It’s the Infrastructure, Stupid.

From North to South and from the East to the West, the dearth of the nation’s infrastructures is unimaginable. Poor roads network, dilapidated schools and hospitals, lack of broadband internet access, dilapidated airports, ports and many more. The infrastructure deficit is alarming. Several figures are being peddled around as the amount of infrastructure deficit we are facing. The Lagos Chamber of Commerce and industry put the figures at $300bn, that’s about 25 per cent of the country’s GDP. In 2015, the institute of Appraisers and cost engineers (IA & CE) said the country will require about $2.9trillioin in the next 30years to bridge the deficit and recently the Minister for transportation Rotimi Amaechi put the amount needed to bridge the transport infrastructure gap alone at $166bn.

Whatever the amount is, the fact is that the nation’s growth and development continues to be hindered by lack of infrastructures and this portends great danger to the economy in the long run.

The current economic slowdown in the country present a huge opportunity for the present administration to invest massively in infrastructures to activate economic growth. The paltry N1.8 trillion (30% of the 2016 budget) allocated for capital projects in the current fiscal budget is like a drop in the ocean.  The present administration should do all it takes to get the funds and build the infrastructures.

In the 1930s, British economist John Maynard Keynes advocated increased government expenditures and lower taxes to stimulate demand and pull the global economy out of recession.  Now known as Keynesian economics, it is now being used by many countries to pull their economy out of recession in the short run.

In responding to the great depression in the 1930s, President Franklin D Roosevelt introduced a set of stimulus program referred to as The New Deal. Major part of the new deal includes construction of new government buildings, bridges, hospitals, airports, schools, road and dams, all in an effort to activate the economy and reduce unemployment. About $3.3billion was spent in two years to build 34,599 projects. These programs together employed about 8.5million workers, constructed about 650,000miles of highways and roads, and hundreds of thousands of public buildings, bridges, parks and playgrounds.

Not a few Americans will agree that Roosevelt’s New Deal was literally stamped on the American landscape.

Just over a decade later, at the end of World War II, then secretary of state in the US, George Marshall initiated the European Recovery program now commonly referred to as the Marshall plan. The initiative saw America spending over $12billion to help rebuild parts of Europe after the war and according to available data, the years between 1948 to 1952 saw the fastest growth in European history.

Although some have questioned how much of the fast recovery should be credited to the Marshall plan , many believed the plan helped a great deal with Belgian economic historian Herman Van der Wee concluding that  the Marshall Plan was a “great success”.

These two instances show that in the short run, Keynesian economics can be applied effectively in time of recession. A major infusion of funding is needed to address the infrastructure gaps in Nigeria. Infrastructure investments’ unique ability to create jobs in the short term and boost productivity in the long term is well known to policymakers.

More recently, Canada responded to the 2008 economic crisis by enacting a stimulus plan in early 2009. Of the total C$40billion stimulus package, over sixty percent of it was spent on building new infrastructures like bridges, roads, schools, broadband internet access and housing projects. Although these investments put Canada in a $56bn red ink for the 2009-2010 fiscal year, it heralded one of the largest building projects in Canada’s history.

In responding to the same crisis, its neighbor to the south, United States introduced the recovery act signed into law on February 17, 2009 by President Obama. The act’s primary objective was to save and create jobs. Of the total $831 billion appropriated for the stimulus package, infrastructure development was a major plank of it. Roads and highways construction was the biggest single line infrastructure item in the final bill.

Now the question is, how will the government finance this?  There are several ways through which this can be done, of which one is through debt financing and Public Private Partnership (PPP). While PPP remain a very available route I will advocate for borrowing.

According to 2015 data from IMF, Nigeria’s debt to GDP ratio is 17%, although there are institutions who put it between 11%-15%. With these ratios Nigeria enjoys one of the lowest debt to GDP ratio globally. IMF data currently list Japan as the country with the highest debt to GDP ratio of 237.9% followed by Greece 158.5%, Italy 126.9%, and Singapore is at 111%, USA 106.7%, Canada and UK sits at 87.5% and 84.8% respectively.  With these low ratios nothing should stand in the government’s way in borrowing funds to develop infrastructures. Investing in both social infrastructures such as schools, universities, hospitals prisons, low cost housing, and economic infrastructures such as energy, water, transport, roads, highways, railways, traffic lights, street lights, drainage systems, airports, bridges, and markets will lay the foundation for economic development and growth. Infrastructure lays the foundation for modern economies. When completed these project will help the country grow its wealth while citizens’ standard of living increases.

Investing in infrastructures is a great multiplier, a dollar spent on infrastructure leads to an outcome of greater than two dollars and for a developing country like Nigeria it may even be more. The country will be better positioned to attract foreign investments when we invest infrastructure. Stephen Hayes, the President of the corporate council for Africa submits that “Infrastructure is probably the single most important need for Africa to develop”. He is right. Top performing countries like Singapore, China, South Korea and Taiwan owe their economic successes in part to infrastructure investments. When these countries invest, they do not consider projects in isolation; they consider how each supports their policy objectives, and they weigh it against other projects that might yield better returns.

To develop at a pace that is commensurable with where we find ourselves now investments in infrastructures must be tripled at the very least or our outcome will continue to be poor while our potential will remain untapped. The African development Bank (AfDB) estimates that deficient infrastructure reduces sub- Saharan Africa’s output by about 40%. The AfDB also opined that citizens of nations who invest in infrastructures “are more likely to enjoy better health care, sanitation and other markings of well-being”.

In her book reforming the unreformable: Lessons from Nigeria. Mrs. Ngozi Okonjo- Iweala concludes that “Without improvements in infrastructure, Nigeria’s economy will not be able to produce the job-creating growth that is needed. In particular, small and medium sized enterprises will not be able to grow, as infrastructure costs and bottlenecks make it difficult for them to be competitive.”

The President and his economic team should roll their sleeves and get to work.  Without massive investments in infrastructures we cannot achieve the kind of growth needed to bring us out of this doldrums, increase in infrastructure spending would significantly boost economic activity and employment.

The recent launch of a $25billion Infrastructure fund is a step in the right direction. During the launch, Minister for Budget and National Planning Udoma Udo Udoma stated that his ministry had developed the National Integrated Infrastructure Master Plan. ( NIIMP). According to him, NIIMP, apart from being a robust framework for infrastructure development, will also serve as investors’ guide, enhance economic growth, and create job opportunities among other benefits”.

The fund seeks to raise the stock of infrastructure from the current level of 20 per cent to 25 per cent of the GDP to at least 70 per cent by 2043 requiring about 3.05 trillion dollars to implement.

While this sounds like a very ambitious and achievable plan, present and successive governments will require political will to see it through.

For decades, Nigeria’s poor infrastructure has historically held back its development with successive governments paying lip service to infrastructure development. What has been happening is that instead of focusing on the country’s potentials and the economic benefits of infrastructural investments politician focus on the next elections and invest in what can be done quickly, temporary power, quick investments in ill-equipped health centers, hurriedly and poorly constructed roads so they can show visible progress. But those kinds of actions do not necessarily address the broader challenges.

Allocating and investing 2-3% of our GDP on infrastructures will not cut it for a developing country like ours. For China to get to where they are today they have been spending about 9% of their GDP in almost two decades. We must get it right now. This government should use its anti-corruption posture to the country’s benefit by ensuring that funds allocated are rightly spent.

The advice by Dominic Barton, global country manager director of Mckinsey & company becomes apt at this point in time. In his words “Kicking the can down the road, is not a viable strategy for dealing with the world’s infrastructure needs. It’s up to us to avoid leaving a legacy of deferred costs and deteriorating fundamentals for the next generation. The money is available. Let’s put it to use”

Like President Roosevelt, President Buhari needs to stamp his signature infrastructures on the Nigerian landscape not mildly but massively.

id99176_InfrastructureArticle

@Jideolutuyi

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The Top 7 Leadership Qualities & Attributes of Great Leaders

Many qualities have been identified that are important to great leaders…

But there are seven leadership qualities that seem to stand out as being more important than the others.The good news is that each of these leadership qualities can be learned, and they must be learned by practice and repetition.

Here are the seven most identified attributes of leaders and executives:

Vision

Great leaders have vision… They can see into the future.

They have a clear, exciting idea of where they are going and what they are trying to accomplish and are excellent at strategic planning.

This quality separates them from managers. Having a clear vision turns the individual into a special type of person. This quality of vision changes a “transactional manager” into a “transformational leader.”

While a manager gets the job done, great leaders tap into the emotions of their employees.

Courage

“Courage is rightly considered the foremost of the virtues, for upon it, all others depend.”– Winston Churchill

The quality of courage means that you are willing to take risks in the achievement of your goals with no assurance of success. Because there is no certainty in life or business, every commitment you make and every action you take entails a risk of some kind.

Among the seven leadership qualities, courage is the most identifiable outward trait.

Integrity

In every strategic planning session that I have conducted for large and small corporations, the first value that all the gathered executives agree upon for their company is integrity. They all agree on the importance of complete honesty in everything they do, both internally and externally.

The core of integrity is truthfulness.

Integrity requires that you always tell the truth, to all people, in every situation. Truthfulness is the foundation quality of the trust that is necessary for the success of any business.

Humility

Great leaders are those who are strong and decisive but also humble.

Humility doesn’t mean that you’re weak or unsure of yourself. It means that you have the self-confidence and self-awareness to recognize the value of others without feeling threatened.

It means that you are willing to admit you could be wrong, that you recognize you may not have all the answers. And it means that you give credit where credit is due.

Humility gets results. Larry Bossidy, the former CEO of Honeywell and author of the book Execution, explained why humility makes you a more effective leader:

“The more you can contain your ego, the more realistic you are about your problems. You learn how to listen, and admit that you don’t know all the answers. You exhibit the attitude that you can learn from anyone at any time. Your pride doesn’t get in the way of gathering the information you need to achieve the best results. It doesn’t keep you from sharing the credit that needs to be shared. Humility allows you to acknowledge your mistakes.”

Strategic Planning

Great leaders are outstanding at strategic planning  They have the ability to look ahead, to anticipate with some accuracy where the industry and the markets are going.

Leaders have the ability to anticipate trends, well in advance of their competitors. They continually ask, “Based on what is happening today, where is the market going? Where is it likely to be in three months, six months, one year, and two years?” They do this through thoughtful strategic planning.

Because of increasing competitiveness, only the leaders and organizations that can accurately anticipate future markets can possibly survive. Only leaders with foresight can gain the “first mover advantage.”

Focus

Leaders always focus on the needs of the company and the situation. Leaders focus on results, on what must be achieved by themselves, by others, and by the company. Great leaders focus on strengths, in themselves and in others.

They focus on the strengths of the organization, on the things that the company does best in satisfying demanding customers in a competitive marketplace.

Your ability as a leader to call the shots and make sure that everyone is focused and concentrated on the most valuable use of their time is essential to the excellent performance of the enterprise.

Cooperation

Your ability to get everyone working and pulling together is essential to your success. Leadership is the ability to get people to work for you because they want to.

The 80/20 rule applies here:

Twenty percent of your people contribute 80 percent of your results.

Your ability to select these people and then to work well with them on a daily basis is essential to the smooth functioning of the organization.

Gain the cooperation of others by making a commitment to get along well with each key person every single day. You always have a choice when it comes to a task: You can do it yourself, or you can get someone else to do it for you. Which is it going to be?

Most of the time, leaders think about the good leadership qualities and how to apply them on a daily basis.

The most important contribution you can make to your company is to be a leader, accept responsibility for results, and dare to go forward.

@BrianTracy

 

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The email, data and privacy implications of Microsoft’s acquisition of LinkedIn

We all took a collective gasp when we saw the price tag of Microsoft’s acquisition of LinkedIn. Now that the dust has settled a bit, we can pause and reflect on what this means from a data, privacy and email perspective — given that all three are potential strengths, weaknesses and concerns arising from the merger of two giants.

While at a conference recently, I sat down with my colleague and friend, Dennis Dayman, chief privacy officer at Return Path, and discussed how this deal could change the B2B data landscape. Here’s what he had to say.

Len Shneyder: What did you make of this deal when you saw the announcement?

Dennis Dayman: At first I wasn’t sure what their plans were outside of an existing partnership. The more I thought about it, the more I began to realize Microsoft, like Google and other enterprises, really lacks a real social media presence or product. On the other hand, LinkedIn is a company that doesn’t make operating systems or business software, yet they’re at the forefront of enabling the people who do. So then what are the competitive advantages for these two behemoths joining forces? Why would Microsoft want LinkedIn, and how would they use it as a competitive advantage against Apple?

LS: Is that a rhetorical question? At $26 billion, the acquisition is much more than a checkbox. Apple doesn’t have a social platform per se, but some may perceive them as a social enabler: The App marketplace is a kind of social landscape, music is a socially engaging medium, as are movies — these are culturally significant and drive social engagements. But I think I see what you’re saying.

DD: Right now, Google has lots of data on users of their Google Apps product line for B2B clients and Google doesn’t sell or share that out to anyone; on the flip side, we know that Microsoft has lots of data on users in their Office 365 product line… it’s an interesting parallel when you think about it.

LS: Very true, I hadn’t thought of it that way. So what’s in it for Microsoft? Does this help them go toe-to-toe with the social giants or the operating system platforms?

DD: I think it’s more about Microsoft wanting to know you, the B2B user, and how you engage with business productivity tools. Additionally, the connections you make and maintain in the world serve as a kind of social launching pad for the products and platforms you use on a daily basis. From the content side, who you are talking to, and what you are talking about are equally important. Having all that information positions Microsoft better in today’s competitive B2B computer market, B2B collaboration, B2B operating systems market and the hottest market of them all: cloud computing.

LS: So at the end of the day, data is king, it’s always what’s most important and LinkedIn represents a kind of B2B social intelligence that Microsoft only had in the form of usage data through Outlook 365. They knew how people worked with their products, but they didn’t know what they were saying about their products and what those conversations meant in light of their products.

DD: Absolutely! This brings them up to par with Google. Google’s products are free, their email service is free and free is always awesome in my book. Google’s cloud already has an expansive network of users.

LS: How does Google’s cloud stack up against Azure? Or does this even matter?

DD: I’m less interested and concerned about the direct cloud-to-cloud comparison of Azure versus Google. What we have to realize is that the merger gives Microsoft access to a plethora of already involved users with lots of “cloud” data and the ability for those B2B users to easily share their Office 365 work product with many others outside of their company’s user base. It gives Microsoft the ability to know who you might be working with, partnering with or just plain sharing data with.

If you look at what the popular email client CloudMagic has done with their “Sender Profile” feature that provides users a button labelled “Know More” after receiving or sending an email, you can see the sender’s organization, location, LinkedIn, Facebook and Twitter profiles of that based purely on their email address. Can you imagine the power and ability within any Microsoft controlled email product like computer-based Outlook or the cloud-based Office 365 knowing more about the sender of the message? Taking it up a notch, what could Microsoft do or build if they knew more about what sorts of B2B emails you get daily? What your company needs based on received content? This puts Microsoft RIGHT into the B2B data analytics game that many of their competitors are already in.

LS: I think you’re onto something. Google released Inbox by Google, which was an algorithm designed to organize the clutter of your inbox. Email is so terribly personal that I don’t think it ever really took off; we’ve all been using email for a long time and have our own human-driven algorithms. And IBM announced Verse, which was a kind of inbox manager, as well, but it seems to have morphed into a quasi-business/social collaboration tool. Isn’t there a cautionary tale in these two product lines that have seen very little pickup?

DD: Absolutely, but I think IBM had no real foundation in the email space to launch Verse. Inbox management apps are really a B2B tool and probably won’t see too much traction among B2C, so I’m not surprised that Inbox by Google is in a kind of limbo between the two.

The Microsoft deal is much more pointed and focused; it adds a new interesting spin to LinkedIn’s features and would start allowing the app to report your location similar to how the Google Maps app regularly reports and stores location history for the day. Geo-location would add a unique dimension to Microsoft’s data in addition to the social chatter of LinkedIn. Microsoft could ask and answer questions like which corporate titles are traveling more than others? What might be interesting markets that certain people are traveling to? What is being said in that marketplace and what tools if any are being used? What happens if Microsoft’s CEO all of a sudden starts showing up at 37.4233111, -122.0706458 (LinkedIn HQ GPS coordinates). Could it be about a partnership, merger or just plain lunchtime golf?

All this location information makes Microsoft better positioned to sell their products to companies AND opens a secondary data market to sell access to research and analytics firms hungry for this kind of focused B2B data. Airlines and hotels have to be excited at the prospect of learning more about their business travelers. Insights like where to build the next hotel and more information about business routes to add or hubs to build out could be mined and explored through this kind of data. Past travel history, conference attendance, etc. could all be gauged long in advance because people discuss it on social platforms like LinkedIn; smart vendors just need access to a rich source of data.

LS: Not to rain on your parade, but the scenario you described above has all kinds of crazy data and privacy implications. I don’t think half of the rosy future you described above would pass muster in the EU. Privacy hawks are, as we speak, sharpening their talons to sink them into the flesh of any future intel products, don’t you think?

DD: As awesome as it is for B2B marketing and marketers, you’re right, there are some needed product enhancements and permissioning that has to occur before any of the ideas I’ve mentioned can be brought to market. Many security and privacy people will want to review the app as it does change and, as they probably do, all new vendors or applications that are installed on their computers and mobile phones. That’s the easy part. Sort of like how users of Google Apps Collaboration cloud gives users full control of who can view, edit and own documents and more importantly be able to primary share first with their organization and co-workers before outsiders. My company ran through this exact assessment to ensure we weren’t leaking data once we made the jump to the cloud.

I also think that this won’t be an issue for the merger to continue here in the United States when it comes to antitrust issues or more importantly privacy issues. I think the European regulators will want to look at any changes or use of data by Microsoft with a magnifying glass (and maybe even an electron microscope) ensuring that the proper data transfer and use mechanisms are in place and that end users have been given the consent, notice, choice and control over their information that is expected and required. I’m sure Microsoft, being a leader in the privacy space, won’t have many problems ensuring they’ve given the end user the protection they deserve and are entitled to by law. Microsoft declared its support for the EU-U.S. Privacy Shield and has been a huge leader and supporter of privacy through the International Association of Privacy Professionals (IAPP).

LS: So taking privacy off the table, and the business strategy, what do you think Microsoft is trying to do from an end-user perspective? How are they trying to make our lives better?

DD: Microsoft says they are simply trying to alleviate business people from having to go back and forth between productivity tools and social networks; I believe that to some degree. This may have been where they started, but it’s not a guarantee that this is where they’ll wind up once they all dive into the technology and ferret out the true value of what they have.

LS: Will this merger make LinkedIn more secure? Or let me rephrase it; LinkedIn has lots and lots of data, and now that this data will be exposed and used by Microsoft, does this automatically paint a giant target on both companies?

DD: I’ve said it many times, the increase in security breaches is not about just having the data, but in how hackers will want to use that data to continue sending out nefarious things like spam, phishing and ransomware. The first step in doing bad things with email is compromising users, but if you can compromise a company, then you have more than just an address, you have the means by which to steal an identity.

 

The huge acquisition uptick in the marketing vertical over the past five years is intentional. Data, no matter how it’s obtained or used, is the new gold standard. As the world becomes ever more data-driven, smart businesses look to fully realize the benefits of the data revolution, from streamlining internal processes and communicating more ably with current and potential customers, to lowering costs and creating jobs. However, all of these potential future scenarios have to be tempered with a strict application of best practices security and data privacy.

As far as what you and I do, Microsoft is getting instant access to a mountain of user data, including contact and device preferences, demographics, brand and organizational affiliations and even company-level marketing spend metrics. We know how powerful detailed data can be as market research firms, hedge funds and retailers have all shown great interest in our item-level consumer receipt data. What LinkedIn delivers is data with proven practical applications (sell more LinkedIn ads or messages or whatever). One challenge will be convincing advertisers Microsoft will remain a neutral party (i.e. not muck with competitor ads and recruiting efforts).

Satya Nadella has already said they will not make sweeping changes to the platform and Weiner will retain great autonomy. That’s probably a smart move, and actually would be helpful to the users of it. However, what I’ve said throughout this Q&A is that they will change the underlying data-sharing technologies like GPS tracking or data reporting that the average user doesn’t see or really “care” about. That may be one of the biggest game changers to come out of this acquisition.

@LenShneyder and @ddayman

 

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Sovereign Wealth Funds as Cushion for Lean Purse

The federal government and its federating units are presently facing massive cash crunch due to the sharp decline in oil prices. The country has for decades depend solely on the revenue from oil sales. The federating units send their representatives to the federal capital every month to collect their share of the monthly allocations.

While their monthly trip to Abuja can be excused same cannot be said of the way the allocations and revenues generated have been spent in the last decade.

The situation has become so dire and disheartening as most of the state governments can no longer pay salaries. They now ask the federal government for bailout.

In 1926, George Samuel Clason a former US army issued the first of a famous series of pamphlets on thrift and financial success, using Babylonian parables. These were distributed in large quantities by financial institutions, the most famous being, The Richest Man in Babylon. It is one of most inspiring book on wealth ever written.While the secrets from the book were mostly directed to personal lives they are applicable and transferable to governments too.

In the book, Arkad, the richest man was asked how he has acquired his fortune. Arkad quoted the first piece of advice he received from Algamish, his mentor “I found the road to wealth when I decided that a part of all I earned was mine to keep.” The advice to save no less than a tenth of what Arkad earned was the start of a transformation he said. This is a golden rule and it applies to governments too.

Successive governments over the years have refused to keep and invest a part of what they earned. No individual or government will spend all during time of plenty and expect everything to be fine in time of famine.

Globally, countries as well as states who generate commodity driven revenue have been found to set aside part of their earnings for the future and the vehicle or platform mostly used is the sovereign wealth fund (SWF).

Resource prices are really volatile. They go up and down and if a government is making plans on these prices they should be very careful, a savings plan like the SWF can ensure that when the economy contracts there will be a buffer to sustain that government.

A sovereign wealth fund (SWF) is a state owned investment fund investing in the real and financial assets such as bonds, stocks, real estate or precious metals. They can also be invested in private equity fund or hedge fund. Generally, SWFs are funded by revenues from commodity exports or from foreign-exchange reserves held by the central bank.

It is estimated that there may be a total of eighty SWFs globally holding, holding about $7 trillion in total assets.

Norway, a commodity driven country like Nigeria, established the Government Petroleum fund in 1990, commonly referred to as the Oil fund, the fund changed its name to The Government Pension Fund Global in 2006.It was established after a decision by the country’s legislature to counter the effects of the decline in income and to smooth out the disruptive effects of highly fluctuating oil prices. The fund currently valued at about $1trillion, holding 1.3% of global equity market making it the world’s largest sovereign wealth fund is now a shining example on how SWF can succeed.

Kuwait has the first and oldest SWF in the world.  Founded in 1953, It is the 5th largest sovereign wealth fund in the world with assets exceeding $592 billion. Set up to manage the funds of the Kuwaiti Government in light of financial surpluses after the discovery of oil.

Another oil rich country Qatar, founded its own fund in 2005. The Qatar Investment Authority was set up to manage the oil and natural gas surpluses to strengthen the country’s economy by diversifying into new asset classes. QIA is estimated to hold in excess of $170 billion of assets.

There are other commodity driven countries who also use SWF to save and invest revenues from commodity sales. The interesting thing is while countries are commonly known to own SWF, oil rich federating states and provinces are also now embracing SWF as a way of saving for rainy day.

Alberta, an oil rich Canadian province established its Heritage Trust Fund (HSTF) in 1976 with three main objectives “to save for the future, to strengthen or diversify the economy, and to improve the quality of life of Albertans. At inception, the fund received 30 per cent of Alberta’s non-renewable resource royalties. It was worth $17.5 billion as of March 31, 2014 according to the Alberta government’s 2013-2014 annual report.

Alaska’s Permanent Fund was established the same year as Alberta’s Heritage Fund. At least 25 percent of all mineral lease rentals, royalties, royalty sales proceeds, federal mineral revenue-sharing payments and bonuses received by the state are placed in a permanent fund. The Fund grew from an initial investment of $734,000 in 1977 to approximately $53.7 billion as of July 9, 2015.

Texas’ Permanent School Fund is a sovereign wealth fund which serves to provide revenues for funding of public primary and secondary education in the US state; as of the end of fiscal 2014, the fund had an endowment of $36.3 billion.

After oil started booming from the Bakken Formation in North Dakota, state legislators established a sovereign wealth fund in 2010.The North Dakota Legacy Fund to help save and invest revenue from its oil sales, it is now worth $2.4Billion

Sovereign wealth funds as a vehicle for commodity rich states is an increasing phenomenon

The decision of the Federal Government of Nigeria to establish a National Sovereign Wealth Fund (NSWF) is by far one of the most significant economic policy decisions taken in recent times. The act establishing the National Sovereign Wealth Fund (NSWF) was signed into law in May 2011. The objective of the fund is to invest the savings gained on the difference between the budgeted and actual market prices for oil.

 

Although coming rather late for a commodity driven county like Nigeria, it’s a step in the right direction. At inception the fund was allocated $1billion as seed capital. While the fund is the third-largest in sub-Saharan Africa, after Botswana’s $6.9billion and Angola’s $5billion it still lags behind its peers in oil rich countries. Sadly, the fund has not received fresh funds since the government injected $1 billion in 2014.

Data from the office of the accountant general indicates that Ebonyi, Ekiti, Osun and Rivers states received N35 billion, N40billion, N46billion and N245 billion respectively from the federation account in year 2011. Data for 2012 also indicated similar amounts were received. The implication of this is that if these states have saved between 10%-30% of their monthly allocation they would have something to cushion the effect of the present cash crunch.

State legislators should pass laws that will mandate their various state governments to save a portion of their monthly allocation or revenue for the rainy day. The SWF, originally intended to counteract the boom and bust cycles of oil and commodity dependent economies like ours is a good platform that can help them in achieving this.

Today, as a country we have so much less to show for all the years of oil boom we have had. Our infrastructure gap is huge yet our savings is so lean and in most states there are no savings at all.

At the federal level the national assembly should pass laws that mandates the executive to compulsorily save every month, it is ludicrous that since the establishment of the country’s SWF with the seed capital, no fund has been contributed to it.

To actualize this, there has to be the political will to do it. Erstwhile Finance Minister Dr. Ngozi Okonjo-Iweala, blamed the country’s present economic situation on the zero political will of the immediate past government to save for the rainy day. In her speech in April 2016 at the George Washington University, Washington D.C. She said “In 2004 we saved $22 billion because the political will to do it was there. And when the 2008 /2009 crisis came, we were able to draw on those savings precisely to issue about a five per cent of GDP fiscal stimulus to the economy, and we never had to come to the Bank or the Fund. “This time around and this is the key now, you need not only to have the instrument, but you also need the political will. In my second time as a finance minister, from 2011 to 2015, we had the instrument, we had the means, we had done it before, but zero political will”.

Nothing should stand in of the way of both the federal and state government in seeing that they put everything in motion to actualize this. The executive and legislative arm of government should see this is an economic issue, SWFs act as stabilization funds during times of low revenue and this can promote economic development.

 

@jideolutuyi

 

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Softbank acquires U.K.-based chipmaker ARM for $32B

Japanese telecom giant SoftBank has confirmed  that it planned to acquire U.K.-based semiconductor chipmaker ARM Holdings (ARM) in a £24.3 billion ($32 billion) cash deal.

This deal represents Softbank’s biggest acquisition since the $21.3 billion buyout of U.S. telecoms company Sprint, and the biggest-ever acquisition of a European tech company.

Founded out of Cambridge, U.K., in 1990, ARM powers the processors in most of the world’s smartphones, including iPhones, and with its low power-consumption and cost the company is also pushing hard into the burgeoning Internet of Things (IoT) industry.

ARM, originally called Advanced RISC Machines, before switching to its acronym in 1998, was a joint venture between Apple, VLSI Technology, and Acorn Computers, and was chosen by Apple for use in its Newton PDA  device, which was a flop.

In the wake of Softbank’s acquisition, the Tokyo-based company said that it will maintain ARM’s Cambridge HQ, double its employee headcount in the U.K. over the next five years to six thousand, and retain its current partnership-based business model and senior management structure.

Masayoshi Son, chairman and CEO of SoftBank, said in a statement:

We have long admired ARM as a world-renowned and highly respected technology company that is by some distance the market-leader in its field. ARM will be an excellent strategic fit within the SoftBank group as we invest to capture the very significant opportunities provided by the “Internet of Things”.

This investment also marks our strong commitment to the U.K. and the competitive advantage provided by the deep pool of science and technology talent in Cambridge. As an integral part of the transaction, we intend to at least double the number of employees employed by ARM in the UK over the next five years.

SoftBank intends to invest in ARM, support its management team, accelerate its strategy and allow it to fully realise its potential beyond what is possible as a publicly listed company.  It is also intended that ARM will remain an independent business within SoftBank, and continue to be headquartered in Cambridge, U.K..

This is one of the most important acquisitions we have ever made, and I expect ARM to be a key pillar of SoftBank’s growth strategy going forward.

Today’s news comes less than a month after Softbank offloaded Clash of Clans-maker Supercell to Tencent  for more than $10 billion.

Softbank’s ARM acquisition represents one of the biggest tech acquisitions of all time, after Dell’s $67 million buyout of EMC  last year, and beats out Microsoft’s $26.2 billion acquisition of LinkedIn last month.

Though ARM’s board has approved the deal, its shareholders still have to give the green light — a 75 percent vote in favor of the scheme is required for the deal to proceed.

“It is the view of the board that this is a compelling offer for ARM Shareholders, which secures the delivery of future value today and in cash,” said ARM chairman Stuart Chamber. “The board of ARM is reassured that ARM will remain a very significant U.K. business and will continue to play a key role in the development of new technology. SoftBank has given assurances that it will invest considerably in the business, including doubling the U.K. headcount over the next five years and maintaining ARM’s unique culture and business model. ARM is an outstanding company with an exceptional track record of growth. The board believes that by accessing all the resources that SoftBank has to offer, ARM will be able to further accelerate the use of ARM-based technology wherever computing happens.”

Softbank’s investment in ARM is indicative of the value it sees in the Internet of Things, which is expected to see around two billion devices connected by 2020. We’re already seeing all manner of random connected products, including fridges, doorbells, and beds, and with ARM’s licensing model — which has led to it becoming used almost exclusively in the smartphone realm — Softbank is eyeing a future in which everything is powered by ARM’s technology.

@PaulSawers via @VentureBeat

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Social Enterprises- A Catalyst for Socio-Economic Growth

A country with a myriad of social ills like ours deserve a vibrant social economy that can solve its social problems. Our social economy can only be revolutionized by innovative and creative social entrepreneurs. Social entrepreneurs establish social enterprises which solve a social problem and create jobs at the same time.

Social enterprises are commercial strategies employed to maximize improvements in the society. It is structured in a way that the owners or facilitators are able to make profits from doing good.

I heard of social enterprise for the first time couple of years ago, when I sat on the board of a mid-sized charitable organization in Calgary, Canada. In an effort to raise the charity’s dwindling fund, one of the board members suggested that we set up a social enterprise generate more revenue. Since then I have monitored events within the social enterprise sector and its effect on the economy.

The sector is still developing and as such there exist variations in definition by different social enterprise bodies around the globe. While there may be variations to the definitions, one thing is universal in all the definitions; they are businesses that make community impacts. As the definition varies from country to country so also is the structure. There are different structures for a social enterprise from one country to the other and until recently there have not been proper legislation on the structure of social enterprises. Legally, there’s no businesses form that is called social enterprise.

Regardless of how it is structured, what differentiates them is that their social mission is as core to their business as any potential profit. It is worthy to note that a social enterprise is distinctively different from charities or a social responsible for profit business that engages in corporate social responsibility. The social enterprise business model is unique in its synthesis of financial and social goals.

Social enterprises may be the vehicle or catalyst to change the economy. They produce positive change as well as provide financial gains to the facilitators.

Recently the federal government launched its N500 billion social investment program and the question on every lips was how this will be carried out without a database or a platform. If the country has a vibrant social enterprise sector, some of these funds could be channeled through them. So also is the Federal Government’s school feeding program, this also could be channeled through social enterprises but alas, this cannot be so.

Governments all over the world have used and continue to use the social economy to reach the most vulnerable in the society.  In 1998, funding for the social economy was shared between the provincial and federal governments of Canada, and the dual governments made an investment of $54 million for employing people with disabilities. By 2004 the then Prime Minister Martin’s government announced a social economy stimulus of $100million over five years to support social and environmental entrepreneurs.

There is no doubt that the way out of our current economic crisis and the mono-product economy is to create inclusive sustainable markets. New policy briefs and research point to the importance of inclusiveness for economic development and this is where social entrepreneurship can help translate these policies to reality. Social enterprises provide vital resources to communities and they are visible in areas where public services are poor or lacking.

The dearth of social and environmental ills in Nigeria is alarming. We need innovative social entrepreneurs to facilitate enterprises that will address these social issues.  Drunk driving, discrimination on the less privileged, affordable legal representation, poor healthcare delivery, poor maternal healthcare, Heat wave, waste management, affordable housing, employment for people with disabilities, substance abuse, fake drugs, child care, care for the elderly. Others include environmental issues, poverty reduction, providing services and products to underserved communities, and developing social and cultural capital. All these present huge opportunities for social entrepreneurs. Social enterprise can fill these massive social gaps.These enterprises will no doubt stimulate economic activity and revitalization. Social enterprise can be a key element of economic diversity and development.

Notwithstanding its emerging sector status, there are available data that show how social enterprises create jobs as well as its rating as innovation pioneers.

In the UK, government data estimates that there are approximately 70,000 social enterprises in the UK contributing £18.5 billion to the UK economy (based upon 2012 Small Business Survey, 2013) and employing almost 1 million people.

Another report from the Social enterprise UK also show that close to half (49%) of all social enterprises are five years old or less. 35% are three years old or less more than three times the proportion of SME start-ups. In terms of new business formation in the UK, social enterprise is where the action is.

The report also recognized social enterprises as innovation pioneers and job creators indicating that the number of social enterprises introducing a new product or service in the last 12 months has increased to 59%. Among SMEs it has fallen to 38% while 41% of social enterprises created jobs in the past 12 months compared to 22% of SMEs. The value of social enterprises is indisputable.

 

Governments at every level should as a matter of exigency develop a social enterprise strategy framework that will set in motion the development of the social sector. Recently, the province of Manitoba in Canada launched its Manitoba Social Enterprise Strategy tagged “A strategy for creating jobs through social enterprise”. The 28 page document emphasized the importance of social enterprises to Manitoba’s economy. In November 2014 Nova Scotia, another Canadian province drafted its Social Enterprise Strategy framework. The document highlights the strategy and framework needed to grow the province’s social sector.

In Ontario, a province where social enterprise is thriving, the provincial government has continued to support the emerging sector so they can continue to make impact. Since 2007, the Ontario government has invested more than $6 million in the SIG (Social Innovation Generation) program. This program supports social entrepreneurs at all stages, helping them to develop and deliver programs that accelerate the growth of social enterprises.

 

In 2013, the Ministry of Economic Development, Trade and Employment established the Office for Social Enterprise to coordinate and promote social enterprise across the province as well as partner with private and non-for profit sector to expand tools available to social entrepreneurs.

In the spring of 2013, the School for Social Entrepreneurs- Ontario (SSE-O) graduated its first class of students.

In the same year the province launched ‘Impact’ a Social Enterprise Strategy for Ontario which outlines the clear steps the government will take to support social enterprises in Ontario, accelerate their growth and establish Ontario as a global leader in the area of social enterprise.

The Ontario government believes that social enterprises represent an exciting emerging sector, one that creates jobs, attracts investment and helps better the society and the environment.

All these efforts and initiatives has yielded positive results; it has established the province as the leading social enterprise center in Canada. Examples of the social enterprises making impact in the province are JUMP Math, a social enterprise founded in 2002 by mathematician and playwright Dr. John Mighton. Mighton developed a program that gives teachers a radically different way to teach students in grades 1 to 8. The results are impressive. Last year, a random study found Grade 5 students using JUMP doubled their math knowledge in five months, compared to students in a regular math program. Another one is the PARO Centre for Women’s Enterprise. PARO means “I am ready” in Latin and since 1995 this social enterprise has helped thousands of women turn their business ideas into reality. The PARO Centre for Women’s Enterprise began as a women’s microcredit fund. Today it is one of the strongest peer lenders of small business loans in North America. There is also Impact Junk Solutions, the business concept is simple: create jobs for people recovering from mental illness and provide a better alternative for junk removal services.

Social enterprise is attracting a lot of attention around the world as a great way to make the world a better place. Governments at all levels should see this as an economic issue that creates positivity as well as generate more revenue in form of taxes deducted from employees of social enterprises.

Some of the areas where the government can support the development of this emerging sector are:

  • Encourage the private and public institutions, as well as consumers to purchase from social enterprises.
  • Provide support in the setting up of a social enterprise association that will provide a centralized database and network for social enterprises.
  • Public policy can also help social enterprise development by establishing clear legal definitions of social enterprises in order to govern issues such as their tax treatment or access to public markets
  • Inserting social entrepreneurship within entrepreneurship education activities in schools, vocational education and training colleges and universities, is an important way of encouraging further development of social economy and enterprise
  • Provide sustainable finance to assist social enterprise from start-up to scale-up
  • Appoint Minister of Community Economic Development – assign an office for the social economy which will be responsible for making cross ministerial policy changes as well as being a one stop governmental office for social entrepreneurs.
  • Establish suitable mechanisms for monitoring, impact measurement and evaluation.
  •  Invest and support Social Enterprise Research to conduct cost benefit analysis and quantify the value of social enterprises that employ people

Jurgen Nagler made a strong case for social enterprises in his paper “The importance of social entrepreneurship for economic development policies” to the University of New South Wales, Sydney, he wrote thus “social enterprises should be seen by policy makers as a positive force, as change agents providing leading-edge innovation to unmet social needs. The recognition of Muhammad Yunus and the Grameen Bank with the Nobel Peace Prize 2006 for “their efforts to create economic and social development from below” (Nobel Committee,2006) is a first step towards recognizing social entrepreneurs. Economic development policies should foster entrepreneurship in general and especially when entrepreneurs take on social problems that the private for-profit and public sectors do not address or niches they overlook.”

One of the profound economic development benefits that social enterprises provide to society is that often, its services are directed to the very poor. While the private sector uses financial return on investment to measure its success, non for profit traditionally reports on social return on investment. Social enterprise however measures success with what Jed Eerson stated more than ten 10 years ago, a blended value bottom line. It is not financial or social, it is financial and social and this what makes it more significant.

 

@jideolutuyi

 

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Banks and Fintech- Friends or Foes​?

Despite the vast differences in organizational culture, banks and startups in the field of Fintech are a successful combination, when the main beneficiary of this cooperation is the customer

The steady increase in the number of Fintech companies in Israel and worldwide, raises the issue of the danger to the stature of banks. It is not only the growing number of these companies, but also, and especially, the capabilities of those Fintech companies to act quickly and flexibly and in a more focused way. They enjoy more room for maneuvering, are free of legal and regulatory restrictions, and operate in an inviting eco-system.

But are Fintech companies a real existential threat to banks?
In my view, the answer is – absolutely not. Fintech is an opportunity – perhaps even an historic one – for the banking industry.
Banks are becoming aware of the world of Fintech. Some know it well, and most of them choose to put their ego aside and cooperate. In many areas in the Israeli banking system, there is an understanding that cooperation with Fintech entrepreneurs can create a Win-Win opportunity for all parties, producing satisfied customers as a result of simplifying procedures and reducing costs.
This cooperation between banks and Fintechs is expressed in different ways: from mergers and acquisitions of technologies developed by Fintechs; to accelerators and innovation labs, where products and services for the benefit of customers are developed in cooperation with Fintechs.

Banks are on track
Two decades ago Bill Gates famously said that “Banking is necessary, banks are not”.
It seems that today, banks have been able to demonstrate that they understand banking and focus on customers and their needs, even – believe it or not – if it comes at the expense of profitability. It does not always happen as quickly or as desirably as possible, but banks are already on track, and they are fighting for the customer’s attention. And to draw it, they are willing to go through challenging, questioning, and perception-changing processes. It can be said that the banking industry is currently undergoing an accelerated evolution.
Fintech is one of the fastest growing fields in the world of high-tech and it seems as if everyone around is madly successful; every day someone else raises piles of money, exits are all over the place, and the regulators don’t impose limitations. This is creating a sense that success is guaranteed and all that is needed is to be proactive.
But this is far from reality. The entrepreneur’s road to success is long and challenging. Market penetration, reaching the end customer and the creation of trust are challenges that in most cases create a need for worthy partners. It is true that to be “free” means that you are on your own, but freedom is not always worth the cost.

The way to a successful partnership
Partnership between banks and Fintechs can certainly be wonderful and successful, but may also be difficult and frustrating. As in any partnership, the secret to success is communication and coordination of expectations.
Differences between the parties are significant and pose a challenge to mediation – from ongoing conduct through decision-making processes, organizational culture and not to mention the concept of timetables. These inherent differences may bring the parties to an impasse. Mapping gaps and aligning expectations in advance will result in a fruitful collaboration and shorten the path to success.
Each of the parties usually brings to the table something the other does not have: technology, knowledge, skills, a customer base and more. What’s important is that both parties bring complementary experience.
Banks, on the one hand, bring experience resulting from mileage accumulated with Fintech and innovation units that specialize not only in piloting, but also in implementation.
And Fintechs, on the other hand, bringing experience in finance, whether it is in the background of the entrepreneurs and the employees, or by virtue of the identity of the investor that supports them.

A technology-oriented approach
The first step in the innovation process in the bank is identifying or getting the idea to sprout. There are a variety of ways in which the bank does this: Hackathons; cooperation with accelerators, hubs, academics, technology giants and venture capital funds; participation in meet-ups; relations with banks worldwide; intra-organizational ideas; and the list goes on.
There is nothing better than an example to illustrate this. Two years ago, Bank Leumi identified “Scanovate”, that is engaged in mobile visualization and progressive scanning technology, as a startup with a product that has great potential. As part of a cooperation between Scanovate and Bank Leumi, a ‘Mobile Check Deposit’ service was developed, that allows customers to deposit checks through a mobile banking app, without physically depositing the check itself. The scanning and data processing technology of Scanovate is based on advanced Optical Character Recognition (OCR) algorithms for processing an image from video in real time, which the company developed. This technology operates on the user’s mobile device and is not dependent on an external server to transfer the data.

Although I have described this cooperation in a few lines, this is still a complex process, integrating innovation, technology, business development, marketing, business lines, implementation and more. Since then, the relationship between Scanovate and Bank Leumi has spawned a real partnership and even resulted in further product development such as “Snap & Pay”. The product allows customers to pay a variety of bills by simply pressing a button in the bank app. They take a picture of the bottom of the bill, select a credit card they wish to pay with and confirm the transaction.

How does it look from the Fintech side? Amir Fishman, CEO and co-founder of Scanovate, describes the cooperation between Leumi and Scanovate as such that creates a synergy which provides a technology and innovation-oriented approach that puts the customer experience and user convenience at the center: “The bank’s willingness to adopt out-of-the-box thinking as well as its capability to embrace a rapid learning process, combined with Scanovate’s technology, created a new and synergetic vision of a truly digital and innovative mobile banking  application, focused on the end user’s convenience and service experience”.

No problem, it’s impossible
Jerry Seinfeld was interviewed after his recent visit to Israel and said that Israelis have no gray areas and that their answer to each question is either “Of course, no problem” or “No way, it’s impossible”; an interesting and accurate insight of someone who knows a thing or two about the human psyche, but not so in our case.
Most of us, who choose to collaborate, shift around in the “gray” area with readiness to compromise, so that we can find a common way to provide the best product and service to the customer. In this context, what seemed impossible at first becomes possible later, even if it may be somewhat different from what we imagined at first. Therefore, it is important for both sides not to fall completely in love with the concept, the product, or the initial conception. It’s true that it’s “our baby” and we imagined it in a very specific way; it’s true that they are our customers and we know exactly what they want; but we must be flexible to changes and adjustments, because we do not have all the wisdom. It is part of growing up, and it is what gives us our ability to move forward to success.

In conclusion, if we return to the question in the title, it seems the answer is clear. Banks and Fintechs can be friends, when the main beneficiary of their friendship is the customer.

Michal Kissos Hertzog, Head of Digital & Innovation, Bank Leumi

 

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How to Be a Better Thinker, Innovator and Problem Solver

Cogs replaced hands so to speak during the U.S. Industrial Revolution when businesses felt a rush to automate manual tasks. Now the technology rush is removing the cogs as we hurry to replace people running the lines with automated systems. With artificial intelligence not too far away, the trend for less human involvement is set to continue into the future. So it makes sense that business is evolving, too, moving from a “doing” model to a “thinking” model. As technology handles more tasks, mental agility has never been more important. If we want to future-proof our businesses, and ourselves, we need to be able to think, re-think and even un-think current processes. Like anything, coming up with solutions and new ways to see things takes practice. Behavioral strategists Dan Gregory and Kieran Flanagan, authors of the new book Selfish, Scared & Stupid , teach people in business how to become better thinkers, innovators and problem solvers; here are their best tips to get your mind muscles working:

1. Ideas are a numbers game. When brainstorming, you want the numbers on your side. This is the secret to the best creative and problem-solving minds on the planet. You have to generate enough options to get the obvious thinking out of the way. Like reps at the gym, you need to push through the easy stuff and get to the difficult things for the best results. Your first ideas are obvious and thus first-level thinking. You need to go deeper than that to find gold. You must go beyond that first-level thinking to discover unseen ideas that truly solve the problem.

2. Think in questions. Train your brain to think in questions not statements. The problem with statements is that they presuppose a solution and can stop you from coming up with an innovative solution. Questions in contrast open up the solutions. Asking for a shelf sticker that draws attention to a product is very different from the question of how to increase noticeability at the shelf; it leads to different solutions. The first gives you exactly what you asked for, but the latter could lead to breakthrough ideas: new packaging designs, a revolutionary product design, sound-activated point of sale, or multiple products in new flavors.

3. Don’t come up with ideas. Come up with solutions. You need a problem to solve. One of the biggest problems we find is that people say, “I need a great idea,” and then they wonder why they can’t think of anything. We have never come up with a great idea in our combined 40-plus years in business, but we have come up with a huge number of innovative solutions. Ideas solve problems (even those the market is unconscious of), and if you have not defined a problem, chances are you will not miraculously have any ideas that are useful. Spend time looking for problems that need solving rather than trying to think differently about nothing in particular.

4. Back yourself into a corner. The tighter the corner, the more creative you seem to get. So much so that creative people have a mantra: “Grant me the freedom of a tight brief.” The brain seems to work better under duress; perhaps our survival instincts kick in and adrenaline fuels us to find a way out. So find a problem and then add parameters until you feel a little panicked. Slight beads of sweat forming on your brow are perfect.

5. Collide ideas and thinking. Your ability to think different is crucial. A great way to do this is to get different inputs and inspirations from different people, places, industries and systems. If you want to become an agile thinker, you have to learn beyond your own role, read a lot, be interested in everything and look to other industries to see what they are doing. The most successful patents often combine thinking or tech from different industries, and new product design can be as simple as colliding thinking. For example, putting use-by dates onto pillows as the Australian brand Tontine did is a food industry idea repurposed very successfully.

Are you ready to start working out and developing those idea muscles? You may be surprised at what you can do.

Dan Gregory & Kieran Flanagan

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Ori Yato S’ori

In Yoruba culture, Ori, literally meaning “head” refers to one’s spiritual intuition and destiny. It is the reflective spark of human consciousness embedded into the human essence, and therefore is often personified as an Orisha (god) in its own right. It is also believed that Ori be worshiped like Orisha. When things are not going right, Ori should be consulted. And to make things right Ori should be appeased. This is because whatever one becomes or whatever happens in one’s life is as destined by Ori.

In his journal , The Yoruba Concept of ori in relation to human destiny, Raymond Olutoyin Ogunade writes , “E. B. Idowu, the doyen of Yoruba Religion, has shown convincingly that Yoruba believe in ori. He examines the different elements that make human beings and argues that the most important element is ori. He contends that in the act of taking destiny, “it is the ori that comes into the world to fulfill a destiny.” Idowu believes that because of its pure origin, no ori is essentially bad. By this view, Idowu is also in agreement with the fact that no ori leaves heaven in a bad state. The Yoruba, therefore, believe in ori leaving heaven in a pure state”.

The Yoruba belief in ori is unwavering. Oriki, Ewi are some of the poetry that the Yorubas use to praise ori, Many artistes have also sang many songs to praise ori. In her song ‘Aseye’ Shola Allyson Olaniyi praised her ori so well and even pleaded thus “ori mi gbe mi de b’ire”. (My head please take me to a successful place)

The Yoruba believe the twins will not have the same destiny. We believe it’s possible for education to favor one twin’s ori and education may not to favor the other twin’s Ori. You will hear comments like, ori e o ni iyawo meji meaning your head doesn’t have two wives, or ori e o k’ore meaning your head doesn’t allow you too many friends. And so on so forth.

Using the Yoruba ‘Ori’ analogy we can also infer that as a country Nigeria’s head is different from others. And for Nigeria we can say, ori e o on’jale or ori e o nse jibiti, meaning Nigeria: your head doesn’t steal, your head doesn’t do crime.

The comments by President Buhari in London about some Nigerians spoiling the country’s image elicited different reactions from Nigerians. One of the popular line you hear during this brouhaha was that Nigerians are not the only one committing crimes and they are right. There are countries that commit more crime than Nigerians. So why are we always the most talked about? Is it the way proceeds of crime are brandished or that our “Ori’ is different than theirs? Perhaps it is our ori. Our ori doesn’t do crime.

I have three personal stories to tell. On my first day in class in Toronto in the winter of 2004, I stood in the lobby waiting for the instructor to arrive when a guy walked up to me. He is probably from one of our neighboring countries in West Africa but must have immigrated to Canada when he was younger, we exchanged pleasantries and asked me where I was from, I replied that I was from the largest black country in the world and asked him to guess, he guessed right on the second try. Then he laughed and said “and you are proud of that?” I replied yes and asked why not, he goes, don’t you know your people are thieves. I was furious and as a “JJC” just fresh from Naija I gave him the tongue lashing of his life.

Years later I went for my first job interview in the city of Calgary, it was a great company. While in Nigeria, I did my youth service with central bank of Nigeria Owerri and so it was still on my resume. When I got to the interview I was asked couple of questions and the next statement shocked me. The Controller turned to the Senior Accountant and said “we get a lot of fraudulent emails from this bank right”, the senior accountant nodded in agreement. I was shocked. I didn’t know what to say and I became defensive, defending Central bank and explaining to them that those emails do not actually emanate from the bank. I left the interview disappointed and thinking no way will I get the job. I was called on a weekend that I was the best for the job. According to them they called him on a weekend because they didn’t want me taking any other offer before Monday. I left that company with my head held high.

Couple of months later on the golf course, a Caucasian guy beckoned on me to join him on the golf cart, I agreed and joined him. I had barely sat down when he asked me where I was from, again I replied from the largest black country in the world. His first guess was South Africa, second was Sudan and his third guess was Nigeria when I said yes, he turned to me and said “you aren’t one of those guys that send me letters right? We both laughed and talked about it for a bit. According to him he strongly believes there are lots of good people in Nigeria.

Why am I staying all these? To let you know that as Nigerians our ori is different. Our head is not good for stealing. Our crime rubs off on all of us; it affects even those who didn’t commit any crime. If you are in diaspora you probably have witnessed how even our neighbors from African countries disparage us. They use all our negatives against us. When they are caught doing crime Nigerians don’t laugh at them, we don’t use it against them.

Our head is different from theirs; our head doesn’t like crime, our head only love success. It’s a good one with great destiny but one that doesn’t love crime. Here is what one caucasian man said to me some time ago “anytime I am at the airport and I see a black man walking majestically and confidently as if he owns the airport, only two things come to my mind. He is either a Nigerian or a black American”.

That’s the type of ori we have. An ori that can be well respected, An ori that’s very intelligent, an ori that leads. When you have this kind of ori and you color it with crime it’s bound to have negative outcome.

To get the best from our ori we need to eschew crime, abstain from all that tarnishes our ori. And for those who do not engage in any unwholesome behavior but keep friends who are into all sorts of crime, stop asking them how is the hustling. Tell them to disengage from it, tell them our ori is not good for crime.

When next you hear someone say Chinese, Russians or Mexicans do crime more than us and why is our name only mentioned your reply to them should be ori yato s’ori (One head is different from the other).

 

@jideolutuyi

Calgary, AB

 

 

 

 

 

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Nigeria should focus more on Local Direct Investment

Over the past decade, Nigerian government officials have acquired great admiration for foreign direct investment, also known as FDI. There has been a lot of junketing abroad, supposedly to attract FDIs into the country.

Actually, FDI has been rising in developing countries. Foreign Direct Investment is a company’s investment in a production plant in another country, an acquisition of a foreign firm or investment in a joint venture or strategic alliance with a foreign company. This makes it different from portfolio investment, which is an indirect investment into a foreign country via equities and bonds. Foreign direct investors are more stable contributors to a country’s economy than portfolio investors.

According to the 2015 fDi intelligence report, key recent FDI trends show that Africa witnessed the largest increase in inward investment with $87 billion of FDIs announced in 2014. Africa has some of the fastest-growing economies in the world. These high-growth economies and the continent’s emerging middle class attracted FDI in consumer-oriented industries, including food, IT, tourism, finance and retail. Globally, capital investment in greenfield FDI increased 1% from $642 billion in 2013 to $649 billion in 2014. India, Vietnam, Japan and Malaysia were four of the fastest growing destination countries for FDI in 2014, while Asia-Pacific region remained the leading destination for FDI in 2014 with 4,153 announced FDI projects at an estimated value of $250 billion. The region attracted 38% of all capital investment globally in 2014.

The increase in FDI flows to Africa is driven by international and regional markets seeking access to natural resources. The expectation for a sustained growth of an emerging middle class attracted FDI in consumer-oriented industries, including food, IT, tourism, finance and retail.

Intra-African investment is increasing, led by South Africa, Kenyan and Nigerian TNCs. According to World investment report, between 2009 and 2013, the share of announced cross-border Greenfield investments projects origination from within Africa increased to 18% from less than 10% in the preceding periods.

In Africa; Egypt, Angola, Morocco, Ghana and Zambia all moved into the top 10 destinations in the region by capital investment. While Egypt recorded the greatest increase in FDI with $18 billion of investment and a 42% increase in number of FDI project, Angola attracted $16 billion more FDI in 2014 than in 2013.

There has been considerable increase in the amount of FDI flowing into Nigeria over the years. In 2014, the fDi report says Nigeria attracted $11 billion in FDIs, the third largest recipient in Africa after Egypt and Angola. However, the increase in FDI has not had quantifiable impact in new jobs created. For most countries, job creation is the most important objective of investment incentives given to foreign firms.

It is, therefore, essential that federal and state officials give account to the vast majority of their unemployed citizens on the public resources that have been spent in efforts to attract FDIs. What has been the value of the foreign trips, tax breaks, tax holidays and other incentives employed to attract FDI?

There is no doubt that there are positive effects associated with FDI. With FDI comes improved productivity, technology and knowledge transfer and overall economic growth. There is also the ripple effect of competition that forces the local firms to increase their productivity so as to enable them stay in business. Suppliers and service providers have also known to benefit immensely from FDI.

I believe FDI is a necessary building-block in the development of a vibrant economy, particularly an emerging economy like ours. Nevertheless, there is a need to gear up efforts toward local direct investment (LDI), a more measurable and more impactful investment from a country’s own investors and entrepreneurs.

To grow our economy, we have to look inwards. Charity they say, begins at home. In some situations, LDI creates the environment for inflow of FDI. In this case, government officials would not need to crisscross the world to attract investment. But if domestic investment is not vibrant, foreign direct investors will overlook such market. Perhaps this is the reason we have not seen much results from the FDI-driven development model of the last decade.

Government policies should provide greater incentives to develop the local private sector and encourage small businesses to grow. The more small businesses grow, they would become the conglomerates of the future and increase the pool of LDI in the country. For government to accelerate the achievement of its development objective, there has to be a deliberate policy to grow the local economy from within.

In outlining his vision 2020, former Prime Minister of Malaysia, Mahathir Mohamad, established two programmes in 1991, the Government Transformation Programme and the Economic Transformation Programme. These programmes were meant to turn Malaysia into a high-income economy by year 2020 as well as address key areas that will boost local direct investments. These programmes have contributed immensely to the success of the modern Malaysian economy.

LDI leads to innovation in industry, foreign exchange savings; it also encourages a Research and Development (R&D) culture. Other benefits of encouraging locally-owned businesses include higher multipliers; because of their local orientation, they spend much of their revenues locally and reinvest within the country. This sustains the local economy and attracts more investment. Their relative immobility also means they are more accountable to local regulation. Foreign-owned business often challenge local regulations and threaten to leave if their objections or concerns are not met. Local businesses instead tend to adapt rather than flee.

The flux of foreign business creates enormous stress on the local economy. Over the years, our governments have offered lots of money in form of incentives to attract or retain FDI and these deals have been huge losses. These investors take the incentives, stay for a couple of years and then relocate. But stability is another benefit of LDI, as they would rarely move and the local investors are not inclined to move to South Africa or United Kingdom to get a higher rate of return for their investments.

To evolve the culture of sustainable LDI, governments at all levels must support small- and medium-sized enterprises, ensure that the local investment climate is conducive for local businesses, and there has to be concerted efforts to invest in soft and hard infrastructure. The local economy will benefit from every naira spent locally and the current pressure on our external reserves would not exist. A campaign to encourage LDI is tantamount to a campaign for made-in-Nigeria and it is the key to our economic transformation.

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