Where were we?

Where were we? When we look at standards all over the world and end up complaining about our status quo in politics, education, economy, culture, technology etc., we end up agreeing that advanced economies are far off, while we lag behind and it seems to me most times like the Scripture that reads “…For as the heavens are higher than the earth, so are my ways higher than your ways, and my thoughts than your thoughts”. Isaiah 55:9 (KJV) And it makes me want to ask if we are very far off, while others champion the cause-concept of “global village”. I have been watching with awe how key actors in the British government are dealing with the outcome of the Referendum and I just keep asking myself, what is wrong in my country? For many days now there has not been power supply from the national grid, while it has become history in some locations and it makes me think, where were we, when leadership qualities were distributed among nations by God? I am still trying to recover from one daunting experience that occurred during the Ramadan period. It is not new, but I assumed a new perspective of the situation just recently that I have been struggling with it and find it convenient to add it to this piece as a secondary motivation. I got to the ancient town, Bida (for those who do not know where the Town is, which is where I grew, it is in Niger State, not Niger Republic #chuckles) and met a sad news of burglary in my mom’s store. They succeeded in destroying some parts of the walls and made away with electronics and I asked why, then I remembered that it is a usual occurrence. Days before the Salah break, it is usual to hear news of bugled shops around town and the reason is to be able to get enough money for the celebration. There are two things I have learned from this situation: 1. Nigerians like to “overdo”. If I do not have money to sustain a lifestyle, pressure comes to make me want to cheat another through any means to get it. (evidence from Fraud triangle theory); and 2. Spirituality does not translate in the slightest to morality or ethical behavior. I hear of people who feel it is good as long as it is satisfying an interest. What in the world is the essence of fasting, when you resort to bugle a store to break the fast? Where were we, when others sat to think of how to move their nation forward? Where were we, when others proactively charted ways out of depression? We only relish making quick cash from bad situations. We are mostly looking to feast on the fortunes of others, such as in cases of crashed tankers carrying petroleum products or trucks carrying beverages and we justify our responses well (rationalization in the Fraud triangle theory answers that as well). We need to move on; we have passed this stage that we are still struggling with and in… Each day, sincerely ask yourself: where was I?

When Ceasar means business...

When Caesar means business “Give unto Caesar what belongs to Caesar’s” is a popular paraphrase of the answer Jesus gave to the Pharisees who planned on trapping Him with His words. People had a responsibility to pay tribute to Caesar and they did pay regardless of how inconvenient. In modern times however, Individuals and businesses seem not to be willing (as in ancient times) and do all they can to avoid paying tribute to Caesar. Having lost his patience at this point, Modern-day Caesar is making it clear that he will be taking it by “force”. The nation's budget is to rely heavily on internally-generated revenue in the form of taxes. Given the harsh economic times; falling oil revenue, depreciation of the Naira, rising inflation, high cost of living alongside low living standards, the government has embarked on an ambitious journey to turn the tides through aggressive fiscal policy aimed at spurring growth. With an aggregate expenditure of NGN 6.06 trillion, a target revenue of NGN 4.957 trillion has been given to the Federal Inland Revenue Service (FIRS) for the year 2016. The FIRS is therefore ready to use all arsenal at its disposal in realizing this target.The Big Boss of the FIRS, Babatunde Fowler, simply won’t be tolerating any laxity in national compliance. State Internal Revenue Services are sealing businesses in Lagos, Abuja and Ogun States. Last month, some business Offices had their offices marked down for default in remitting tax returns. Among them are Globacom and Swift network (both in Lagos) over non-remittance of VAT in the amount of NGN24.3 billion and NGN702 million respectively. The Ogun State Internal Revenue Service wasn’t to be left out of action either as it has recorded the stoppage of 45 businesses guilty of non-remittance since the last three years. NICON Insurance and NICON Luxury weren't spared in the wave of “remit or retreat” as their premises were closed over non-remittance of a total amount of NGN 6.2 billion representing a combination of Companies Income Tax (CIT) and Value-Added Tax (VAT) in May. The digital economy has provided an avenue for simplifying daily living and the Tax authorities are aware of the numerous opportunities this presents. Information Technology has necessitated the need for inventing electronic filing and online payment of taxes. As it seeks to draw tax eligible Individuals and Companies into its tax net, the FIRS is investing judiciously on technology. The online platform known as ITAS (Integrated Tax Administration System) was created in 2013 and has been upgraded for large scale tax transactions.The ITAS provides Individuals and companies the opportunity to file returns, obtain an e-TCC (Electronic Tax Clearance Certificate), view tax penalties,provide third parties the means of verifying Tax Identification Number (TIN), and so many other functions. The Babatunde Fowler era also introduced a Federal Engagement and Enlightenment Tax Team (FEETT), to provide adequate sensitization and awareness programmes to the masses on the moral duty of paying taxes, nonetheless the FEETT is yet to be on its feet as there has been no record of any engagement with the populace on tax related matters. Tax compliance in the country has been embarrassingly low. It's been noted by past and current finance ministers, Dr. Ngozi Okonjo-Iweala and Kemi Adeosun, that the nation records a very low tax compliance rate compared to the rest of the developing world. Mrs. Adeosun had earlier in April revealed the existence of 363 Companies that had never paid tax for seven months. Statistics has shown that Lagos has the highest tax returns, 40% of total revenue generated by all states (good reason for having the former LIRS boss to handle the helm of affairs at the Federal level); be that as it may, the FIRS aims at ensuring the stellar performances witnessed in Lagos cascades across the other states of the Federation. As the wave of ensuring compliance pervades the nation, I would like to cease this opportunity to encourage you to ensure you make your contribution. An understanding of the benefits of taxes in my view would help avoid evasion. In the words of Dalton Hugh "Tax is a compulsory contribution imposed by a public authority, irrespective of the exact amount of service rendered to the taxpayer in return, and not imposed as penalty for any legal offence." After all, God does concur that Caesar get his entitlement.

When Ceasar means business...

When Caesar means business “Give unto Caesar what belongs to Caesar’s” is a popular paraphrase of the answer Jesus gave to the Pharisees who planned on trapping Him with His words. People had a responsibility to pay tribute to Caesar and they did pay regardless of how inconvenient. In modern times however, Individuals and businesses seem not to be willing (as in ancient times) and do all they can to avoid paying tribute to Caesar. Having lost his patience at this point, Modern-day Caesar is making it clear that he will be taking it by “force”. The nation's budget is to rely heavily on internally-generated revenue in the form of taxes. Given the harsh economic times; falling oil revenue, depreciation of the Naira, rising inflation, high cost of living alongside low living standards, the government has embarked on an ambitious journey to turn the tides through aggressive fiscal policy aimed at spurring growth. With an aggregate expenditure of NGN 6.06 trillion, a target revenue of NGN 4.957 trillion has been given to the Federal Inland Revenue Service (FIRS) for the year 2016. The FIRS is therefore ready to use all arsenal at its disposal in realizing this target.The Big Boss of the FIRS, Babatunde Fowler, simply won’t be tolerating any laxity in national compliance. State Internal Revenue Services are sealing businesses in Lagos, Abuja and Ogun States. Last month, some business Offices had their offices marked down for default in remitting tax returns. Among them are Globacom and Swift network (both in Lagos) over non-remittance of VAT in the amount of NGN24.3 billion and NGN702 million respectively. The Ogun State Internal Revenue Service wasn’t to be left out of action either as it has recorded the stoppage of 45 businesses guilty of non-remittance since the last three years. NICON Insurance and NICON Luxury weren't spared in the wave of “remit or retreat” as their premises were closed over non-remittance of a total amount of NGN 6.2 billion representing a combination of Companies Income Tax (CIT) and Value-Added Tax (VAT) in May. The digital economy has provided an avenue for simplifying daily living and the Tax authorities are aware of the numerous opportunities this presents. Information Technology has necessitated the need for inventing electronic filing and online payment of taxes. As it seeks to draw tax eligible Individuals and Companies into its tax net, the FIRS is investing judiciously on technology. The online platform known as ITAS (Integrated Tax Administration System) was created in 2013 and has been upgraded for large scale tax transactions.The ITAS provides Individuals and companies the opportunity to file returns, obtain an e-TCC (Electronic Tax Clearance Certificate), view tax penalties,provide third parties the means of verifying Tax Identification Number (TIN), and so many other functions. The Babatunde Fowler era also introduced a Federal Engagement and Enlightenment Tax Team (FEETT), to provide adequate sensitization and awareness programmes to the masses on the moral duty of paying taxes, nonetheless the FEETT is yet to be on its feet as there has been no record of any engagement with the populace on tax related matters. Tax compliance in the country has been embarrassingly low. It's been noted by past and current finance ministers, Dr. Ngozi Okonjo-Iweala and Kemi Adeosun, that the nation records a very low tax compliance rate compared to the rest of the developing world. Mrs. Adeosun had earlier in April revealed the existence of 363 Companies that had never paid tax for seven months. Statistics has shown that Lagos has the highest tax returns, 40% of total revenue generated by all states (good reason for having the former LIRS boss to handle the helm of affairs at the Federal level); be that as it may, the FIRS aims at ensuring the stellar performances witnessed in Lagos cascades across the other states of the Federation. As the wave of ensuring compliance pervades the nation, I would like to cease this opportunity to encourage you to ensure you make your contribution. An understanding of the benefits of taxes in my view would help avoid evasion. In the words of Dalton Hugh "Tax is a compulsory contribution imposed by a public authority, irrespective of the exact amount of service rendered to the taxpayer in return, and not imposed as penalty for any legal offence." After all, God does concur that Caesar get his entitlement.

How powerful is the invisible hand?

How powerful is the invisible hand? The law of demand and supply or the price mechanism does tell us there exists an invisible hand that is responsible for the allocation of prices in a system. This is allured to the fact that when it comes to price determination, the market knows better. This was what the Scottish Economist Adam Smith in his 1776 book "An Inquiry into the nature and causes of wealth of Nations" meant when he said that "It is not from the benevolence of the butcher, the brewer, or the baker that we expect our dinner, but from their regard to their own interest.” I have what you want and I want what you have, so therefore let price find its place in the contest of the intensity of both our wants. The Nigerian Foreign Exchange Market has been dominated with a large number of buyers than sellers, consequently tilting the weight of chain-saw to the demand side and raising prices upwards. This has been a concern for not just the country but also for Foreign Investors and the global community at large. Let’s look into the matter at hand. In line with the economic sense of the market determining prices, the Central Bank of Nigeria has acquiesced to the requests of Economists, Analysts and Businessmen in taking out currency controls which had been maintained for 16 months. On the 16th of June, it released its guidelines for players in the Forex market and indicated its decision to supply the market through Foreign Market Primary Dealers (FMPD). In ensuring a smooth process of availing forex to the public, the monetary authority would be using about 8-10 FMPDs and would also provide a Secondary Market Intervention Sales (SMIS) mechanism to end users. The FMPDs are to serve as retailers (duly regulated) to provide buyers with the needed Foreign exchange. Necessary to say, that the new system adopted excludes sale to the BDCs (Bureau de Change) and the 41 items excluded from assess to forex remain ineligible - hurting manufacturers who are in need for production. The workings of the Futures market is a welcome development as it promises to conserve scarce Forex and prevent any unnecessary panic demand for the dollar. The CBN has unveiled the tenors available for the OTC Futures market and these include; 1M, 2M, 3M, 6M, 12M, 18, and 24M. It will actively pursue the OTC Futures market applying rates from the FMDQ and employing the NIBSS as its active agent. (For more on this, please see the CBN article “How the CBN Naira-settled OTC FX Futures Market will work) Africa's largest economy worth NGN 94 trillion though facing economic woes of rising inflation of 15.6%, unemployment rate of 12.1% and at the brink of an imminent recession is however capable of overturning it's negative economic woes with quality leadership, strong-will and a stroke of good fortune. It is obvious already that we need to strategically diversify and focus on sustainable agricultural investment as the year 2016 has taught us that if the Glut in the Oil market doesn't bring difficulties in revenue by crashing down prices, the Niger Delta Avengers (NDA) and other unpatriotic coalitions, could do its own bit in bringing the nation’s foreign earnings to its knees. More so is the economic debate on the competence of the leadership style of CBN government in taking reactionary stances to challenges that could have been addressed long before their convolution. Donald Kaberuka's comment bears an optimistic view "A flexible exchange rate was needed. But time was lost, hence the need for a supportive fiscal stance. A good start". Fitch, a global rating agency, has also seen a ray of optimism after endorsing the decision of the CBN to take off currency controls. “Naira devaluation could lead to a further spike in inflation, which rose to a six-year high of 15.6 per cent in May. But we think the inflation pass-through from the official rate is limited and a fall in the parallel rate would be deflationary, which along with the increasing availability of hard currency could lower inflation." What would be the reaction of the Nigeria foreign exchange market to this new development? We'll keep our fingers crossed as trading officially resumes on the 20th June, 2016.

Path dependence: Where We are now?

The mono-product economy has many lapses it is easily prone to. Most especially when it's product is finite in supply. This is where the problem lies for oil-dependent nations in the world. Nigeria's oil quantity was commercially discovered in Bayelsa state, 1958. Presently among the world's largest producer of oil (even more than Dubai), we apparently plan our economy on the returns of this product; and like the forecasted consequence of the lack of a meaningful diversification,  we find ourselves in a quandary. Who would have thought prices would fall from as high as $101 per barrel in August to about $82 per barrel presently: the cause of which ( in Steven covey terms) outside our circle of influence: Iraq reducing it's price, Japan returning to the use of nuclear power as opposed to hydro carbon powered stations. Oil insider future offload, United States increased geographical area for oil exploration, removal of the ban placed on Iran by the USA e.t.c.

Time to take a cue from Norway (the most successful nation in diversification from oil) , the UAE, Qatar and other councils of the Gulf who have meaningfully implemented a workable strategy for their economy's redirection. According to IMF,  QATAR is projected to grow it's non-oilector by 9.1% between 2012-2016. The Norwegian economy has been able invest it's proceeds from oil in a sovereign wealth fund estimated at around $600 billion which is higher than our rebased GDP of $510 billion. The strength of it's efforts to diversify is directed to manufacturing and industry.

With good leadership and deliberation, our focus (I prospect ) should not be so much laid in raising taxes paid by producers but should be directed at encouraging investment and promoting the attraction of the comatose manufacturing sector such as  textile. In addition to this, I believe more effort be concerted towards value addition to our erstwhile primary resources. In the words of my Indian friend Ronnie, "Nigeria is both rich in Oil and soil; rich enough to overthrow Dubai 's growth by 200%". It's time we hold onto national progressive values and promote it's relevance beyond the current power tussle between parties and individuals. There's more we're throwing away (through our present lack of foresight) than our opportunities and wealth;  we're toying with a future. It's time to grow this economy from the scratch through deliberate, clear, concise and accountable action strategies using all at our disposal.

I believe Nigeria can compete with the USA and China on the ground of economics, unity and leadership.

What's your thought?

Share with me on my twitter handle @DkayodeAlli

Path dependence: Where We are now?

Path dependence: Where We are now?
The mono-product economy has many lapses it is easily prone to. Most especially when it's product is finite in supply. This is where the problem lies for oil-dependent nations in the world. Nigeria's oil quantity was commercially discovered in Bayelsa state, 1958. Presently among the world's largest producer of oil (even more than Dubai), we apparently plan our economy on the returns of this product; and like the forecasted consequence of the lack of a meaningful diversification,  we find ourselves in a quandary. Who would have thought prices would fall from as high as $101 per barrel in August to about $82 per barrel presently: the cause of which ( in Steven covey terms) outside our circle of influence: Iraq reducing it's price, Japan returning to the use of nuclear power as opposed to hydro carbon powered stations. Oil insider future offload, United States increased geographical area for oil exploration, removal of the ban placed on Iran by the USA e.t.c.
Time to take a cue from Norway (the most successful nation in diversification from oil) , the UAE, Qatar and other councils of the Gulf who have meaningfully implemented a workable strategy for their economy's redirection. According to IMF,  QATAR is projected to grow it's non-oilector by 9.1% between 2012-2016. The Norwegian economy has been able invest it's proceeds from oil in a sovereign wealth fund estimated at around $600 billion which is higher than our rebased GDP of $510 billion. The strength of it's efforts to diversify is directed to manufacturing and industry.
With good leadership and deliberation, our focus (I prospect ) should not be so much laid in raising taxes paid by producers but should be directed at encouraging investment and promoting the attraction of the comatose manufacturing sector such as  textile. In addition to this, I believe more effort be concerted towards value addition to our erstwhile primary resources. In the words of my Indian friend Ronnie, "Nigeria is both rich in Oil and soil; rich enough to overthrow Dubai 's growth by 200%". It's time we hold onto national progressive values and promote it's relevance beyond the current power tussle between parties and individuals. There's more we're throwing away (through our present lack of foresight) than our opportunities and wealth;  we're toying with a future. It's time to grow this economy from the scratch through deliberate, clear, concise and accountable action strategies using all at our disposal.
I believe Nigeria can compete with the USA and China on the ground of economics, unity and leadership.
What's your thought?
Share with me on my twitter handle @DkayodeAlli

Path dependence: Where We are now?

Path dependence: Where We are now?
The mono-product economy has many lapses it is easily prone to. Most especially when it's product is finite in supply. This is where the problem lies for oil-dependent nations in the world. Nigeria's oil quantity was commercially discovered in Bayelsa state, 1958. Presently among the world's largest producer of oil (even more than Dubai), we apparently plan our economy on the returns of this product; and like the forecasted consequence of the lack of a meaningful diversification,  we find ourselves in a quandary. Who would have thought prices would fall from as high as $101 per barrel in August to about $82 per barrel presently: the cause of which ( in Steven covey terms) outside our circle of influence: Iraq reducing it's price, Japan returning to the use of nuclear power as opposed to hydro carbon powered stations. Oil insider future offload, United States increased geographical area for oil exploration, removal of the ban placed on Iran by the USA e.t.c.
Time to take a cue from Norway (the most successful nation in diversification from oil) , the UAE, Qatar and other councils of the Gulf who have meaningfully implemented a workable strategy for their economy's redirection. According to IMF,  QATAR is projected to grow it's non-oilector by 9.1% between 2012-2016. The Norwegian economy has been able invest it's proceeds from oil in a sovereign wealth fund estimated at around $600 billion which is higher than our rebased GDP of $510 billion. The strength of it's efforts to diversify is directed to manufacturing and industry.
With good leadership and deliberation, our focus (I prospect ) should not be so much laid in raising taxes paid by producers but should be directed at encouraging investment and promoting the attraction of the comatose manufacturing sector such as  textile. In addition to this, I believe more effort be concerted towards value addition to our erstwhile primary resources. In the words of my Indian friend Ronnie, "Nigeria is both rich in Oil and soil; rich enough to overthrow Dubai 's growth by 200%". It's time we hold onto national progressive values and promote it's relevance beyond the current power tussle between parties and individuals. There's more we're throwing away (through our present lack of foresight) than our opportunities and wealth;  we're toying with a future. It's time to grow this economy from the scratch through deliberate, clear, concise and accountable action strategies using all at our disposal.
I believe Nigeria can compete with the USA and China on the ground of economics, unity and leadership.
What's your thought?
Share with me on my twitter handle @DkayodeAlli