"China Capable of Same Exploitative Practices As Old Colonial Powers" - Lamido Sanusi On Financial Times

It is time for Africans to wake up to the realities of their romance with China. Nigeria, a country with a large domestic market of more than 160m people, spends huge resources importing consumer goods from China that should be produced locally. We buy textiles, fabric, leather goods, tomato paste, starch, furniture, electronics, building materials and plastic goods. I could go on.

The Chinese, on the other hand, buy Nigeria’s crude oil. In much of Africa, they have set up huge mining operations. They have also built infrastructure. But, with exceptions, they have done so using
equipment and labour imported from home, without transferring skills to local communities.

 

So China takes our primary goods and sells us manufactured ones. This was also the essence of colonialism. The British went to Africa and India to secure raw materials and markets. Africa is now willingly opening itself up to a new form of imperialism.

The days of the Non-Aligned Movement that united us after colonialism are gone. China is no longer a fellow under-developed economy – it is the world’s second- biggest, capable of the same forms of exploitation as the west. It is a significant contributor to Africa’s deindustrialisation and underdevelopment.

My father was Nigeria’s ambassador to Beijing in the early 1970s. He adored Chairman Mao Zedong’s China, which for him was one in which the black African – seen everywhere else at the time as inferior – was worthy of respect.

His experience was not unique. A romantic view of China is quite common among African imaginations – including mine. Before his sojourn in Beijing, he was the typical Europhile, committed to a vision of African “progress” defined by replicating western ways of doing things. Afterwards, when he became permanent secretary in the external affairs ministry, the influence of China’s anti-colonial stance was written all over the foreign policy he crafted, backing liberation
movements in Portuguese colonies and challenging South Africa’s apartheid regime.

This African love of China is founded on a vision of the country as a saviour, a partner, a model. But working as governor of Nigeria’s central bank has given me pause for thought. We cannot blame the Chinese, or any other foreign power, for our country’s problems. We must blame ourselves for our fuel subsidy scams, for oil theft in the Niger Delta, for our neglect of agriculture and education, and for our limitless tolerance of incompetence. That said, it is a critical precondition for development in Nigeria and the rest of Africa that we remove the rose-tinted glasses through which we view China.

Three decades ago, China had a significant advantage over Africa in its cheap labour costs. It is losing that advantage as its economy grows and prosperity spreads. Africa must seize the moment. We must encourage a shift from consuming Chinese-made goods to making and consuming our own. We must add value to our own agricultural products. Nigeria and other oil producers need to refine crude; build petrochemical industries and use gas reserves – at present often squandered in flaring at oil wells – for power generation and gas-based industries such as fertiliser production.

For Africa to realise its economic potential, we need to build first-class infrastructure. This should service an afro-centric vision of economic policies. African nations will not develop by selling
commodities to Europe, America and China. We may not be able to compete immediately in selling manufactured goods to Europe. But in the short term, with the right infrastructure, we have a huge domestic market. Here, we must see China for what it is: a competitor.

We must not only produce locally goods in which we can build comparative advantage, but also actively fight off Chinese imports promoted by predatory policies. Finally, while African labour may be cheaper than China’s, productivity remains very low. Investment in tec nical and vocational education is critical. Africa must recognise that China – like the US, Russia, Britain, Brazil and the rest – is in Africa not for African interests but its own. Th romance must be replaced by hard-nosed economic thinking. Engage ent must be on terms that allow the Chinese to make money while developing the continent, such as incentives to set up manufacturing on African soil and policies to ensure employment of Africans.

Being my father’s son, I cannot recommend a divorce. However, a review of the exploitative elements in this marital contract is long overdue. Every romance begins with partners blind to each other’s flaws before the scales fall away and we see the partner, warts and all. We may remain together – but at least there are no illusions.

The writer has been governor of the Central Bank of Nigeria since 2009. The views expressed in this article are his own.

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CPC Blasts labour Leaders Over Call For Sanusi's Sack

The Congress for Progressive Change (CPC) has dismissed the call by the Nigeria Labour Congress for the sack of Mallam Sanusi Lamido Sanusi, the governor of the Central Bank of Nigeria, as hypocritical, cheap and opportunistic.  Mallam Sanusi had recommended to the federal government the firing of 50 per cent of its workers in view of its overwhelming recurrent expenditure.


“Whilst we do not agree that the cause of the exorbitant recurrent expenditure is wholly due to the size of the public service work-force and that the sacking of half its size is the solution to the identified problem, we believe the call for the call for the sacking of the forthright Public officer for volunteering his personal opinion is equally preposterous,” CPC said today in a statement signed by Rotimi Fashakin, its National Publicity Secretary.

CPC that the fiscal indiscipline of this Jonathan-led administration has exacerbated Nigeria’s malaise, and that rather than vilifying the CBN governor for expressing a personal opinion, the important thing ought to be meaningful discourse on how to extricate Nigeria from the financial recklessness of the PDP-led Federal Government.

“As a Party, we have equally taken note of the ignominious manner this present crop of Labour leadership truncated, in January 2012, the people’s popular refusal to yield to the exploitative tendencies of the Nation’s rulers,” the statement said.

“In the course of scuttling the people’s revolt, some of these Labour leaders got appointed into some dodgy committees that were not primed to achieve result. This is why we view this call by the Labour leaders for Sanusi’s sack as a cheap, opportunistic (albeit languid) ploy to crawl back to the people’s reckoning.”
It warned that responsible leadership is about selflessness and consistency, and advised Nigeria’s labour leaders to critically examine the policies of governments nationwide which impinge on the well-being of the people “instead of looking for scape-goat for cheap populism.”

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President Jonathan To Increase Fuel Pump Price In 2013

There were strong indications yesterday that the Federal Government of Nigeria would increase the fuel pump price in 2013. Nigerian President Goodluck Jonathan had on Thursday in Abuja said total fuel subsidy removal was a must. He stated that only total removal of subsidy on petroleum products would attract investors to the oil sector and end the importation of fuel.

Local news agency investigations have revealed that the President’s statement was a prelude to another partial deregulation in 2013 because the N971bn fuel subsidy budget for 2013 would not sustain importation of the product throughout the year.

The amount is N83bn or 9.35 per cent higher than the N888bn that is currently being spent in the 2012 fiscal year. It was reliably gathered that government had opted for a phased deregulation of the downstream sector, which would lead to a price hike.

Top sources, in the oil industry, who spoke with reporters in Abuja, said the hike in fuel prices next year was “inevitable.” The sources who pleaded on anonimity because they were not authorised to speak on the matter, said Nigerians should prepare for the new price regime. One of the sources said government was considering two options in 2013.

He said, “It is either the current fuel scarcity continues or the government embarks on another partial deregulation, leading to another price increase.

“But from all indications, the government will go for the second option. Another price increase is inevitable in 2013.”

It would be recalled that the Nigerian government had in January hiked the pump price of petrol from N65 to N141 but was forced to reduce the price to N97, following mass protests organised by civil society groups.

Meanwhile, civil society groups have told the Nigerian Federal Government to expect the mother of all strikes if subsidy is removed.

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President Jonathan Presents 2013 Budget Of N4.92 Trillion To National Assembly

President Goodluck Jonathan, today, presented a total expenditure of N4.92 trillion for the 2013 fiscal year before a joint session of the National Assembly, in Abuja. In the budget proposal, recurrent expenditure was put at N2.41 trillion while N1.54 trillion will be spent on capital projects.

Some key allocations in the budget proposal include:

Works – N183.5 billion;

Power – N74.26 billion;

Education – N426.53 billion;

Health – N279.23 billion;

Defence – N348.91 billion;

Police – N319.65 billion;

Agriculture & Rural Development – N81.41 billion.

One question; Why Do We Still Have A Budget With Recurrent Expenditure Higher Than Capital Budget?

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A Total Of N5Billion Illegal Bank Charges Returned To Customers - CBN

The Central Bank of Nigeria has said that it has recovered and returned to customers a total of N5bn wrongfully taken from depositors by banks operating in the country. It also said it would focus on the protection of consumers of products being brought to the market by banks over the next three years,.

The Deputy Governor, Financial Services, CBN, Dr. Kingsley Moghalu, told the Senate Committee on Banking, Insurance and other Financial Institutions on Tuesday, that there had been a crisis of confidence between banks and their customers regarding charges on deposits.

He said, “In the next few years, between now and 2015, we will be focusing on consumer protection. There are ranges of bank charges that are acceptable.

“As I speak to you, we have recovered from the banks N5bn as wrong charges, which have been returned to Nigerians.”

He said CBN was also focusing on data integrity from the banks, financial stability, disclosure, transparency, corporate governance and risk management. Moghalu said that although some stability had been achieved as a result of the reforms in the banking sector, CBN was taking measures to ensure that the gains of the reforms were not reversed. He justified a recent circular that put embargo on further lending to bank debtors, who owed about $5bn, saying there were indications that financial indiscipline was rearing its ugly head again.

“They will not be allowed to borrow until they start paying their debts. This is to ensure that the gains from the reforms were not reversed,” he said.

Moghalu also explained the economics of high interest rates, arguing that it was necessary to keep inflation at a stable rate, while sustaining the value of the naira.

According to him, the reforms are not a destination, but a process that will continue so as to save the country from the effects of the global financial crisis. The committee sought clarifications on the various intervention funds operated by the CBN, expressing concerns that the agriculture sector was receiving little of the funds, in spite of the fact that it was crucial to the national economy. Moghalu, however, explained that the intervention funds were meant to stimulate the economy and mop up excess liquidity.

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Obasanjo Is A Good Farmer But A Bad Economist - Sanusi

The governor of the Central Bank of Nigeria (CBN), Sanusi Lamido on Tuesday reacted to a statement credited to a former President, Olusegun Obasanjo, who said that the planned introduction of the N5000 note will increase inflation in the country. Mr Obasanjo had on Thursday said the introduction of the N5000 note would kill production and affect small businesses negatively. The former president, who disclosed this at a roundtable advocacy forum organised by the Institute of Directors, in Lagos, said the way, Mr Sanusi, was fighting inflation by removing money from circulation was improper.

However, speaking at the sixth annual conference of the Chartered Institute of Bankers of Nigeria, Mr Sanusi said Mr Obasanjo had introduced more high denomination in Nigeria than any other Head of State. “General Obasanjo did N20; he did N100, N200, N500 and N1000. He has introduced more higher denomination than any Head of States,” Mr Sanusi said. The CBN governor said that during the period Mr Obasanjo was introducing high denomination inflation in Nigeria was actually low.

“General Obasanjo did N100 in 1999; then he did N200 in 2000; he did N500 I think two years later; and did N1000. In that period, inflation was coming down because it was accompanied by very tight monetary and fiscal policies during his reforms. “For somebody who have gone through that to come and stand up and say ‘introducing a higher denomination causes inflation’ I don’t know if somebody wrote his speech. I’m trying to see him or if he was misquoted.

“If he actually said that then he must be the single most important determinant of inflation in our history given the number of notes that he introduced,” he said Mr Sanusi said printing higher denomination without increasing the money supply in the economy will not increase inflation. “This is simple economics,” he said.

He said that the cost of printing and minting all denomination of currency in 2009 was N47 billion and that by 2011 the CBN brought this cost down to N32 billion. He said that by 2014 the cost would further be reduced to N25 billion thereby saving about 50 percent of the total cost of printing and minting all denomination of currency.

Mr Sanusi said the N5000 note would not cost more than N3 billion to print.

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"Nigeria Is World's Next Major Economic Giant" - President Obama

The President of the United States of America, Senator Barrack Obama has declared Nigeria as the world's next economic success story, stressing that the discovery was one of the major reasons why his government is committed to helping the country build strong democratic institutions and as well remove constraints to trade and investment through the African Growth and Opportunity.



Making this declaration at the ongoing US-Nigeria Trade and Investment Forum, an event organised by the Nigerians in Diaspora Organisation (NIDOA) in Washington DC, on Sunday, President Obama who was represented by Ambassador Eunice Reddick, a top official of the US Department, said that his country expanded opportunities for Nigeria to effectively access its neighbor's market, and diversify its economy beyond a narrow reliance on natural resources as a result of the discovery that the West African nation will emerge as the world' next economic giant.

"As we support these efforts, the Diaspora can play an important role in contributing to a strong, vibrant, and economically prosperous Nigeria" he noted.

President Obama pressed further that his country invests in Nigeria's success because it recognizes Nigeria-s as a strategic center of gravity, stressing that the country's success will as well be Africa's success if the US can help Nigeria chart a secured, prosperous, and democratic course.

The US leader also make it known that his government will encourage Nigeria in the area of private investment in the power sector as well as other sectors to help seal the promise of growth and opportunity for all Nigerians.

He continued that the US government will also work to strengthen Nigeria's agricultural sector, which employs nearly 70 percent of the country's population, by encouraging improvements to infrastructure that would facilitate agricultural growth.

He also said that his government will help Nigeria to iberalize trade policies to foster regional trade, reform the customs system to bring it in line with global best practices, and as well encourage policy reforms to enable private investment in agriculture.

Speaking on the US-Nigeria Bi-National agreement, Obama said that the joint Commission has grown into a forum for frank, high-level concersations, in which both nations have seen substantial reforms and mutually reinforcing initiatives implemented in Nigeria.

His words: "Some key outcomes of the Binational Commission so far have been successful integration of civil society into the electoral process prior to the 2011 elections, sustained and elevated dialogue with energy sector officials on energy policy, reforms to increase investment, and agreement to support the development of a civil affairs training center in the coming year"

"Energy and Investment, the subject of one of the four working groups of the Binational Commission, is critical to Nigeria-s present and future"

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