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Fresh threat to CBN’s autonomy worries stakeholders

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Although her aides deny she made the statement, the recent remark attributed to the Minister of Finance, Mrs. Kemi Adeosun, in which she reportedly called for a whittling down of the powers of the Governor of the Central Bank of Nigeria (CBN), continues to bother stakeholders in the financial sector. TONY CHUKWUNYEM writes

Although her aides deny she made the statement, the recent remark attributed to the Minister of Finance, Mrs. Kemi Adeosun, in which she reportedly called for a whittling down of the powers of the Governor of the Central Bank of Nigeria (CBN), continues to bother stakeholders in the financial sector. TONY CHUKWUNYEM writes

With speculation mounting at that time about alleged attempts to force him to resign, former Governor of the Central Bank of Nigeria (CBN) Lamido Sanusi, warned that Nigeria’s economy would be significantly endangered if the independence of the apex bank was undermined. He told journalists on the sidelines of the World Economic Forum in Davos, Switzerland, in January 2014 that maintaining the independence of the CBN would be a major challenge that his successor will have to contend with. He stressed that it was important for a strong individual to be appointed to head the bank, due to the critical role it plays in the development of the country.

Importance of CBN autonomy

He said “Any undermining of the CBN’s independence may hurt the economy. If anyone tampers with it, the markets would punish the economy.

The CBN is a very strong institution that needs a strong leader and I think one of the things we have achieved over the last four or five years is to show that we can have an independent central bank in Africa.

“It is extremely important from the fiscal side, it is extremely important from the governance side, that the governor of the central bank is able to speak independently of political authority and raise an alarm and concerns and give constructive criticism and advice.”

But a few weeks after Sanusi made this statement, he was suspended from office by then President Goodluck Jonathan for allegedly breaching enabling laws, due process and mandate of the CBN. Interestingly, only last Wednesday, during her send-off celebration in Abuja, former Deputy Governor, Economic Policy, CBN, Dr. Sarah Alade, gave an insight into the kind of turmoil that ensued at the CBN when she acted as governor for a brief period following the manner of Sanusi’s ouster.

So not a few eyebrows were raised in financial circles on September 20 last year, when the Minister of Finance, Mrs. Kemi Adeosun, called on the CBN to lower interest rates.

Although most analysts probably regarded the move as the usual gambit of fiscal authorities desirous of boosting growth in the economy despite the banking watchdog’s concerns about inflation, there was unease in some quarters because the minister made the call on the eve of the CBN’s Monetary Policy Committee (MPC) announcing its decision on interest rates.

Critics saw her remarks as being designed to influence the outcome of the MPC’s meeting. In fact, the minister had said at the time “As you know, the Mon etary Policy Committee is meeting today and my position has been, ‘look this government is spending its way out of trouble, and that spending, much of it is being borrowed. So if you increase the interest rate, you increase our cost of debt service’. “In an ideal world, I need lower interest rates. I think business, when you are in a recession you cut interest rate to stimulate activity.

So we would love to see the MPC consider how they can help us lower interest rates,” she stated. It is, of course, no longer news that the MPC ignored the minister and voted to retain its key interest rate at 14 per cent, a move that earned it praises from respected financial experts, including former CBN Governor, Sanusi. Commenting on the MPC’s stance, Sanusi said: “I think it is a positive thing when the fiscal authorities and the many people in the private sector said they wanted a lower interest rate.

I was concerned that the CBN would succumb to pressure. And the fact that the CBN did not succumb to the pressure is a fact that it is beginning to claim its independence, which is a very positive thing.” It was probably against this background that the recent statement by the finance minister, in which she was reported to have called for a reduction of the powers of the governor of the CBN, is generating heated debate among analysts.

CBN governor’s ‘excessive powers

According to the report, Mrs. Adeosun made the call last week while receiving members of the House of Representatives Tactical Committee on recession. She allegedly blamed the extensive powers of governors of CBN for the disconnect between monetary and fiscal policies.

She was further alleged to have pleaded with the National Assembly to pass legislation reducing the powers of the governor and instituting a system of checks and balances for the regulator.

Adeosun was also alleged to have said that it amounted to excesses on the part of the CBN governor to decide and act on financial matters without recourse to the finance minister, who is constitutionally required to supervise financial policies and programmes of the Federal Government.

She was quoted as saying “I want to correct the impression that the CBN is under us. They are not. Unfortunately, a law was passed, making them independent and giving them more powers.

This has resulted in one person having so much power. “In the time of Professor Charles Soludo as CBN governor, he went to the National Assembly asking for more powers and you can see where that has taken us to. So, we are back to the legislature to help us correct this problem of too much power. As a result, there are no checks and balances.”

Experts oppose Ministers’ request

However, the reaction of financial experts to the Minister’s call have been generally negative, with virtually all of them who spoke with New Telegraph urging the National Assembly not to accede to her request. For instance, in his reaction, a Partner at David Gold & Co. (Chartered Accountants & System Auditors), Dr. David Aheruvoh, said: “Because of the important role they per- central banks all over the world should be autonomous and have enormous powers.

If they are not autonomous, the economy will be in shambles; politicians will run the show. Central banks should be given a lot of powers so that they can be held responsible if things are going wrong with the economy.”

According to him, instead of advocating for a reduction of the powers of the CBN governor, the minister should state exactly the aspects of monetary policy that she is not happy with about and the CBN will listen to her. “The CBN is a listening organisation, you are free to tell them where they have gone wrong and if they see that you have a strong argument, they will listen to you,” he said. Also, the Head of the Nigerian chapter of the Institute of Certified Forensic Accountants, Dr. Richard Mayungbe, said: “The autonomy of the CBN is sacrosanct so it should not be tampered with otherwise there would be chaos.

The Minister’s remarks show that there is no harmony between fiscal and monetary authorities. I will suggest that the MPC should be expanded to accommodate experts from the Ministry of Finance.”

He noted that dissatisfaction in some quarters with the CBN’s management of its forex policies was responsible for the call for its powers to be reduced. Similarly, a financial analyst, Mr. Ben Odiaka, argued that the minister’s statement could be an indication that she was having a tough time carrying out her responsibilities. “The finance minister’s duty is to ensure that fiscal spending goes into boosting productivity and Gross Domestic Product (GDP) while the CBN governor’s role is purely monetary.

However, they have to work together for the good of the economy.

The minister should desist from blaming the CBN governor for whatever challenges she is facing otherwise she would never be able to find a solution to the nation’s economic woes”, he said.

It will be recalled that a national newspaper reported the Director-General, West African Institute for Financial and Economic Management (WAIFEM), Professor Akpan Ekpo, as arguing that the minister’s call is not in line with global best practices. He was quoted as saying : “I have no details, but if this is actually what she said, it is not acceptable.

The central bank should remain independent and not be brought under the Ministry of Finance. Nigeria is too large and not equipped for that arrangement. The CBN should not be seen as a subset of the ministry.”

Conclusion

As an industry source pointed out, even if the finance minister has some valid reasons for seeking a reduction of the powers of the CBN, bringing up the issue at this time could distract from the all important task of boosting economic growth.

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Declining Interest in STEM Education in Nigeria: The Need for Urgent Intervention

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By 2030, more than half of the jobs in the world will be STEM – Science, Technology, Engineering and Mathematics – based. According to research from Brookings – a Washington based research institution – more STEM-oriented metropolitan economies perform strongly on a wide range of economic indicators, from innovation to employment.

But how prepared is Nigeria for this reality? Are students in Nigerian schools equipped to take advantage of this opportunity?

Technology companies are springing up, the number of jobs requiring STEM based skills is on the increase, but it is sad that Nigerian students are poorly equipped to fill this huge gap. The challenges range from poverty, poor school funding and waning interest from students, to poorly trained teachers, inadequate learning aids, incessant strikes, among others.

Consequently, traditional education in Nigeria is failing, with STEM education being the worst hit. Students are largely uninspired to pursue their passion in STEM related fields, thereby leaving them unprepared for the opportunities and challenges of the 21st century world.

In a quest to change this negative trend, integrated digital payment and commerce company, Interswitch is launching an initiative conceived and developed to promote STEM education in Nigeria by providing the right support and reward for students and other stakeholders.

The initiative, called Interswitch SPAK, is poised to support young Nigerians who are interested in acquiring the problem-solving skills that come with a solid STEM education, in order to fix the challenges facing Nigeria in various sectors of the economy. This initiative would ultimately position young Nigerian professionals to compete favourably with their colleagues globally.

To kickstart the initiative, a national science competition is set to begin in April 2018. The competition will feature students from all states of the federation competing in core STEM subjects like Physics, Chemistry, Biology and Mathematics.

The top two students in the competition will be awarded a five-year scholarship, a Mac laptop and gold trophy; and a 3-year scholarship, a laptop and a silver trophy respectively. While the third position will receive a-two-year scholarship, a laptop, and a bronze trophy.

This is indeed a laudable initiative which should increase student interest and enrolment in STEM subjects, among other benefits.

Owing to existing incompetence levels, a large number of jobs in Nigeria’s employment ecosystem have been outsourced to expatriates. Initiatives like SPAK will on the long run increase competitiveness and improve employment levels for Nigerians. And as a matter of cause-and-effect, improved STEM skills at the grass roots will equal greater employment, lower rate of job losses, higher exports and a direct positive impact on Nigeria’s GDP.

While STEM education may have been plagued by various challenges in the past, Interswitch SPAK is one great step towards ameliorating the situation, and it deserves the support and commendation of every stakeholder. One also hopes that other successful Nigerian tech companies will be inspired by this to create similar opportunities for the nation’s education system.

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Sokoto introduces tractor hire scheme

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Sokoto state government said it will start a tractor hire scheme to boost mechanization in farms and assist farmers to enhance their production capacity.

Governor Aminu Waziri Tambuwal stated this in Kware LGA when he inspected agricultural processing machines to be distributed to farmers under the state’s FADAMA III additional funding scheme.

“We are starting with 30 tractors, with each of the three senatorial districts to have 10 tractors each. This initiative will be implemented with the collaboration of the FADAMA III coordinating office, the state ministry of agriculture and the state investment company which will provide the tractors,” the Governor stated.

 

He said a strict vetting process will be implemented for those to benefit from the gesture.

“We want to ensure that both the small and large scale farmers have access to the tractors and other machineries.

“We hope to expand the scheme to ensure we have enough tractors to help our farmers have access to modern farm tools at affordable prices,” he added.

Tambuwal said 127 farmer Processing Groups, made up of 1,385 small-holder farmers, have benefitted from the agricultural processing machines and equipment distributed to farmers across the state by the FADAMA III office in Sokoto.

According to him, in addition to the creation of two agricultural produce aggregation centres in the state, eleven tomato production net houses have been established at various locations in the state.

“This gesture is part of our collective efforts towards modernizing our farming techniques so as to improve yield and income of our farmers,” he stated.

The Governor further revealed that 243 unemployed youths have been trained to embrace agriculture, saying this was done with a view to exploring the agribusiness sector and instilling in the youths and women the technical and practical skills that could enhance their competitiveness in agri-prenueship.

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Accenture: Technology fast changing lifestyles

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Technology is now firmly embedded throughout our everyday lives and is reshaping large parts of society, Accenture’s Nigeria’s Managing Director Technology, Mr. Niyi Tayo, has said.

 

He said this during the presentation of a new report by the company in Lagos. Tayo explained that advancing technology is fueling intelligent enterprises and that this requires fundamental shift in leadership as contained in Accenture Tech Vision 2018.

 

According to him, just as cities developed around ports and then railroads, or people rebuilt their lives around electricity, the world today is reimagining itself around digital innovation — and, by extension, the companies that provide those services. He said this digital trend, thus, requires a new type of relationship, built on trust and the sharing of large amounts of personal information in a secure manner.

 

According to Tayo, Nigerian banks and telecommunication companies are also taking the first steps towards artificial intelligence (AI) to improve customer service by implementing chatbots. Besides, he said that they are beginning to use advanced analytics to provide next best product offers to increase product uptake and fraud analytics to manage risks.

 

The Technology Vision identifies five emerging technology trends that companies must address if they are to build the partnerships needed to succeed in today’s digital economy: The Technology Vision identifies five emerging technology trends that companies must address if they are to build the partnerships needed to succeed in today’s digital economy, which include citizen AI, extended reality, data veracity, frictionless business and Internet of Thinking (IoTh).

 

 

“Through these new partnerships with customers, employees and business collaborators, companies are building greater trust and further integrating themselves into society, becoming more indispensable and fueling their own growth,” Niyi said.

 

In the report, Accenture noted that adopting AI for growth and positive social impact means forming new partnerships with customers and business partners Rapid advances in AI and other technologies are accelerating the creation of intelligent enterprises and enabling companies to integrate themselves into people’s lives, according to the annual technology report that predicts key technology trends likely to disrupt business over the next three years.

 

However, capitalising on growth opportunities while also having a positive impact on society requires a new era of leadership that prioritizes trust and greater responsibility, the report said.

 

The 2018 study highlights how rapid advancements in technologies, including AI, advanced analytics and the cloud, are enabling companies to not just create innovative products and services, but change the way people work and live.

 

 

This, in turn, is changing companies’ relationships with their customers, employees and business partners. As part of the Technology Vision, Accenture surveyed more than 6,300 business and IT executives worldwide.

 

More than four in five respondents (84 per cent) agree that through technology, companies are weaving themselves seamlessly into the fabric of how people live today. For example, they reported that Google, through its many applications and analytics capabilities, has integrated itself into people’s everyday lives thereby influencing their way of life.

 

Google maps are used for journey management, references and suggestions on places, products and services of interest and through this, Google can shape people’s consumption behaviours. Also, Feedback from users can influence uptake of suggestions from Google by other people.

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