In a recent interview with Fortune magazine, Sultan Ahmed Bin Sulayem, Founder and Chairman of Dubai World a holding company with $100 billion in assets was asked his formula for success he replied “build a port, establish a free trade zone around the port and then build luxury hotels and housing nearby”.
It sound so simple but Dubai holdings has pulled it off. It owns the Barneys in New York, owns the “Palms inlands” in Dubai. Dubai worlds is also building a $28billion city in Saudi Arabia, $20 billion worth of luxury projects in Algeria, resorts in Morocco, Housing in Vietnam, Free trade zone in Senegal, and Game parks in South Africa. In October Dubai World agreed to invest $230 million in Rwanda national parks. Yes Rwanda. All this from a simple idea of free trade zones. Please note that Dubai is part of the Federal United Arab Emirates, but unlike Abu Dhabi which has 90% of the oil wealth, Dubai only had sand and pearls. The wealth of Dubai came from positioning themselves as a world class destination to trade, shop and rest. In all this remember that Taiwan has a higher GDP (according to Purchasing Power Parity) than Saudi Arabia, the world’s largest oil producer. Taiwan with absolutely no natural resource yet has prospered on free trade, efficient ports and manufacturing.
Ok so? Two things our Tinapa and the Northern Governors new resolve to develop agriculture and education in response to being called “parasites” by Asari Dokubo. (Yes, Asari Dokubo called the northern governors parasites living off the Niger Delta oil).
Tinapa was a visionary project. The plan was simple and well thought out. Use the natural resources of Cross River,(people, position, environment) add the man made infrastructure (the Calabar port, the Calabar airport, Obudu cattle ranch) and events (mountain race, annual carnival) then add the federal government’s accent (a free trade zone approval) and Tinapa in Calabar would become a little Dubai in Nigeria.
So the first Element the natural resources was achieved, the denizens of Calabar embraced the idea, Calabar spick and span, it was widely acclaimed as the most beautiful state capital in Nigeria, crime was low and everywhere was green. Calabar naturally has access to the sea. 1:0 to Tinapa.
The Calabar government then promoted the second part in utilizing the man made resources hence events like the Mountain race which is the highest paying maintain race in the world were launched to promote Tinapa, a yearly Rio style carnival was launched. Tinapa even sponsored the English premier league. There were direct connecting flights from Lagos and Abuja. Package deals were arranged etc. The project was financed by the private sector through a zero coupon bond with the state government guaranteeing the loans.2:0 to Tinapa.
Then came the most important part, the approval of the Federal government to make the Tinapa area and the Calabar port a free trade zone. To date this has not happened. On this note here Obasanjo the house of parliament and Yaradua scored a late minute hat trick, 2:3 Nigeria wins.
Tinapa has actually sold stalls and some companies have open shop there, however the anticipated drive has not occurred because most shop owners cannot display the goods for fear of seizure by the Nigeria customs, so most retailer ask why move to Calabar with a limited market when I can stay in Onitsha? Fact is if the FTZ issue is not address quickly Tinapa will become another metaphor for a white elephant project. It will be a shame that after the great people of Cross River decided to improve the fortunes of the state from a net receiver of allocation to a contributor to the nations GDP only to be dashed by the ineptitude of the Executive and Legislative bodies. If we cannot approve an “internal” investment running into billions of Naira, (money that could have been stolen and salted away in Swiss bank accounts), how can we ever hope to attract foreign investors?
Our Northern governors have no significant oil wealth, the opportunity is agriculture, but they must learn from the mistake of Calabar.
First they should get the FTZ approval to establish a free trade zone in say Lokoja (as a confluence town will reduce transport cost of commodities) or Kano (a natural trading post for commodities). Then they harness the natural and abundant resources by employing modern, all year round, irrigated farming. The North combined has a formidable land mass which if cultivated with all year round, can feed Africa. Agriculture forms 60% of our GDP, so the Northern governors are clearly on to something. They must also follow through on the value chain to agro allied, food processing and cold storage.
Get high yield seeds, build dams, fund colleges of agricultures, establish faming settlements, declare a farming emergency do everything and cultivate that huge landmass. The Sultan of Sokoto declared yesterday that unemployment in the North was a time bomb, this massive agriculture effort is the defuse. If this is done well, unemployment will drop, forex will flow in a “green” way and our country gets better. Asari has thrown a challenge, if after 8 years nothing has changed then he is right; I hope he will be wrong.
It’s our problem, we can fix it.
Tuesday, August 19, 2008
Friday, August 15, 2008
private public partnership on power
An event and a comment in Germany by our President led me to write this piece in light of the recent discussions we have been having on role of Government in business, Public Private Partnership and the long tem bond market.
The comment was by our President, he said Nigeria cannot fund the Independent Power Projects any longer from the excess crude account. In English he was saying any money to build power plans must be put on a budget passed to the parliament, approved and then money appropriated and spent. The previous regime of Obansanjo had spent about $8 billion on 11 power plant, the money was sourced directly from the excess crude funds and approvals was not gotten from the Parliament. Yar-Adua is right, the process of funding these power plants in the past was wrong, but considers this; a deputy Director of the CBN said that Nigeria needs no less than $50 billion as investment to generate up to 50,000 megawatts ( Nigerias projected energy need) in the next 5-10 years. So in effect the government cannot from her revenues fund these power plants, even if the parliament fast tracked these proposals from the President we don’t have $50 billion to spend on power. So our much vaulted “declaration of emergency on power” has come to a sharp halt, the magical 10,000 mw is a mirage, if Mikano Generators were a stock, I would go buy them. Just yesterday the Austrian builders of the power plants have taken the FGN to court regarding breach of contract in respect to financing.
The event was in Osisioma, God own state Abia, Geometric power company a private independent power company was just establishing the first private sector owned IPP in Nigeria. The $250 million plant will generate about 140 mw of electricity well above the requirement of Aba put at 110mw. It is expected this will boost industrialization in Aba, attract industries, provide 5,000 in jobs and make the state richer. This power project is financed exclusively by the private sector through a consortium of banks led by Diamond Bank. It is owned by a Nigerian.
The above point to the future direction of development in Nigeria, the state coffers cannot finance big projects through annual budgets. In principle, Nigeria, We are simply spending what we make from Oil which as any accountant will tell you is a poor use of wealth. By leveraging on your cash flow a country is able to invest in long tem projects. Remember that fela song in “overtake don overtake overtake”? Fela said there was a man, one man who wan buy fan, in summary the man saved to buy a fan at the end of the month, but the price kept on rising, in the end he could not buy the fan, why because he wanted to do it from his own savings or wealth. Had he been properly advised he might have taken the fan on asset finance, and then paid down the cost of the fan monthly.
Imagine if all the states in Nigeria had their own small IPP financed by the private sector and repayments guaranteed by the FGN, we would have solved our power needs. Instead we pursued a top down federal govt led initiate to build huge gas fired plants all over Nigeria with no thought to how to actually pay the contractors. It is commendable the efforts of the Lagos state governor to assemble such a rich team of experts to talk on how to finance a “new Lagos” through private sector led financing.
We must learn from other resource rich nations like Qatar which is financing projects by leveraging on their huge cash reserves (borrowing), this increase the rate of return of their funds. Or Dubai which creates reserve funds for investment in their country. The point here is not to encourage borrowing but that we should create a financial model where we can leverage on our huge foreign reserves to finance projects that will raise the profile of the ordinary man. The FGN also need to go back to the bond market to fund things like the power project and the housing needs of Nigerian with long term financing
Most importantly our laws and policies must make it easier for our financial institutions like Diamond to continue to fund such projects.
The President has spoken of reintroducing National Development plans back to Nigeria, this should be coordinated with the private sector, the government must plan together with the organized private sector, ask their views and opinions and ensure they limit themselves to policy and regulation, let the private sector continue to do what the do best which is meet demand with great service
The comment was by our President, he said Nigeria cannot fund the Independent Power Projects any longer from the excess crude account. In English he was saying any money to build power plans must be put on a budget passed to the parliament, approved and then money appropriated and spent. The previous regime of Obansanjo had spent about $8 billion on 11 power plant, the money was sourced directly from the excess crude funds and approvals was not gotten from the Parliament. Yar-Adua is right, the process of funding these power plants in the past was wrong, but considers this; a deputy Director of the CBN said that Nigeria needs no less than $50 billion as investment to generate up to 50,000 megawatts ( Nigerias projected energy need) in the next 5-10 years. So in effect the government cannot from her revenues fund these power plants, even if the parliament fast tracked these proposals from the President we don’t have $50 billion to spend on power. So our much vaulted “declaration of emergency on power” has come to a sharp halt, the magical 10,000 mw is a mirage, if Mikano Generators were a stock, I would go buy them. Just yesterday the Austrian builders of the power plants have taken the FGN to court regarding breach of contract in respect to financing.
The event was in Osisioma, God own state Abia, Geometric power company a private independent power company was just establishing the first private sector owned IPP in Nigeria. The $250 million plant will generate about 140 mw of electricity well above the requirement of Aba put at 110mw. It is expected this will boost industrialization in Aba, attract industries, provide 5,000 in jobs and make the state richer. This power project is financed exclusively by the private sector through a consortium of banks led by Diamond Bank. It is owned by a Nigerian.
The above point to the future direction of development in Nigeria, the state coffers cannot finance big projects through annual budgets. In principle, Nigeria, We are simply spending what we make from Oil which as any accountant will tell you is a poor use of wealth. By leveraging on your cash flow a country is able to invest in long tem projects. Remember that fela song in “overtake don overtake overtake”? Fela said there was a man, one man who wan buy fan, in summary the man saved to buy a fan at the end of the month, but the price kept on rising, in the end he could not buy the fan, why because he wanted to do it from his own savings or wealth. Had he been properly advised he might have taken the fan on asset finance, and then paid down the cost of the fan monthly.
Imagine if all the states in Nigeria had their own small IPP financed by the private sector and repayments guaranteed by the FGN, we would have solved our power needs. Instead we pursued a top down federal govt led initiate to build huge gas fired plants all over Nigeria with no thought to how to actually pay the contractors. It is commendable the efforts of the Lagos state governor to assemble such a rich team of experts to talk on how to finance a “new Lagos” through private sector led financing.
We must learn from other resource rich nations like Qatar which is financing projects by leveraging on their huge cash reserves (borrowing), this increase the rate of return of their funds. Or Dubai which creates reserve funds for investment in their country. The point here is not to encourage borrowing but that we should create a financial model where we can leverage on our huge foreign reserves to finance projects that will raise the profile of the ordinary man. The FGN also need to go back to the bond market to fund things like the power project and the housing needs of Nigerian with long term financing
Most importantly our laws and policies must make it easier for our financial institutions like Diamond to continue to fund such projects.
The President has spoken of reintroducing National Development plans back to Nigeria, this should be coordinated with the private sector, the government must plan together with the organized private sector, ask their views and opinions and ensure they limit themselves to policy and regulation, let the private sector continue to do what the do best which is meet demand with great service
of Imo and Ogun States
The Imo State Governor Ikedi Ohakim recently confirmed that Imo state had lost the $500million Guangdong industrial park project to Ogun state. The Chinese complained that in Imo State they were dealing with different agencies all extorting money from them, whilst treats to their lives was commonplace. Just yesterday Imo lawmaker complained to the private airlines of abandoning the Imo state airport once the Port Harcout airport was reopened.
Ogun state is near to Lagos, blessed with natural resources (Bitumen) it has an educated middle class., their governor belongs to PDP. The state wants to build an airport; their indigene has a bank (FCMB). They have two state universities.
Imo State is also near Rivers State, blessed with natural resources (Oil) an educated middle class. Their governor belongs to PDP. The state has an airport. Their indigene has a bank; (Diamond). They also have two state universities.
So how come investors prefer Ogun to Owerri? Simple quality of leadership to develop a plan to leverage on their respective greatest asset which is a nearness to a major economic centre. Without a plan the people perish. Ogun has a five year plan that encapsulated the MDG goals and SEEDS into a developmental budget that is primarily targeted at “living off” Lagos, but empowering their citizens.
I travelled to Abeokuta and I saw why the Chinese moved there, excellent roads, security, a governor with a plan to sell his state as an alternative to Lagos, -invest in Ogun without the madness of Lagos- is the slogan. Ogun is building the new multi billion dollar OK LNG project, they own a part of the new Mega city and are attracting industries by the second.
They have state owned petroleum training institute and 5 ICT centers where their indigenes earn international certification and are trained to work in the industries coming to the state. As the Governor OGB put it “we want to avoid the mistake of the South South who only pushed security guards for employment to the companies that came there”
Imo borders PH and she could have sold herself as the alternative to PH, -invest in Imo without being kidnapped- but alas she blew it. There is no deliberate plan by the government of Imo state to sell its nearness to PH. I happened to be in PH when the airport there was closed, all the passengers in PH had to transit by road to Owerri to catch a flight. Now the Imo airport was moribund, but the indigene taxi drivers got together that afternoon and formed a taxi association and introduced a tariff N6,000 to town, N12,000 to PH (daylight robbery). All the way the slogan was “milk these travelers dry”. This was a unique opportunity to perhaps fix the very bad PH to Owerri road, offer cheap hotel rates for traveler to rest in Owerri, visit the town in guided tours, or even propose the Concord hotel as the alternative hang out spot for the expatriate fleeing PH, but no, no one cared. The state government could not even build a conveyor belt at the airport for the time the PH airport was closed. What a lost opportunity.
Summary
All is not lost, but I pray for good, educated leaders in the mold of Bola Tinubu, Donald Duke and El Rufai “chop, but at least build a road or two”
Ogun state is near to Lagos, blessed with natural resources (Bitumen) it has an educated middle class., their governor belongs to PDP. The state wants to build an airport; their indigene has a bank (FCMB). They have two state universities.
Imo State is also near Rivers State, blessed with natural resources (Oil) an educated middle class. Their governor belongs to PDP. The state has an airport. Their indigene has a bank; (Diamond). They also have two state universities.
So how come investors prefer Ogun to Owerri? Simple quality of leadership to develop a plan to leverage on their respective greatest asset which is a nearness to a major economic centre. Without a plan the people perish. Ogun has a five year plan that encapsulated the MDG goals and SEEDS into a developmental budget that is primarily targeted at “living off” Lagos, but empowering their citizens.
I travelled to Abeokuta and I saw why the Chinese moved there, excellent roads, security, a governor with a plan to sell his state as an alternative to Lagos, -invest in Ogun without the madness of Lagos- is the slogan. Ogun is building the new multi billion dollar OK LNG project, they own a part of the new Mega city and are attracting industries by the second.
They have state owned petroleum training institute and 5 ICT centers where their indigenes earn international certification and are trained to work in the industries coming to the state. As the Governor OGB put it “we want to avoid the mistake of the South South who only pushed security guards for employment to the companies that came there”
Imo borders PH and she could have sold herself as the alternative to PH, -invest in Imo without being kidnapped- but alas she blew it. There is no deliberate plan by the government of Imo state to sell its nearness to PH. I happened to be in PH when the airport there was closed, all the passengers in PH had to transit by road to Owerri to catch a flight. Now the Imo airport was moribund, but the indigene taxi drivers got together that afternoon and formed a taxi association and introduced a tariff N6,000 to town, N12,000 to PH (daylight robbery). All the way the slogan was “milk these travelers dry”. This was a unique opportunity to perhaps fix the very bad PH to Owerri road, offer cheap hotel rates for traveler to rest in Owerri, visit the town in guided tours, or even propose the Concord hotel as the alternative hang out spot for the expatriate fleeing PH, but no, no one cared. The state government could not even build a conveyor belt at the airport for the time the PH airport was closed. What a lost opportunity.
Summary
All is not lost, but I pray for good, educated leaders in the mold of Bola Tinubu, Donald Duke and El Rufai “chop, but at least build a road or two”
valuing a company
Valuing a company
1. market share; they company you are buying must be a leader or the coy should be in the position to bring out a product or service to be a brand or market leader. reading the chairman's comments will give you an indication of new plans, competitive environment, threats to the coy etc
2. the market position must translate to sales so read the annual reports, there is a page that has a five year summary usually at the end, sales must have been increasing all these years,if not find out why
3. this sales should lead to Operational Profit (gross profit), ie the proceeds from sales should be able to pay for the operational expense of the company PHCN, Commissions etc, you can also get this from the annual report of the company, it make no sense if the company is borrowing money to pay salaries for five years!
4. ultimately Operational Profit should lead to Net profit, ie the company should also generate enough profits to pay its costs which are not sales related eg government taxes, auditors renumeration, long term investment projects etc, also from our 5 year summary. the coy must be profitable , unless its a new coy in which case you are look at reduced loss each year
5. this then translates into cash generated. a coy can manipulate earning but cant manipulate cash earned, you can get the cash earned from the cash flow statement which in my view is the most important measure of financial strenght. a coy must produce cash to pay salaries, dividends,fuel cars etc. you are looking for surplus cash generated from operation ie total cash flow less operational cash and investing cash flow.
6. cash generated should then be paid to you as dividends, so you are looking at dividends yields. again you will see dividend paid every year for 5 years in the annual report. it will not make sence to you as an investor if the coy makes billions and does not pay you good dividends. however some coy may say we will not pay a dividend but reinvest that money to grow the coy nothing wrong with that, but then the share price must rise to compensate you for not getting cash.
if you get a positive in all these, then they coy seems good. if the trend (market share-sales- operational profit-net profit-cash- dividends) is broken find out why, thats the analysis part. but also look at, Management Quality, Return on Assets and Return on Equity which are all in the annual report, again you want positive figures.
on a last note, a low Price Earning ratio is good, an High Earnings per share is also good, and all these are available in the annual report.
1. market share; they company you are buying must be a leader or the coy should be in the position to bring out a product or service to be a brand or market leader. reading the chairman's comments will give you an indication of new plans, competitive environment, threats to the coy etc
2. the market position must translate to sales so read the annual reports, there is a page that has a five year summary usually at the end, sales must have been increasing all these years,if not find out why
3. this sales should lead to Operational Profit (gross profit), ie the proceeds from sales should be able to pay for the operational expense of the company PHCN, Commissions etc, you can also get this from the annual report of the company, it make no sense if the company is borrowing money to pay salaries for five years!
4. ultimately Operational Profit should lead to Net profit, ie the company should also generate enough profits to pay its costs which are not sales related eg government taxes, auditors renumeration, long term investment projects etc, also from our 5 year summary. the coy must be profitable , unless its a new coy in which case you are look at reduced loss each year
5. this then translates into cash generated. a coy can manipulate earning but cant manipulate cash earned, you can get the cash earned from the cash flow statement which in my view is the most important measure of financial strenght. a coy must produce cash to pay salaries, dividends,fuel cars etc. you are looking for surplus cash generated from operation ie total cash flow less operational cash and investing cash flow.
6. cash generated should then be paid to you as dividends, so you are looking at dividends yields. again you will see dividend paid every year for 5 years in the annual report. it will not make sence to you as an investor if the coy makes billions and does not pay you good dividends. however some coy may say we will not pay a dividend but reinvest that money to grow the coy nothing wrong with that, but then the share price must rise to compensate you for not getting cash.
if you get a positive in all these, then they coy seems good. if the trend (market share-sales- operational profit-net profit-cash- dividends) is broken find out why, thats the analysis part. but also look at, Management Quality, Return on Assets and Return on Equity which are all in the annual report, again you want positive figures.
on a last note, a low Price Earning ratio is good, an High Earnings per share is also good, and all these are available in the annual report.
nigeria is a democracy
Nigeria is a democracy, practicing a federal, form of government.
Now being a federal govt the duties resources and responsibilities of the state are shared amongst different levels of government federal State and Local. Executive management of the countries resources is devolved to the president he appoints secretaries (not ministers as erroneously referred to in Nigeria) who rightly serve at his pleasure.
The Military corrupted the federal system and changed it into a de facto monarchy, where the president rules, how? Well the military brought in a unified command structure to the federation, all decisions were taken at the top; hence all resources had to be moved to the top and shared back down. So the King, sorry President controls the treasury, he get 100% of the taxes and then shares it as he proposes.
So the issues are not even the revenue sharing formula, nor the federation but the tax and spend powers that the federal level has usurped through the military. The federal controls Defense, currency, external affairs ok, but Health, Education? Come on! Corruption exists in part because allocations are seen as federal (hence nobody’s) money. If we paid taxes to out local councils and states, there is no way we will see the same councilor riding a jeep and not ask him questions.
What will solve the problem? 3 steps
1. Let the present allocation formula for excise duties, mining rights and royalties (all minerals, including Gold, Ore, Timber, Coal) go to the federation account and be shared out to Federal State and Local levels, but increase the derivation amount to 30%. Let me ask a question should Cocoa, Palm Oil and Cotton also fall in here?
2. Then let the consumption tax ie VAT be retained 100% by the states producing them. This is fair and equitable. So Lagos gets 100% of the VAT consumed in Lagos. What happens in Nigeria is that Lagos generates VAT; it is taken to the federation account. Then the FGN allocates a reduced portion of the VAT Lagos collected back to Lagos, who then uses it to build roads or fund hospitals. So let’s just cut out the federal middleman. It is unfair that states that have invested millions to repair roads like Lagos and have attracted investors should be shortchanged and lazy states are rewarded. Remember we cannot make the weak strong by making the strong weak. Only about 2 or 3 states out of 36 generate enough revenue to even pay salaries, let alone build roads. Almost 33 states are lazy, ie cannot survive without “Abuja” money.
3. Practice real fiscal federalism; give the states and local governments real powers for especially Education and Health. In the USA (where we copy our federal system from) the states and local govt fund 90% of the education cost through collection of sales and property taxes respectively. The federal govt can give grants, matching special funds and emergency spends, the federal govt can also set broad policy, invest in health prevention programs but cannot, cannot control education and health in states and local govts.
I want to throw the example of Lagos state to the forum, Lagos as a state enjoyed federal presence, the federal govt built roads, estates, hospital, airports. When the federal left, Lagos was left to care for all those assets, and was generating only N600m monthly in 1999. When Tinubu left he was generating N6 billion, I am not too sure but I think Fashola has generated N60 billion in 6 months. Lagos was sited by the World Bank as the state with only functioning public hospital scheme in Nigeria. Quality roads are being built, Bar Beach was reclaimed; remember all this was done when OBJ withheld the federal allocation to Lagos, necessity is indeed he mother of invention. Today Lagos survives without Abuja money even, though on all criteria they deserve most of the Abuja money (Population, Assets, etc). someone will say “Lagos was already developed” I say the leaders in Lagos have done a good job, do you know you can sit in your office, log unto a website and pay your PAYE taxes in Lagos, and a tax card will be brought to you, federal didn’t do that, Lagos did, they are fixing their problem. Some state can’t even pack rubbish, common rubbish from the streets.
If other states can look inwards, then maybe we can even just save all the oil money for our coming generation’s rater than blow it all in “Dubai”.
Our federation is here to stay; if we consider a confederacy (which means the different constituents will be sovereign or self governing) will the Lagos state go with Oduduwa State? Will Oil producing Abia and Imo states join Biafra? Will Ijaw and Urubro stay in one state? Will Tiv stay with Igala? Will Hausa stay with Fulani? A confederacy will certainly lead to the Balkanization of Nigeria. The federation is a good model, Na us spoil am,
It’s our problem, let’s fix it.
Now being a federal govt the duties resources and responsibilities of the state are shared amongst different levels of government federal State and Local. Executive management of the countries resources is devolved to the president he appoints secretaries (not ministers as erroneously referred to in Nigeria) who rightly serve at his pleasure.
The Military corrupted the federal system and changed it into a de facto monarchy, where the president rules, how? Well the military brought in a unified command structure to the federation, all decisions were taken at the top; hence all resources had to be moved to the top and shared back down. So the King, sorry President controls the treasury, he get 100% of the taxes and then shares it as he proposes.
So the issues are not even the revenue sharing formula, nor the federation but the tax and spend powers that the federal level has usurped through the military. The federal controls Defense, currency, external affairs ok, but Health, Education? Come on! Corruption exists in part because allocations are seen as federal (hence nobody’s) money. If we paid taxes to out local councils and states, there is no way we will see the same councilor riding a jeep and not ask him questions.
What will solve the problem? 3 steps
1. Let the present allocation formula for excise duties, mining rights and royalties (all minerals, including Gold, Ore, Timber, Coal) go to the federation account and be shared out to Federal State and Local levels, but increase the derivation amount to 30%. Let me ask a question should Cocoa, Palm Oil and Cotton also fall in here?
2. Then let the consumption tax ie VAT be retained 100% by the states producing them. This is fair and equitable. So Lagos gets 100% of the VAT consumed in Lagos. What happens in Nigeria is that Lagos generates VAT; it is taken to the federation account. Then the FGN allocates a reduced portion of the VAT Lagos collected back to Lagos, who then uses it to build roads or fund hospitals. So let’s just cut out the federal middleman. It is unfair that states that have invested millions to repair roads like Lagos and have attracted investors should be shortchanged and lazy states are rewarded. Remember we cannot make the weak strong by making the strong weak. Only about 2 or 3 states out of 36 generate enough revenue to even pay salaries, let alone build roads. Almost 33 states are lazy, ie cannot survive without “Abuja” money.
3. Practice real fiscal federalism; give the states and local governments real powers for especially Education and Health. In the USA (where we copy our federal system from) the states and local govt fund 90% of the education cost through collection of sales and property taxes respectively. The federal govt can give grants, matching special funds and emergency spends, the federal govt can also set broad policy, invest in health prevention programs but cannot, cannot control education and health in states and local govts.
I want to throw the example of Lagos state to the forum, Lagos as a state enjoyed federal presence, the federal govt built roads, estates, hospital, airports. When the federal left, Lagos was left to care for all those assets, and was generating only N600m monthly in 1999. When Tinubu left he was generating N6 billion, I am not too sure but I think Fashola has generated N60 billion in 6 months. Lagos was sited by the World Bank as the state with only functioning public hospital scheme in Nigeria. Quality roads are being built, Bar Beach was reclaimed; remember all this was done when OBJ withheld the federal allocation to Lagos, necessity is indeed he mother of invention. Today Lagos survives without Abuja money even, though on all criteria they deserve most of the Abuja money (Population, Assets, etc). someone will say “Lagos was already developed” I say the leaders in Lagos have done a good job, do you know you can sit in your office, log unto a website and pay your PAYE taxes in Lagos, and a tax card will be brought to you, federal didn’t do that, Lagos did, they are fixing their problem. Some state can’t even pack rubbish, common rubbish from the streets.
If other states can look inwards, then maybe we can even just save all the oil money for our coming generation’s rater than blow it all in “Dubai”.
Our federation is here to stay; if we consider a confederacy (which means the different constituents will be sovereign or self governing) will the Lagos state go with Oduduwa State? Will Oil producing Abia and Imo states join Biafra? Will Ijaw and Urubro stay in one state? Will Tiv stay with Igala? Will Hausa stay with Fulani? A confederacy will certainly lead to the Balkanization of Nigeria. The federation is a good model, Na us spoil am,
It’s our problem, let’s fix it.
power failure or failure of power
The Governor of Niger state in Nigeria claimed yesterday that the collapse of the private sector in the North was as a result of an international conspiracy. He claims that the textile and other manufacturing plants were sold to the Asians who close them down, so they could import their own goods from Asia....astonishing .
A question come to mind why is it that a product manufactured in Taiwan, shipped to Lagos, duty paid, transported to Niger State can still be cheaper than a product manufactured in Niger State, a quick answer is POWER.
Diesel in Nigeria is now N160 a liter. How can a local manufacturer who uses 12 hours Generator survive? simple he pushes the power cost to the local consumers so local goods become more expensive, people don’t buy local goods, which causes the local factories to close down and the countries that have cheaper power can then export their now cheaper goods to us. considering we have the same informal labour costs as Asia.
Manufactures Association of Nigeria has estimated that power add 35-55% to the cost of goods locally. Michelin closed last year because of Power, that coy was a key employer of labour in the Niger Delta.
So Oga Governor, it’s not an international conspiracy, it’s a local Power (no pun intended) failure. and while we are at it can we please declare this Emergency on power.
So let’s stop blaming the Asians (we are allowed to blame the Chinese sha), its our problem w can fix it
A question come to mind why is it that a product manufactured in Taiwan, shipped to Lagos, duty paid, transported to Niger State can still be cheaper than a product manufactured in Niger State, a quick answer is POWER.
Diesel in Nigeria is now N160 a liter. How can a local manufacturer who uses 12 hours Generator survive? simple he pushes the power cost to the local consumers so local goods become more expensive, people don’t buy local goods, which causes the local factories to close down and the countries that have cheaper power can then export their now cheaper goods to us. considering we have the same informal labour costs as Asia.
Manufactures Association of Nigeria has estimated that power add 35-55% to the cost of goods locally. Michelin closed last year because of Power, that coy was a key employer of labour in the Niger Delta.
So Oga Governor, it’s not an international conspiracy, it’s a local Power (no pun intended) failure. and while we are at it can we please declare this Emergency on power.
So let’s stop blaming the Asians (we are allowed to blame the Chinese sha), its our problem w can fix it
on Ribadu
On Ribadu
He is young, handsome and fearless. He represented change and hope (our own Obama). I was very proud of the young man, he represented the future. However Ribadu did himself in. He became a Hollywood police man, EFCC arrested, brought you to the court in chains, made the headlines, you got bail and after that nothing……. You were free to wander about and travel for “health check up”. I want anyone out there to tell me a case EFCC tried and got a conviction in court, any one case. The only case I remember was the Brazilian “419” case, which after about 5 years a plea bargain was reached. (Note the EFCC could not get enough to prosecute these guys in court, so they were locked up all these years)
Look at all the governors that stole money, Ribadu went himself to the National assembly and stated in his own words “ only three governors are clean” he continues “in Zamfara state the case is pathetic, the Governor was involved in direct stealing from the state coffers”. But after this what happened? Governors are brought to court, headlines made, any conviction? No. what of Tafa Balogun brought to court in chains, any conviction? No. what of Atiku? EFCC made him a hero, his aides were arrested, homes seized, any convection? No, what of Alams? Any convection? No. what of the Siemens bribery case? any Convictions? No What of N50m bribe for budget allocations in the ministry of Education? Any convictions? No
I could go on and on, but the point is this Ribadu started well but became a tool of the government to fight political enemies, OBJ said publically in a rally that “Mimiko (Labour Party candidate for Ondo Governorship) has refused to step down, so I will ask EFCC to investigate him” openly ooh… so once Ribadu became OBJ hatchet man, his destiny then became tied to OBJ.
On the promotion
If the C in C and President promotes you, it is legal, period. Can’t you as the CEO of your company promote the gate man if he brings you a deal that make your company millions? Will the HR manager come and tell you that No ooh, the gateman has to work for 10 years, the President appoints ministers to serve at his pleasure, or are ministers elected? (they should not be called ministers because they are not elected). So Ribadu’s promotion was right and legal, even if it caused resentment. If we start to use laws for anything then how do we reward exceptional performance? If the lady sleeps with the MD and gets double promotion, then sorry the CEO has the power. A new MD can then demote her for “non performance” that is also legal and at his pleasure. The problem with this particular demotion is that honestly it is targeted at Ribadu, the 138 are just “covering fire”, this is what makes it morally wrong, but legally correct. It is not Ribadu place to accept or reject a promotion or demotion, he can only resign.
On Yar-Adua
He has to be careful. He preaches rule of law but it seeming that is a cover. The Modus Operandi of this administration is to discredit you, the jury is still out on what they do after that. To date all associates, ALL, have been questioned, mentioned in probes or probed. Okonjo Iweala, Fani Kayode, Bolarishade, Soludo, El Rufai, etc etc, it seems that OBJ is being targeted but "they" are afraid to actually confront him, so they go after his boys and girls. Is this wrong? No, but if they committed an offense than probe them and convict them, that’s the point.. Convict them. Oga “Go-Slow” is again playing the Hollywood police role, bring them to court, get the headline let them go for “medical check up abroad”, Turaki, Nnamani, Igbenedion, Kalu (ie Orji Uzor) are all arrested with fanfare but any convictions ? NO, we hear the head of a major govt parietal NNPC saying he paid $12 million to militants (who then use it to buy arms to kill soldiers), was this budgeted? who approved it? Any investigation? ?
We hear $16billion spent on power, any arrests? No, we hear N5 billion airport tower project scam. we see arrests but any convections? NO, we see state elections being reversed, then we see the same governors winning…hmmmm I don’t know but I hear the court ruling on how the Kebbi governor won has not being released.
The boys and girls under Yar-Adua should remember what goes around comes around, Abacha’s Son was arrested, Obasanjo’s Daughter was arrested, ……….him that is wise, let him hear, selah.
In closing, we are not fools, if they want to arrest Obasanjo, do so, make a case and arrest him according to the “rule of law”, if someone commits an offense, try him and convict him, let’s stop these entire headlines grabbing news. The President has to really wake up, the honeymoon is over, power has dropped below 900mw, stock market is down, militants have taken over the Niger Delta (this administration cant even organize a conference, a simple conference,) you cannot hold out any minister as exceptional in this administration, Nigeria is rated as having the 3rd worst health delivery system (we beat Somalia) where are we going? People are hungry in the land and the national assembly is debating length on skirts and indecent dressing.
God Dey, I am still vexing sha.
He is young, handsome and fearless. He represented change and hope (our own Obama). I was very proud of the young man, he represented the future. However Ribadu did himself in. He became a Hollywood police man, EFCC arrested, brought you to the court in chains, made the headlines, you got bail and after that nothing……. You were free to wander about and travel for “health check up”. I want anyone out there to tell me a case EFCC tried and got a conviction in court, any one case. The only case I remember was the Brazilian “419” case, which after about 5 years a plea bargain was reached. (Note the EFCC could not get enough to prosecute these guys in court, so they were locked up all these years)
Look at all the governors that stole money, Ribadu went himself to the National assembly and stated in his own words “ only three governors are clean” he continues “in Zamfara state the case is pathetic, the Governor was involved in direct stealing from the state coffers”. But after this what happened? Governors are brought to court, headlines made, any conviction? No. what of Tafa Balogun brought to court in chains, any conviction? No. what of Atiku? EFCC made him a hero, his aides were arrested, homes seized, any convection? No, what of Alams? Any convection? No. what of the Siemens bribery case? any Convictions? No What of N50m bribe for budget allocations in the ministry of Education? Any convictions? No
I could go on and on, but the point is this Ribadu started well but became a tool of the government to fight political enemies, OBJ said publically in a rally that “Mimiko (Labour Party candidate for Ondo Governorship) has refused to step down, so I will ask EFCC to investigate him” openly ooh… so once Ribadu became OBJ hatchet man, his destiny then became tied to OBJ.
On the promotion
If the C in C and President promotes you, it is legal, period. Can’t you as the CEO of your company promote the gate man if he brings you a deal that make your company millions? Will the HR manager come and tell you that No ooh, the gateman has to work for 10 years, the President appoints ministers to serve at his pleasure, or are ministers elected? (they should not be called ministers because they are not elected). So Ribadu’s promotion was right and legal, even if it caused resentment. If we start to use laws for anything then how do we reward exceptional performance? If the lady sleeps with the MD and gets double promotion, then sorry the CEO has the power. A new MD can then demote her for “non performance” that is also legal and at his pleasure. The problem with this particular demotion is that honestly it is targeted at Ribadu, the 138 are just “covering fire”, this is what makes it morally wrong, but legally correct. It is not Ribadu place to accept or reject a promotion or demotion, he can only resign.
On Yar-Adua
He has to be careful. He preaches rule of law but it seeming that is a cover. The Modus Operandi of this administration is to discredit you, the jury is still out on what they do after that. To date all associates, ALL, have been questioned, mentioned in probes or probed. Okonjo Iweala, Fani Kayode, Bolarishade, Soludo, El Rufai, etc etc, it seems that OBJ is being targeted but "they" are afraid to actually confront him, so they go after his boys and girls. Is this wrong? No, but if they committed an offense than probe them and convict them, that’s the point.. Convict them. Oga “Go-Slow” is again playing the Hollywood police role, bring them to court, get the headline let them go for “medical check up abroad”, Turaki, Nnamani, Igbenedion, Kalu (ie Orji Uzor) are all arrested with fanfare but any convictions ? NO, we hear the head of a major govt parietal NNPC saying he paid $12 million to militants (who then use it to buy arms to kill soldiers), was this budgeted? who approved it? Any investigation? ?
We hear $16billion spent on power, any arrests? No, we hear N5 billion airport tower project scam. we see arrests but any convections? NO, we see state elections being reversed, then we see the same governors winning…hmmmm I don’t know but I hear the court ruling on how the Kebbi governor won has not being released.
The boys and girls under Yar-Adua should remember what goes around comes around, Abacha’s Son was arrested, Obasanjo’s Daughter was arrested, ……….him that is wise, let him hear, selah.
In closing, we are not fools, if they want to arrest Obasanjo, do so, make a case and arrest him according to the “rule of law”, if someone commits an offense, try him and convict him, let’s stop these entire headlines grabbing news. The President has to really wake up, the honeymoon is over, power has dropped below 900mw, stock market is down, militants have taken over the Niger Delta (this administration cant even organize a conference, a simple conference,) you cannot hold out any minister as exceptional in this administration, Nigeria is rated as having the 3rd worst health delivery system (we beat Somalia) where are we going? People are hungry in the land and the national assembly is debating length on skirts and indecent dressing.
God Dey, I am still vexing sha.
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