Category: Comments

The continuing rise in the cost of living is having an effect globally, but in various ways, and it is certain that costs and bills are continuing to climb sharply, including the number of impoverished on the African continent. Though the costs of food, household products, and other necessities have risen widely in recent years, across different cities in the world, the effect has been most severe in Africa where the standard of living and the quality of life continue to deteriorate. These price increases have been on since the outbreak of the new coronavirus (COVID-19) and the conflict in Ukraine.

In Nigeria, for instance, a quality loaf of bread that was N350 in 2020 is now over N1,000, which is a 300 percent increase in just three years. Similar percentage increases are in the cost of flight tickets, health care, rent, energy cost (fuel), a bag of rice, a crate of eggs, a kilo of chicken or turkey and many other essentials due to inflation, yet income has remained the same or even less. Nothing is cheap, and everything is out of reach for the majority of people. Given the country’s current position, which is similar to that of many other African countries, and the fact that many individuals have not experienced an increase in their income, this has resulted in lower or no savings, increasing irritation, mental health difficulties, and unhappiness with meeting basic needs among many. Regardless of the length of service, experience gained, or available connection, there is always the chance and fear of losing jobs or firms closing down, and the effects may be more severe.

Employers, in fact, are hesitant to implement any wage increases for economic reasons. Inflation continues to have a severe negative impact on man’s mental, emotional, and physical well-being, as well as on marriages and livelihoods. Currently, even with a steady, regular salary, living has become costlier with heightened uncertainty, high inflation, and weak purchasing power, especially for the masses including civil servants, entrepreneurs, and small business owners. As a result, one of the ways to have protection is by diversifying sources of income and having multiple streams at this time. You have multiple bills; why not have multiple streams of income to support the inadequacy?

Therefore, in addition to salary or business income, it is important to source other income avenues to satisfy the rising needs, poor business performance and inflation. Because if financial capacity is weak and daily expenses continue to rise, individuals, businesses, and even households will be threatened with sustainability. There is a need, therefore, to take action because having multiple streams of income has proven to be priceless. According to my personal observations, the majority of people and homes on the continent rely solely on earned income, be it salary or daily income from a business, and they are always hoping that nothing bad happens. It is critical to understand that if salary is the sole source of income, you are on the verge of financial pressure. With the high inflation, unemployment crisis, and unstable economy, having many sources of income may help spread the risk and guarantee that homes and businesses are stable and financially protected. We live in a world where one source of income is insufficient and becoming increasingly unsustainable. If you ask me, having multiple sources of income is no longer a luxury; it is a necessity. To be safe, it is never rational to depend on a single income source, full-time job, or a single market. Remember, change is the only constant thing in life, and this change happens rapidly in this period and is always unpredictable. Living paycheck-to-paycheck can severely affect mental health, and increase anxiety, depression, and stress and many are unaware of the implications on their health.

Consequently, having multiple sources of income is the best way to protect yourself, your business, and your family against drastic financial change at this time. The tools for generating these multiple streams of income are readily accessible on the internet or by engaging a professional. We have greater access than ever before to information, people, ideas, and opportunities with social media, so tap into this. If the average billionaire or millionaire has more than one way to make money, it is important for professionals and business owners to think the same way and have stable passive income streams to stay on top of financial and economic woes.

While active income will require your full attention and effort, like being available from 8 a.m. to 5 p.m. daily, passive income is generated with no or insignificant effort and attention; it can work while you sleep. So, to complement active income, passive income such as investing can generate income through dividends, interest, and return on capital. Depending on the market and your financial circumstances, investing in real estate might provide you with high returns and rental income. But if you cannot construct to generate rent, acquire a piece of land and protect it; no matter how far away it is, it will rise in value. If you have years of experience in your field, you can start giving paid advice and consulting services or giving lectures as a means to earn another stream of income from your regular job or business. Another reliable way is by acquiring assets that can generate consistent and steady cash flow. Looking inward might just help as well, talents, abilities, and passion can be used to create potentials that can give income streams.

Clearly, research has shown that having multiple streams of income as a plan aids retirement and provides the necessary comfort in old age. Hear this: if a solid retirement plan is your goal, savings alone will be insufficient; instead, the objective should include developing numerous streams of income sufficient to replace your principal active income (salary). The main benefit or advantage of having multiple streams of income is that when one stream is challenged or things are very volatile, there is a backup for extra income to attain financial stability. That can give the necessary hedge against uncertainties in a business as well as during illness, and disability of the entrepreneur.

In conclusion, it is reasonable to live below your means to make room for savings and then investment, no matter how little it helps along with side hustle. Relying on a salary or daily business income alone is a danger at this time. In an environment where job loss and unemployment are chronic, the decision to create multiple streams of income and secure financial stability is expedient. However, do not let your side-income streams put the primary and full-time job or business at risk unless you can survive without it. Good luck!

A seemingly innocuous memo from the Central Bank of Nigeria (CBN) to all banks regarding their audited financial results in the first-half, 2023, has turned controversial. The memo has in fact become a cause for serious concern to the generality of bank shareholders, investors and, indeed, the general public. The memo focuses on the unprecedented quantum leap in the incomes and profits of most banks vis-à-vis the past years’ levels of their performance. Specifically, the memo signed by the CBN’s director, banking supervision department, Haruna B. Mustafa, puts what amounts to a caveat on the incomes and profits of the banks.

According to the memo dated September 11, 2023: “banks shall not utilise their forex revaluation gains to pay dividend or meet operating expenses.” This, the memo says, is because “the CBN has reviewed the impact of the recent foreign exchange (FX) rate regime change on the banking system and observed its potential to significantly increase Naira values of banks’ foreign currency (FCY) assets and liabilities, resulting in varying levels of FX revaluation gains or losses across the industry.” And truly, most banks, following the impact of the Naira floatation or exchange rates unification in June, recorded three-to-four hundred percent jump in practically all their performance indicators, compared to figures of first-half of last year.

As it were, in compliance with the apex bank’s directive, many of the banks with an established culture of paying half-year interim dividend to their shareholders, have opted to declare none (a few did, however). But in their normal cash flow (or income) expectations, bank shareholders (up until the CBN memo) have been counting on their usual interim dividend pay-out from the banks. So, to these millions of (individual) shareholders, the import of the CBN memo is a shocker — an unprecedented vicarious punishment for the fallouts of an impetuous FX policy. Half-yearly interim dividend payment by most banks has remained part of their competitive edge over the years; and their shareholders always eagerly look forward to such inflow. Even if the banks at year-end 2023 declare dividends that capture the already reported first-half of this year, the shareholders would have lost much, considering the time value of money in a hyper-inflationary environment that Nigeria is. The worth of 100 Naira in January this year is no longer the same today: devaluation and inflation is ravaging everything!

Unwittingly, too, the CBN caveat is de-marketing the banks as far as potential investors are concerned. No discerning investor would be moved to acquire interest in business entities whose financial results are snidely taken as bubbles or mere windfall. Indeed, as we have not seen the last of what becomes of the Naira owing to its full floatation, who knows what ‘fiat’ the CBN or the powers that be could come up with, by year-end. The CBN’s memo has gone viral; and is available to the entire world. The memo therefore serves as an alarm and alert to the global village as to the volatility that rules Nigeria’s banking system — and, by extension, the entire economy.

If the body called Bankers’ Committee (comprising all bank chief executives, top officials of the CBN and headed by the apex bank’s boss) were relevant and effective, wouldn’t whatever are the likely implications of the FX policy be discussed by this August body? And consequently, these bank chiefs would then discretely manage the identified headwinds. Now, by a stroke of the pen, literally, the CBN has put a huge question mark on the performances of the banks. As it is, international financial analysts and rating agencies will certainly factor-in the reservations and opinions of the CBN in assessing and ranking Nigerian banks, going forward. The CBN memo also serves as a strong warning to stockbrokers to beware of over-pricing of the assets (stocks) of the ‘performing’ banks.

On the other hand, most banks ‘favoured’ by the FX regime change (as the CBN calls it) have practically rolled out drums for the celebration of their astounding performances. In a highly competitive industry which banking is, the ‘favoured’ ones are already riding on their latest figures to outdo the competition, and further expand even their market shares. The chief executive of one of them in his euphoria said: “the Group recorded strong double-digit growth in revenues and profits from its operations; the results also reflect the effect of sizeable revaluation gains, arising from the harmonisation of currency exchange rates in Nigeria.” He continued: “Our reporting currency found a new exchange level at about N756 to US$1 as of 30 June 2023, compared to N465 at the beginning of the year. The results again demonstrate the benefits of our long-held diversification strategy across Africa and globally.”

As these banks celebrate the ‘windfall’, who knows what awaits them in the rest of the year, and beyond, given the policy somersaulting proclivity and indiscretion of the Tinubu administration, so far? Unfortunately, the ‘sterling’ financial performances of the banks, courtesy of the ruinous new FX regime, is also a direct indictment on them for making “paper profits” just merely from exchange rates manipulations. This shows clearly how largely ‘de-linked’ the banks are from the real sector of the economy: as most operators in the real sectors are practically being asphyxiated, the banks are reporting triple-figure increases in all performance indicators. This irony exposes the outlandishness of the Nigerian economy, and why the banks usually fail on their part in the transmission mechanism.

Unfortunately, due to motley structural and environmental challenges of the Nigerian economy, as the banks focus more on managing their risk assets, their ‘little’ credit exposure still makes them vulnerable to some headwinds. For instance, as the FX revaluation gains are rising, banks’ non-performing loans (NPLs) have begun to grow. This is in part due to the scorching effects of recent monetary and fiscal policies of the current administration that have sent the Naira on a tailspin and pushed inflation to runaway levels. Petrol or diesel, raw materials, machineries and many critical inputs are no longer affordable to most manufacturing concerns, especially the small and medium-scale enterprises (SMEs). Not a few have closed shop; yet, others are faced with bankruptcy prospects — with the exchange rate at near N1000/$ and inflation rate at almost 26 percent!

These beleaguered business entities hit by economic policy fallouts, are customers and debtors to the banks. As they are hard hit unexpectedly by the rash economic policies, their tendency to default in loan servicing increases — all reflecting, with time, as NPLs in the books of the banks. This reality of the Nigerian business ecosystem compels the banks to pander to the credit needs of blue chips, multinationals and ‘big names’ in the oil and gas, telecoms and a few other sub-sectors. This leaves the start-ups, SMEs and MSMEs to be scorched by environmental, policy and internal factors — including little or no access to credit.

In the final analysis, as the new FX regime and kindred policies have heightened uncertainty in Nigeria’s business environment, the CBN has alerted the whole world that banks’ performances are a bubble; and unsustainable. Indeed, the apex bank has warned of impending prudential guidelines, and insists that they (banks) should “increase their resilience against potential volatility and/or economic shocks.”

Charles Iyore, a partner at DNA Capital, writes from Darenth Kent, England. He can be reached by email at Dioncta@aol.com and +447932945002 (text only)

 

 

It is with a deep sense of history that the deck of the Government College Old boys in the United Kingdom will hold the first annual general school dinner outside of Nigeria – October 7, 2023, London Canary Wharf. The long history of attachment with England through cricket, Philip and Tacey of City Road London (est. 1826 as school suppliers), as well as, a time honoured tradition of cutting-off the tails, (assumed bearing rustic and outlandish ideas), of new entrants to the ship, with a laddish shout of “brine or no brine!”, will come alive.

Government College Ughelli was founded in 1945, first as Warri College in Warri before moving to its present site in Ughelli in 1947. In the early stages of establishment, the school was run simultaneously with Edo College Benin City and Government College Ibadan by Mr. Villiers Barcham Vaughan Powell (1904-1989). The Western regional government pre-independence, set out deliberately to train men needed for the technical and leadership workforce, that would husband the abundant natural resources and deliver growth, as well as, development for the region.

Mr V B V Powell, by all accounts, was a keen sportsman. He developed the strength and character of his students through sports. Personally training the students on competition techniques. He was firm on getting the students to acquire the right technique, character and disposition to enhance their performance in sporting competitions.

That sports training and sound academic instruction, delivered to the country some of the most outstanding and notable leaders of excellence; and the production line has not waned even with loss of focus as envisioned by the school leaders of yesterday.

Some of the narratives by Peter Enahoro (aka Peter Pan) below, aptly show the deep involvement of the staff in their development.

“To celebrate the first year of our arrival, the Principal, Mr V.B.V. Powell, declared an Open Day that gave Ughelli dignitaries, as well as hoi-polloi, a run of the classrooms. We were as excited as the guests were, like a free day at the zoo. They stared at us and we stared back at them,” wrote Peter Pan.

He continued: “Ughelli was where the essence of GCU as an institution of holistic learning really came to bloom. I was a beneficiary of the character-forming School Prefecture that prepared me to be unafraid when I began a career in journalism and was fortunate to be given a chance for [an] incredibly rapid rise up the ladder of recognition and management, at a young age, still quoted today as [an] unbeaten record.”

All of these were enough to prepare a young 23-year-old, Peter Enahoro, as an information officer sufficiently, to understand the issues of national asset allocation, and discern that a principal officer of state was treating the matter with levity in 1956.

Not tied in idiom, a list of some of those leaders of excellence, which is only representative of a sea of trail blazers, include; Mr. Gray Longe, Mr. S B Agodo, Mr. B A. Clark, Mr Peter Enahoro, Captain Bob Hayes, Mr Sam Amuka-Pemu (aka Sad Sam), Mr Gamaliel Onosode, Professor Akinyanju, General D. A. Ejoor, Professor Itse Sagay, Professor J. P Clark, Senator Fred Brume, Professor Oyewale Tomori, Mr Moses Taiga, etc. and to today’s Mr Olisa Agbakoba, Mr. Nduka Obaigbena, Mr Allen Oyeama, Mr Festus Keyamo, etc.

The task of ensuring that young minds were not wasted was due to the dedicated commitment of men and women who managed to bring the best out of them, like Mrs Ogundipe, Mr. Christopher Kolade, Mr. J. K. Osakwe, Mr T A. Osigbemhe and Mr R E, Eyike, etc.

The dominance of the school in Cricket, Athletics and Soccer is very evident in the relevant period accounts of sports in Nigeria.

A less than exhaustive listing of principal players in the development of the school will run thus:

1. Mr. S.O. Nwankwo was the acting principal (Head teacher) of the school from whom Mr. Powell took over in February, 1947.

2. Mr. E.C. Halim was the first House Master of School House, then known as Beta House.

3. Mr. Cyril Carter was the first House Master of Forcados House, and took over from VBV Powell as Principal

4. Mr. Andrew Sagay was the first House Master of Sapele House.

5. Mr. I. Etti was House Master of Warri House, which was initially known as Alpha House

6. Mr S F Edgal took over from Cyril Carter as Principal

7. Mr Otuka – Principal

8. Mr S. O Egube – Principal

9. Mr J E Jones – Principal

These schools were not created by the Western Regional government as elite schools, but to be standard bearers of what is attainable, in the training for the next generation.

It is revealing to understand the heritage and development history of Philip and Tacey, which must have informed their choice as suppliers to Government College Ughelli.

The Phillip and Tacey heritage

The Philip & Tacey heritage began in 1826 when John Tacey secured the appointment as Headmaster at the British School in City Road, London. He soon became a well-known figure in the community and his school, a meeting place for teachers from all over the London area.

Each evening a school house was the venue for a gathering and each evening, rarely did the other teachers leave without asking John Tacey to help them obtain some item or another, which they had neglected to provide for themselves, for use in their own school. In those days it was no easy task to secure the necessary materials for equipping a school. Items such as slates, chalks, and sponges were obtained from the oil shop; books from the booksellers; ink and paper from the stationers; even furniture, from builders.

Requests for materials continued to increase and the cupboards were packed with stock, a far larger amount than needed for the school itself; therefore a system of book-keeping became essential. This brought about John Tacey’s decision to open a central shop, rather than simply over-stocking his own school.

The first shop opens

Finally, in 1829 he opened one of the first school supply houses in the world, close by his school in City Road. He continued for many years in his unassuming role and, after his death, was succeeded by a nephew. Changes had already started to occur; the business was rapidly growing into an extensive enterprise and other trading houses were springing up around the country.The City Road business was experiencing serious competition for the first time.

Younger members rejuvenated the business, and in 1902, an association was formed with Messrs. George Philip & Son, a publishing company of Fleet Street, and the new name of Philip & Tacey was adopted.

It is that kind of community of teachers’ understanding, worrying not just about the school’s academic curriculum but also about how best to deliver it as knowledge, that has helped deliver world beating athletes and leaders. That kind of community was quickly cultivated by Mr V B V Powell in the three schools he superintended for the Western Region.

When that system began to break down, these standard bearers began to fail and society began to lose her supply of leaders.

President Bola Tinubu of Nigeria recently admitted to the nation’s leadership deficit at the G20 summit in New Delhi India, but can that be resolved by the elevator rides to courses in Harvard, Oxford and Cambridge? Or should we take the approach of building our leadership training by the deliberate little steps in the schools’ communities? Can we go back to the drawing board like VBV Powell and many other teachers like him to raise winners for the country?

This coming dinner gives us an opportunity to use GCUOBA as the point of contact for all other such standard bearing schools in the country.

Government College OBA, aware of the burden of responsibility and not willing to dwell on past time paradise, began a while back, to shift the problems, which all seem to have come here to stay.

A collegiate general arrangement has produced six president generals to date, determined to recreate the future – Mr Gamaliel Onosode, Mr Adokpaye, Mr Akpieyi, Professor Omatete, Arch. Majoro and now, Chief Albert Akpomudje.

A journey through the history of schools and institutions established and developed to raise champions and build capacity in our country, is a truly compelling narrative.

From Hope Waddell School in Calabar, through CMS Grammar School Lagos, King’s College, Lagos, Queen’s College Lagos, Barewa College Zaria, St Gregory’s College Lagos, Government College Ibadan, Edo College Benin City, Government College Ughelli, Government College Umuahia, Government College Keffi, Government College Kano, Queen Amina College Kaduna, St Maria Goretti Girls College Benin City, Methodist Boys High School Lagos, Igbobi College, Lagos, to Loyola College Ibadan. and many more.

It is only fitting and proper to pay tributes to those who put in their all, to mould the great minds, that have shaped our destiny as a nation, in our continuous search for excellence. Headmasters, Housemasters, Sports masters, and tutors, who came from faraway lands as strangers, and became friends and family.

This is a journey we must make together and be ready to climb new hills and cross new seas.

Let the conversations begin!

Last week finally pushed the Naira/Dollar exchange rate closer to N1000 to the dollar. Most people who spoke to me all seemed understandably scared, they fear we are going to run into a currency crisis.

I have always been a long term advocate of letting the naira find its value in the market and I have not changed my mind.There are all sorts of problems  with allowing  market forces work to find the true value of the naira; but we have to get to a point where the cost of buying dollars will change our economy for good. That is how the laws of economics work. lt will be worse before it gets better.

We are at that critical point now. To be able to harness the gains, we must stay the steady course. My contribution to the FX debate since the new unification policy was put in place, was an article I wrote, a few weeks back, where I stated that the challenge now was to maintain policy consistency. That is what I am still reiterating. The only thing we have to fear is fear as President FDR Roosevelt once said. If the CBN gets into panic mode and does anything other than letting the naira find its value, we will get into a bigger currency crisis, that will do even more harm.

We should not worry about what the naira exchanges for, even at N1,500 to the dollar. We should worry more about what it can purchase locally. For context, the South Korean currency, the “WON”, exchanges for 1,320 to the dollar as I write. Why should you expect the WON to exchange for that much, despite all its industries, productivity and strong GDP and with a population much less than Nigeria, yet we are expecting Nigeria’s non productive economy to exchange its naira for less. It is irrational to expect our currency to out-perform our economy.

Our American Nixon moment.

On August 15, 1971, President Nixon of the United States, severed the link between the US currency, the dollar and gold. In effect, he declared that the dollar will no longer be backed by its gold reserves but by the American economy, which he claimed was stronger than any other economy in the world. It was a gamble, but it worked. More than 50 years later, the dollar is the dominant currency in the world, and has nothing backing it, but the American economy.

Let the Nigerian economy back the naira even though I am not saying we have much of any economy now; we will have to grow it, because the potentials are there. We are currently the largest economy in Africa. China was poorer than us relatively, given their population in 1970. We should work toward an economically driven naira currency value.

It will be painful for five years, because we left it too late. All the defending of the naira the CBN has done with our dollar reserves in the last 10 years, was a pure waste. It is never late to be right. If we pursue this policy diligently, we will forever be off the yo-yo rate fluctuations the naira is currently experiencing.

Let dollar demand destruction complete its course.

The artificial lifestyle of consuming foreign goods when we are not productive and we do not export much, must gradually change. We must allow importation to moderate itself. The higher demand for FX will eventually weaken, when we are unable to afford some of the things we buy with FX now, the demand and supply for FX will align.

We are spending money to educate our children abroad, spending what we can use to improve our own educational institutions locally. We neglect investing in our healthcare because we can buy it abroad. When most of the people can not go to the US or the UK, they do the cheaper option of India. We spend billions of dollars every year to import petroleum products, because we chose to neglect our refineries at home. If we want any development here, we must focus on developing our local industries.

The irony is that those who benefit from the little FX reserves we generate, represent a very tiny percentage of the population.

Any industry that cannot find alternatives, for most of its raw material here, is not ideal for our economy. The only known efficient allocator of resources is price. Let higher prices determine who and which industries get FX.  Anyone or entity paying anything outside of the market price for FX is being subsidised, and we have come to know, that is not good for any economy, especially when we become dependent on it.

As importation gradually goes down, local manufacturing will take up the gap and even the replacement, that may be inferior now, will eventually improve in quality and competition with other local manufacturers, will force them to make better quality goods.

Higher local currency receipts as we exchange dollars for naira, will also make more money available to the states and local governments to share, thereby re-distributing the new naira wealth to areas where development will be nearer the people. We are already seeing this happen in the last few months.

The Nigerian policy making and reforms to get the naira stabilised must start from creating a good enabling economic environment. Inconsistent policy making must stop. Regulators in every aspect of our economy must be made to understand that their role is that of enablement for the area they regulate, not to constantly play police.

This will result in rapid growth for our economy. We will need double digit growth for the next 10 years. This is the only way to reduce the current massive unemployment and create wealth that will lift our people out of poverty.

We already have all the positive factor inputs to enable this: fertile land for agriculture, a large population for a self-sustaining market to support whatever our industries produce, and a large literate labour market, that can easily be skilled up.

We must also address the soft issues of heavy investment into education, healthcare and the present challenge of security. We must fight corruption head on, it has corroded every sphere of life in our country.

Some immediate steps that may help.

The fact that the black market has now gained over N200 premium to the official rate at the I&E window, at the FMDQ, since the alignment with the black market rate in July, tells me the market in that window is not an efficient allocator.

I will advocate that the CBN should impose a N200 premium on any price determined at  the I&E window daily, until it aligns its price with the black market rate, which the people seem to perceive as the real market. This will be a way to quickly find out who the real economic users are for FX.

The CBN should come to an arrangement with all the Deposit Money Banks, to lend it all their current holdings in domiciliary accounts, to be used to settle verified backlogs. Something tells me the media reported backlogs have some fluff that need proper verification. The banks must be incentivized to do this, at rates to be agreed. The CBN will also accommodate this as FX holdings for the banks. The  CBN should allow them, value quarterly balances with the CBN at whatever the current rates are, for reporting purposes. The CBN should also guarantee to the banks, they will be ready to provide it, with liquidity to meet depositors’ requests, at any time so there is confidence for depositors.

And finally, the CBN must find a way to rid the economy of the excess liquidity floating around, which is also the reason for the unquenchable dollar demand.

Saudi Arabia has spent at least $6.3 billion (£4.9 billion) in sports deals since early 2021, more than quadruple the previous money spent over a six-year period, in what detractors have labelled an effort by the Saudi government to distract from its human rights record. Saudi Arabia has deployed billions from its Public Investment Fund (PIF) over the last two-and-a-half years, according to experts’ reports, spending on sports at a scale that has completely transformed the international transfer market for football and changed the professional golf environment. Football clubs in the Saudi league have been on a spending spree to the astonishment of football analysts all over the world. The question is what business sense does it make to spend so much to develop football in a nation not particularly known as a football-loving nation?

About a month ago, Liverpool Football club rejected a $189.6 million offer for Mohammed Salah from Al Ittihad of Saudi Arabia. The club, which is partly owned by the country’s PIF, wanted to buy Salah at the record price. After Liverpool’s 3-0 win over Aston Villa on Sunday, in which Salah scored, Liverpool’s boss Jurgen Klopp said the club would not sell Salah for any price. Saudi professional football is a business to the extent that it involves investment (in players, stadium, customer service, jerseys, advertisement, management etc) and a return (from ticket prices, merchandise, sponsorship and broadcast rights). Professional football officially started in England in 1885 and while technology has changed, the fundamentals of the football business model have not.

Clubs must take risk in investing on ‘buying’ players in the expectation of success in competitions – league and cup – which will in turn attract fans and increase gate-takings. Successful clubs can grow by improving the quality of their squad and by enlarging their stadium. Unsuccessful teams risk financial failure as revenues fail to match promised expenditures. A research carried out in the top two English divisions over a decade to their average wage spending, expressed in proportion to the average wage spending of all clubs, shows that wage spending is highly correlated with league position over time. This accounts for why clubs compete aggressively to hire players. There is now an active transfer market with thousands of transactions a year worldwide (information technology and globalisation have had a huge impact on the football business).

Player characteristics are easily observed before and after they are hired, and so wages can be expected to accurately reflect player’s ‘productivity’ (clubs would not choose to pay more than they could afford, and players would ask for a transfer if paid less than they are worth). And so in football, clubs usually get what they pay for. Not that this relationship is perfect – random factors (miscalculations, amazing grace, misfortune and hasty decisions) make this relationship much less reliable in the short term – players get injured or improve more than expected, and have runs of unexpected bad and good forms respectively. But over time misfortune and amazing grace tend to cancel each other out, and so teams sometimes get what they pay for. There is a market for clubs too. For many reasons, foreign investors do buy clubs outside of their countries of origins, business and second home being major reasons.

Most fans tend to follow a team more based on its success record. In 2003, Jeffrey Borland and Robert MacDonald conducted a survey titled “Demand for Sport” and concluded that teams that are relegated lose large numbers of fans. That is why revenue is so closely related to league position – poor performance on the pitch means fewer tickets sold, less merchandising, less sponsorship and broadcast income. Due to the fact that football business is so competitive – so many teams competing for fans, and with the ever-present threat of relegation, most clubs are only just able to break-even (equal expenditure and income). UK Companies House keeps and provides financial information on English football clubs. Against this background, it is perhaps not surprising that insolvency is a common problem in football management.

Significant underperformance (either in terms of performance based on wages, or of revenues based on performance) is a cogent factor for clubs’ review and some cases for sacking club management and/or coaches. Some players are also discharged to give room for new players. In the last 30 years, there have been at least 70 cases of insolvency involving English clubs in the top four divisions. But this is a pan-European problem. According to the most recent survey of European football club finances by UEFA in 2022, 60 percent of top division clubs in Europe reported an operating loss, 55 percent reported a net loss, 40 percent reported negative net equity and auditors raised ‘going concern’ doubts in 15 percent of cases. This is also not a recent problem: a British government report by Sir Norman Chester in 1968 expressed concern that football clubs might become bankrupt en masse. Government waded in to save imminent unemployment.

In 1983 another report by Chester suggested that without fundamental reforms, English football might collapse. Many people believe that the turning point in English football, following 50 years of post-war decline, came after the Hillsborough disaster and the Taylor Report of 1989, which mandated all-seater stadiums and triggered an investment boom. But, in fact, attendance at English league football started to revive from 1985 onwards. However, despite frequent financial failures, clubs are almost always bailed out by fans and wealthy investors – it is hard to think of one European club of any level that has disappeared in the last 50 years, despite frequent financial crises. Umberto Lago, in “The Financial Crisis in European Football: An Introduction”, published in 2006, suggested that tighter financial regulation to the restructuring of competition, with the aim of easing the financial burden for smaller clubs in particular, must be taken.

The original headline for this piece, which came in the form of a question, (Are market forces failing Nigeria?), was necessitated by the bouquet of economic policies of the President Bola Ahmed Tinubu administration since its inception, as well as the resultant gloomy macroeconomic outlook of the country in the near term. Without a doubt, this new government that took off on May 29, 2023, gave full effect to the reign of the free market: total removal of decades-old petrol subsidy, liberalisation of the foreign exchange market (otherwise called Naira floatation), among others. Incidentally, giving full sway to market forces (demand and supply) in the economic management of the country has been the core prescription of the Bretton Woods institutions (The World Bank and the IMF) over the years. It is therefore not so surprising that the new Tinubu administration in its ‘wisdom’ took the recommendations hook, line and sinker.

By definition, a (free) market economy is one in which the allocation of resources and the prices of goods and services are determined by market forces, primarily supply and demand. This implies little government intervention; allowing private ownership to determine all business decisions concerning how a business is run. Therefore, to a very large extent, this was what the new Tinubu administration commenced via fuel subsidy removal and foreign exchange rates unification or Naira floatation. But it has become apposite to say that these policies rather than making any good impact on Nigerians, have so far taken the populace to the nadir of hope and literally sunk the economy into an abyss. Thus, in a timespan of slightly over three months, all economic indicators have practically gone haywire — apparently, contrary to the government’s expectations.

Prices of all goods and services in the country have quadrupled (at least), with the price of petrol (Premium Motor Spirit, PMS) spiking from N185 per litre (before subsidy removal) to N650 per litre. This price spike quickly fed into transportation, foodstuff, house rents and sundry services. On the aggregate, these translated into a consistent runaway inflationary trend, standing at 24.08 percent at the latest as at end-July 2023 — the highest since September, 2005. Inflation rate was 19.64 percent a year earlier.

The huge jump in inflation translated into a spike in cost of living; sharp drop in standard of living for many Nigerians; weak disposable income and very low purchasing power for the populace. Indeed, as foretold by the World Bank and the IMF, millions of Nigerians have gotten forced into poverty — courtesy of the effects of the removal of subsidy on PMS by the new government. At the same time, the Naira floatation was unwittingly wreaking its own havoc on the economy. At the outset, the new foreign exchange (forex) market introduced a “willing seller, willing buyer” regime — implying that the market forces (demand and supply) would be determining the exchange rate.

However, so soon after the Central Bank of Nigeria (CBN) commenced the unified exchange rate regime, the Naira crashed against the US dollar and other major currencies across the globe. Before the new order, the Naira was exchanging at about N460/US$, but in a matter of few weeks, it had dropped to N850/US$. In the so called parallel or ‘black’ market, the Nigerian currency had declined to over N900/US$ by end-August, 2023. And the crashing goes on!

While these may not be the intention of the Tinubu administration, these outcomes that have been inflicting pains on the citizenry, put a heavy question mark on (the efficacy) of the policies. So, are market forces failing Nigeria? Corporate operators in every sector of the economy are turning in awful half-year 2023 results essentially due to the devastating impact of the economic policies of the new government.

Financial results published by many blue chips quoted on the Nigeria Exchange (NGX) Limited show them making huge losses largely due to the new forex regime. Big names like MTN Nigeria, Nigerian Breweries, Nestle Nigeria, Guinness Nigeria, Unilever Nigeria, Dangote Sugar, among many others, recorded huge “forex losses” during the first six months of the year. Already, two of the blue chips (GlaxoSmithKline and PZ Cussons) have opted to close shop in Nigeria due to the scorching business environment. Many others are virtually on the verge of bankruptcy, for the same reasons.

In the banking sector, while a few made losses, many reported a quantum leap in their performance indices owing to “incomes revaluation” necessitated by the new forex regime. However, in an unprecedented move, the CBN has promptly placed a caveat on the ‘gains’ made by these banks. Apparently, due to fear that the banks’ performances are ‘not real’ or sustainable, the apex bank in a memo dated September 11, 2023, warned that “banks shall not utilise such forex revaluation gains to pay dividend or meet operating expenses.” The CBN said “banks are encouraged to build capital buffers to increase resilience against potential volatility and/or economic shocks.”

All these go to show that the CBN neither has confidence in its Naira floatation policy nor the outcome — which has translated into some ‘windfall’ for many of the deposit money banks (DMBs), so far. Already, many of the DMBs have started having rapidly increasing Non-Performing Loans (NPLs) in their books — indicating that much of their loan portfolio, as the year goes by, is likely to become ‘troubled’. This means that many of the corporate loan beneficiaries could be defaulting in servicing/repaying them, as the economic crunch worsens. And this is the ineluctable reality, given the subsisting policies of the government.

In the aviation sector, most airlines (both local and foreign) are beleaguered; already, the market is faced with shortage of aeroplanes and scheduled flights cancellations. Most of the Nigerian airlines have a large number of their aircraft undergoing some maintenance stranded abroad due to inaccessibility or scarcity of forex to pay the bills. Even for the planes undergoing repairs locally, shortage of forex remains a major impediment to importing essential parts to complete work on them. As for the foreign airlines, close to a billion dollars of their (ticket) revenues could not be repatriated in the past couple of years. Due to shortage of forex, such money has been ‘trapped’ at the CBN. According to the International Air Transport Association (IATA), Nigeria is the worst culprit of all their markets in ‘trapping revenues.’

In sum, although the Tinubu administration could be said to have shown courage and political will in liberalising the forex market and ending fuel subsidy, managing the implementation of those policies is fraught with loop-holes. But, really, could the Naira have been floated, in the first place, given the well-known lingering scarcity of forex in the country? The CBN practically retains the monopoly power on the supply side of the forex market; yet, the Nigerian economy remains a highly import-dependent one. On the PMS issue, should the government have removed the subsidy and still depend fully on the importation of the product?

Even now that the government is licensing more persons to be importing PMS, does it not translate to more pressure in the forex market, since these importers still source dollars? The end result of all these is that the landing cost of PMS is likely to be rising; thus, giving impetus for further increases in the pump price of PMS. So, really, is it the market forces that are failing Nigeria?

Artificial intelligence (AI) is not a new thing in the world – it dates back to 1950 when Alan Turing introduced the new concept in his pursuit to crack the ‘Enigma code’. The term artificial intelligence was coined by Stuart Russell and Peter Norvig in 1995, in their authoritative textbook, “Artificial Intelligence: A Modern Approach” used in more than 1,500 universities in 135 countries. Artificial Intelligence has gained more recognition in today’s technology thanks to advanced algorithms, data volumes, and improvements in computing storage and power, especially cloud computing and data management.

Artificial intelligence is the development of computational programmes that enable a server to perform in a better way. For example, speech recognition and conversion, word translation, visual perception, and decision-making are all things that would need human intelligence, but computers use their capabilities and intelligence to solve these tasks. Artificial Intelligence technologies vary from robotics to speech. We are witnessing AI applications in everyday scenarios such as online customer support interactions, building construction, book-keeping and auditing, financial services, fraud detection, investment forecasting, and retail purchase predictions.  The goals of AI include reasoning, learning, and perception. It has also gone to vehicle driving, marketing, agriculture, manufacturing, surgery, drug prescription etc.

Currently, it is pretty tough to discuss business development without considering artificial intelligence (AI), as it has become a red-hot topic in all the economic sectors globally. Many of us are ignorantly living with AI, multiple unseen algorithms that live on our devices, from smart-phones to self-driving cars and smart homes. Numerous technology giants have adopted artificial intelligence and many other businesses across the world are starting to embrace it. In a Global AI report by McKinsey & Company, 47 percent of companies adopted AI in at least one function in their business in 2019. In another technology survey in 2023, 42 percent of companies want to adopt AI in the future. AI is able to do works that anybody can imagine including sparring partners of table tennis, lawn tennis and boxing sportsmen. It can even act as personal assistants to chief executive officers and as chefs.

The global AI market is booming. It will reach $190.61 billion by 2025, at a compound annual growth rate of 36.62 percent. By 2030, Artificial Intelligence will add $15.7 trillion to the world’s gross domestic product (GDP), boosting it by 14 percent. There will be more AI assistants than people in this world. This is the challenge in the business world as more people will be replaced by AI in the near future. According to Brazilian-American researcher, Ben Goertzel, artificial intelligence or AI could replace almost 80 percent of human jobs in the coming years. 56-year-old cognitive scientist and famed robot-creator Goertzel is founder and chief executive of SingularityNET, a research group he launched to create “Artificial General Intelligence,” AGI, which birthed artificial intelligence with human cognitive abilities.

Goertzel said he does not think AI is a threat to unemployment. He claimed it was a benefit. “People can find better things to do with their life than work for a living”. German rail operator, Deutsche Bahn, and Industrial group, Siemens, launched the first automated and driverless train in the world on October 11, 2021. It is agreed that all paper works in business will be automatable globally. Unemployment issue that will be caused by AI, when AIs are relegating and ‘obsoleting’ one human job after another, is a temporary one. The benefits lie in genuinely assessing humans and robots contributions to business performances. We need to know which is smarter between artificial intelligence and human beings. If we want machines to really be as smart as people and to be as agile in dealing with the unknown, then they need to be able to take big leaps beyond their training and programming. Machines have not arrived yet. Human beings still have to do some jobs.

There are a bunch of benefits of artificial intelligence in business.  As appetisers, it helps enhance the consumer experience, enables rapid innovation, improves revenue growth potential, reduces human error, and creates smart operations. These factors will work well in countless companies and help businesses to stand out head above their competitors. According to a 2023 Gartner survey, the number of organisations that demand AI technology grew 270 percent in the last four years, and it was tripled in 2022. In addition, the 2019 CIO survey results confirmed that companies across all industries were running AI technology in numerous applications. A separate analysis by MarketsandMarkets (a Pune, India-based research firm) predicted that the artificial intelligence market will grow to $90 billion by 2025).

In the western world, most business organisations are contacting tech-specialists on how artificial intelligence will boost their businesses’ growth in both the short and long term. Their investigations mostly show that artificial intelligence can help in: automating routine tasks, freeing up employees to focus on more creative and strategic work, and make better decisions by providing accurate and timely data analysis. Improve the customer experience by personalising interactions and providing more tailored recommendations and support. AI will be able to analyse data on customer usage patterns, feedback, and preferences to provide users with invaluable insights necessary to create more user-friendly, engaging, effective products for invaluable customers. It will also help businesses speed up the product development process start-to-finish with rapid prototyping, especially in mass production.

Artificial Intelligence is not around to wipe out ‘our jobs’; it has come to complement them and make life more comfortable for us. Sophia is a humanoid robot and the first to be granted citizenship of Riyadh, Saudi Arabia, on the 25th October, 2017. The artificial intelligence robot has a life-like expressive face that can mimic human emotional expressions. It can also interpret sentences and context with a cloud connection and synchronise its mouth, face, and body when speaking. Robot Sophia can sell NFT artworks, but cannot perfectly act as company secretary. She can only assist in meetings by providing data and information to directors when required. Robots cannot record minutes as they need judgement as to what to include from meetings verbatim.

Recent occurrences of environmental hazards with devastating blows and tolls on the people of planet earth are alarming, and they desperately require interventions, with immediate actions taken to check the natural disasters threatening the entire global space. It is no longer child’s play to be handled with kid’s gloves any more, considering the devastating blows being dealt on the peoples of the affected communities of the world. This horrible experience is spreading fast like wildfire, and it is felt more among the inhabitants of the coastal communities and regions dwelling along the coastal lines in almost the entire locations of the world. There is no longer any selective exception among the affected victims. They are the ones that suffer the effect of the rising sea level most. It, therefore, calls for global attention beyond what is presently being done. The climate change environmental scourge requires an urgent application of nature-based solutions as nature’s barrier and conservative measures to controlling the impact. Rising sea level and ocean surge are washing off soil (soil erosion) as currently observed in the traumatised Derna community in Libya (with dead bodies littered everywhere; where flash floods have killed over five thousand people).

The ecosystem, no doubt, has been badly disrupted and irreparably devastated, as the causes and effects (the impacts) of man’s actions by the provision of energy needed to run daily living and drive the economy are being looked at and audited carefully on the environment. Ecologically, the damaging impact on geographic areas in all the continents where the natural habitats for man, animals, plants and other living organisms exist, presently need to be aggressively tackled to reverse the trend of further environmental deterioration that has affected the weather conditions and the entire landscape. The earth needs protection, and it is the green actions that ought to be taken. They are the feasible tools for the needed global solutions for environmental sustainability. These actions involve the daily practices and habits exhibited by man that leave little or no impact on the environment after every organically handled and performed activity is proactively carried out, and is certified to have maintained the environment. The green actions could be enumerated as follows: sourcing; production; consumption and utilisation of energy efficiently; reusable and recyclable, low-carbon emitting cleaner-energy products (may necessarily not be fossil based cleaner energy products).

Ultimately, impacting green actions on climate could efficiently be implemented by initiating a natural-based solution with the technique of neem tree planting (especially on African soil, where hi-tech methods of carbon neutrality and carbon balancing for carbon emission reduction may not be financially affordable). African poorer nations need to deploy the meagre resources towards this raging battle for survival of man on the planet. In Libya alone, over one thousand, three hundred (1,300) lives were lost just in one incidence of natural catastrophe that struck on 13th of September 2023. Assessing the damaging impact and the ensuing consequences of the ecological devastations that occur in all the habitable locations; coupled with the tragic costs and very unfortunate losses that involve human lives, agricultural produce, properties and corporate infrastructure in every economy that is affected; wasting further time before this fight against the adverse impacts of natural disaster is suicidal. Nations, peoples of every tribe and tongue need to sweep into action, as a matter of urgency!

Reckless actions taken as part of man’s efforts in economic activities like sand mining will pose a threat in the nearest future, to the neighbouring coastal communities along the coastlines in places that are localised in marine environments. The trending heavy rains and flash flooding cannot spare and will not show any atom of mercy to such affected areas (if natural disaster occurs). The environmentalists and agencies that are responsible for regulatory policies on environmental conservation like the National Environmental Standards and Regulations Enforcement Agency (NESREA) need to be handy and also sweep into action without delay, by implementing some of these rules and enforcement of the green initiatives that support green actions like the ‘neem’ tree planting, as part of the environmental regulations, laws, guidelines, policies and standards. The Nigerian government should not lose sight in implementing this initiative that can help in saving many coastal communities from the incidences of life threatening flooding as being witnessed in Libya currently. Many other economies of the world need not wait any longer in searching for trees that have high absorption capacity for carbon dioxide (CO2) in the process of photosynthesis that releases oxygen (O2) in exchange. These are the simple, cheap and cost effective means; reforestation could be cheaply applied in the global warming mitigation actions. The situation demands quick interventions that might not be capital intensive, as already suggested, to save lives and communities that are prone to imminent climatic devastations.   

The multifaceted and unfathomable challenges posed by acute shortage of foreign exchange (hard currencies) in Nigeria are unfolding day by day. Today, according to a report, no fewer than 40 aircraft belonging to domestic airlines are currently grounded in maintenance facilities abroad and in Nigeria due to lack of access to foreign exchange (forex) from the Central Bank of Nigeria to pay the necessary bills. While over 30 airplanes are stranded overseas, about 10 others are grounded in Nigeria due to lack of forex to purchase some major spare parts from abroad.

Aside from the grounded planes, some operators are unable to acquire new aircraft engines to replace old ones that have completed their life cycles due to acute dollar scarcity. Already, the ugly situation is worsening the lingering flight disruptions being experienced by passengers because of shortage of airplanes in the country. At present, the largest Nigerian carrier, Air Peace, has about 15 planes stranded abroad, Dana Air, Max Air, Azman Air, Arik Air, and other domestic carriers have over 25 airplanes currently grounded abroad and locally due to lack of forex. Operators are seeking forex to pay foreign aircraft maintenance facilities and acquire spare parts from abroad for the aircraft undergoing maintenance locally.

At the recent 2023 Annual Conference of the Nigerian Bar Association (NBA) in Abuja, Chairman of Air Peace, Allen Onyema, said the carrier spent over N78 billion on aircraft maintenance last year, adding that the airline currently has about 15 planes stranded abroad due to lack of forex. He said, “Air Peace has about US$14 million stranded in the Central Bank of Nigeria. It is not hidden. We also have about 15 aircraft stranded abroad. After[wards], people will say Nigerian airlines lack capacity. They do not lack capacity; what they lack is truthful government support and ease of doing business.”

Managing director, Dana Air, Jacky Hathiramani, on his part, said aside from Air Peace, other domestic carriers were battling with the problem of dollar scarcity too, adding that it was high time the federal government intervened to save the domestic airline industry. He said, “All domestic carriers are having challenges with forex. We have about four planes looking for forex from CBN for about two years and it’s about US$4 million. It needs to be known that many airlines have forex issues. The CBN needs to help the aviation industry, so that airlines can maintain their schedules.”

Indeed, practically all airlines operating in Nigeria have a forex problem one way or another. For a couple of years now, Nigeria’s apex bank has been unable to meet the funds repatriation needs of foreign airlines operating in the country. The total amount of foreign airlines’ trapped funds in Nigeria has risen to US$812.2 million, according to the latest figure by the International Air Transport Association (IATA) in June 2023. This situation means that airlines are increasingly unable to repatriate their commercial revenues from Nigeria, thereby making it challenging for them to continue providing the critical connectivity that drives economic activity and job creation globally.

In the words of Willie Walsh, IATA director-general, “Airlines cannot continue to offer services in markets where they are unable to repatriate the revenues arising from their commercial activities in those markets. Governments need to work with industry to resolve this situation so airlines can continue to provide the connectivity that is vital to driving economic activity and job creation.”  Recent estimates by IATA reveal that the top five countries account for a whopping 68 percent of blocked funds, comprising Nigeria (US$812.2 million), Bangladesh (US$214.1 million), Algeria (US$196.3 million), Pakistan (US$188.2 million), and Lebanon (US$141.2 million).

Against this backdrop, IATA has called on governments to ensure compliance with international agreements and treaty obligations that enable airlines to repatriate the funds arising from the sale of tickets, cargo space, and other activities. Failure to do that, according to IATA, might further jeopardize the stability, profitability, and continuity of the aviation industry. “Airlines cannot continue to offer services in markets where they are unable to repatriate the revenues arising from their commercial activities in those markets. Governments need to work with industry to resolve this situation so airlines can continue to provide the connectivity that is vital to driving economic activity and job creation,” said Willie Walsh, IATA’s director general.

Meanwhile, the spokesperson for Airline Operators of Nigeria (AON) and chairman of United Airlines Nigeria, Obiora Okonkwo, is advocating for the CBN to create a special forex window to save the local airline industry. He said “Air tickets could cost as much as Two Hundred and Fifty Thousand Naira at the current exchange rate and cost of aviation fuel (JETA1). It is not to exploit passengers, but rather to ensure financial integrity of airlines which is another way of ensuring air safety.” Further lamenting the challenge facing operators, Okonkwo said, “You have naira and you can’t convert it to dollars. So, the solution to this is for our minister to understand that we need a special window with the CBN to access foreign exchange.” This, as it were, is a call for the return of multiple exchange rates in Nigeria.

As the airlines and other operators in the aviation industry are crying for government’s help to save their businesses  from going under, entities in other sectors of the Nigerian economy are either leaving the country or ‘shrinking’ the scope of their businesses. It is all essentially because of the latest forex management style of the ‘Government of the day’. The massive devaluation of the Naira resulting from floatation of the local currency has put the finances of every business in ‘disarray.’ Even before now, the CBN has been dealing with a lingering shortage of dollars, a challenge that has seen huge sums due to foreign companies ‘trapped’ at the apex bank. Half-year statements of most blue chips and multinationals listed on the Nigeria Exchange (NGX) Limited show that they have incurred ‘huge forex losses’ so far, in 2023.

Apparently, due to this persisting scorching environment, the British pharmaceutical giant (GlaxoSmithKline, GSK) recently closed its Nigerian unit. The contagion has caught up with yet another blue chip — PZ Cussons — which is offering to “buy out” minority shareholders of PZ Cussons Nigeria. This is to make for the de-listing of the company from NGX amid “foreign exchange challenges” in the country. “The group believes the offer to be attractive for the minority shareholders of PZCN, particularly given the recent macroeconomic developments and foreign exchange challenges,” the company said in a statement.

PZ Cussons’ offer to the PZCN board is to acquire minority shareholders’ 26.73 per cent stake for 22.8 million pounds (US$28.7 million). The group said the funding for the transaction is expected to come from “existing naira cash balances.” It is not unlikely that this ‘exit bug’ will also sooner than expected catch up with other businesses in the land. Perhaps, this likelihood has informed the CBN’s hurried tinkering with its so-called Naira floatation: a policy that is fast sinking the Nigerian economy!

The marine and blue economy means the sustainable use of ocean resources and opportunities around oceans for economic growth, improved livelihoods, and jobs creation while preserving marine health and coastal ecosystems. It encompasses various economic sectors, including fisheries, aquaculture, tourism, marine renewable energy, maritime transportation, maritime security and coastal infrastructure development, among others. Marine and blue economy recognizes the importance of oceans and their resources to the global economy and society. According to the Organisation for Economic Co-operation and Development (OECD), the ocean economy contributed $1.5 trillion to the global economy in 2010 and is projected to double by 2030.

However, unsustainable practices and over exploitation of ocean resources can lead to environmental degradation and negatively impact the long-term sustainability of the ocean economy. While countries like Norway, United States of America, Ireland, United Kingdom, Canada, Seychelles, Morocco, Mauritania, etc are maximising the use of the marine and blue economy, most African countries are not. The blue economy seeks to promote economic development while also ensuring the long-term sustainability of ocean resources and the health of marine ecosystems. This is being achieved through sustainable management practices, such as fisheries and aquaculture management plans, marine protected areas, and renewable energy projects.

Additionally, marine and blue economy recognizes the importance of addressing climate change, reducing marine pollution, and enhancing ocean resilience to protect marine ecosystems and ensure their sustainability. Several organisations and initiatives promote the global blue economy, including the World Ocean Council (WOC), the United Nations Sustainable Development Goal Number 14 on “Life Below Water”, and the European Union’s Blue Growth Strategy. These initiatives aim to promote the sustainable use of ocean resources for economic growth while protecting the environment and ensuring social equity. According to the World Bank, the blue economy is the “sustainable use of ocean resources for economic growth, improved livelihoods, and jobs while preserving the health of the ocean ecosystem.” The European Commission defines it as “All economic activities related to oceans, seas and coasts.”

There are many businesses ahead for the Federal Ministry of Marine and Blue economy. It is also hoped that all states which border ocean will domesticate this federal ministry. On the commemoration of World Water Day 2022, UNICEF raised concerns about Nigeria, where an estimated 70 percent of water at the point of consumption is contaminated. The U.N. agency said the contamination is why Nigeria has the world’s highest number of deaths from waterborne diseases among children under five years old. In 2020 and 2021, Nigeria’s National Oil Spill Detection and Response Agency (NOSDRA) recorded 822 combined oil spills, totalling 28,003 barrels of oil spewed into the environment. Those who depend on farming and fishing in the South-South region have felt the direct impact on their livelihoods and residents have reported myriad health and economic issues.

Nigeria’s annual fish demand was 3.6 million metric tonnes, but only 1.2MMT was produced domestically in 2022. The varieties of fishes imported in Nigeria include mackerel (locally called titus, oku eko or alaran), herrings (locally called shawa), horse mackerel (locally called kote), blue whiting (locally called panla), Argentina silus (locally called ojuyobo), and the popular croakers fish. Nigeria imports about 2.4 million metric tonnes of frozen fish annually and this is taking a toll on the country’s foreign exchange reserves. With the establishment of a marine and blue economy ministry in Nigeria, the $60 million being spent annually on the importation of fish into the country will reduce. It is also not healthy to consume imported frozen fish which, in some cases, have spent close to three years in freezers.

Nigeria is blessed with a large resource base of waterways spanning 10,000 kilometres; about 3,800 kilometres is navigable seasonally. Regrettably, our ocean ways are not well developed for transportation of people and goods. The Nigerian Inland Waterways Authority (NIWA) has not fully developed our blue infrastructure in Nigeria as a transport means. Travelling from Lagos to Ogun Waterside, Ondo Waterside, Bayelsa, Rivers, Cross River and Akwa Ibom State will be interesting. It will also be good to see regular ferries going to other African countries like Ghana from CMS and Badagry, to Angola, Gabon and Sao Tome and Principe. If we have barges on water that can harvest large quantities of fishes, our fish importation will reduce.

According to record, the global shipbuilding industry is worth $167 billion in 2022 and it will grow at a compounded annual growth rate (CAGR) of 5.45 percent between 2022 and 2028 to be worth an estimated $229 billion by the end of the forecast period. Ship building, ferry and speedboat construction are good means of creating jobs and earning revenues by countries like China, Japan, South Korea, India, Russia, Germany, Norway etc. As at 2023, HD Hyundai Heavy Industries, the largest shipbuilding industry in the world employed 12,800 workers. The by-workers who are not direct employees of the industry but who set up their businesses near the industry and earn living either as suppliers or distributors of this company can best be imagined.

As of the end of 2022, global marine energy capacity amounted to 524 megawatts. From that, 256 megawatts were reported in South Korea and 211 megawatts were in France. The Netherlands and Russia had a marine energy capacity of two megawatts each. Our wave, tidal and ocean thermal technology need to be exploited to generate renewable energy. If Nigeria can develop her marine energy, electricity production in the country will be boosted. The establishment of the Marine and Blue Economy ministry in Nigeria is a good omen and it is hoped that it will bring the necessary development in the economy of Nigeria.