After this demonstration, expect Saipem-Dangote E&C to bid for road construction concession based on the demo- using Dangote Cement and more or less annuitizing his current income from cement (like fixed deposit) in form of tolls we will be paying on such roads

Some of the hundreds of Yellow Machines
Dangote bought for the Refinery Project
Please don't call this monopoly. It is just smart business strategy. But some Dangote cement stock.  

While most analyst have raised concerns about glut in the local market, Mr. Dangote definitely have his own ideas about where his cement should be used. The excess capacity building up in Nigeria is going into roads. You read it here first

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Saturday, May 21, 2016

Unintended Consequences and Unnecessary Pain

Unintended Consequences

Reading Punch Nigeria today, and one wonders if this subsidy removal policy is not beginning to have unexpected consequences. Punch had a story on consumers taking to public transport and abandoning their fuel guzzlers

Who said public policy cannot be used to shape private behavior? Let the season of waste in the midst of poverty end. Let us build a solid foundation for true economic progress. Our air will even be cleaner and cities more orderly. This fuel subsidy removal policy may have an environmental upside.Citizens now should also demand re-engaging our public transportation needs. They will pay more attention to infrastructure and force politicians to rebuild them. Instead of using fuel-guzzling SUVs fueled by wasteful subsidy to conquer bad roads, it is now cheaper to demand that roads be rebuilt by your politicians so you can use a small car and comfortable public transport.

Unnecessary Pain

The NBS figures didn't have to be this bad. Lots of inaction and bad action. We to entirely blame the previous administration is not exactly truthful. Many things could have been done to keep the nation away from recession given that the signs were clear and the economy was actually quite resilient. The government could have been assembled earlier, budget assembled quickly, quick action on subsidy taken, central bank policy path could have been different to take away the unproductive profiteering and flight of FDI & remittance due to the huge gap in exchange rage or ensure it doesn't even exist in the first place because of knee jerk reaction and monkey business pronouncements and lastly serious public sector reforms undertaken which by itself can be used to inject life to the economy by paying gratuities and pensions for those getting "packages"

To the right are growth rates depicted by quarter, up until end of last year the economy was resilient, so to blame the previous administration is actually not smart. APC came into office without a stimulus plan when a recession as coming. Obama passed his stimulus plan and package of reforms and spent the entire good will from getting newly elected on that. It paid off. Our own president spent it listening to sai Baba rankadede, and getting deceived by evil servants even to the point of thinking refineries were miraculously revived. This was the problem.

Never too late to fix it..start with changing direction on monetary policy as they've done on subsidy regime.


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