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Looking Beyond Oil Price Collapse Towards Post Recovery Savings (Part 1)

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By Austin Okere

The recurrent mistake we keep making as a Nation is failing to anticipate and plan for our oil windfalls.

There have been many boom opportunities since Nigeria joined the Organisation of Petroleum Exporting Countries (OPEC) in 1971; Oil prices increased by 400% in six short months after the Yom Kippur War following the Arab Oil Embargo. Crude prices doubled from $14 in 1978 to $35 per barrel in 1981 following the Iran/Iraq war.

The price of crude oil spiked in 1990 with the uncertainties associated the Iraqi invasion of Kuwait and the ensuring Gulf War – the so called ‘Gulf War windfall’ under then Head of State Ibrahim Babangida. Data from the U.S. Energy Information Administration shows that the latest windfall happened between February 2011 and August 2014, under the Goodluck Jonathan presidency, when oil prices were much in excess of $100 per barrel.

Another golden opportunity was squandered, characterised by organised kleptocracy of epic proportions as has now come to light.

During this same period Saudi Arabia has amassed a whopping $593b in foreign exchange reserves and has recently announced that it is creating a $2 trillion mega-sovereign wealth fund, funded by sales of current petroleum industry assets, to prepare itself for an age when oil no longer dominates the global economy.

Coming closer home, Algeria, the second biggest African oil producer, with 1.9mbpd has accumulated foreign reserves of $156b and a sovereign wealth fund of $50b.

Nigeria, by far the biggest producer in Africa with 2.5mbpd has only managed foreign reserves of $28b and a sovereign wealth fund of a paltry $2.9b – about 5% that of Algeria.

The major difference between them is that while the Algerians saved for a rainy day during the boom years, Nigeria was busy squandering her wealth, with nothing to show by way of infrastructure or any solid investments.

Yet Nigeria was able to balance her budget, pay off her debts and save over $62b in foreign reserves during the Obasanjo presidency from 1999 to 2007, even though the price of crude was mostly under $40 per barrel, except for the two years between 2005 and 2007 when it hovered between $50 and $75 dollars per barrel.

It is bothersome that with the same level of oil price, Nigeria today is struggling to balance her budget and has resorted to aggressive borrowing to finance the deficit, inadvertently driving us back to where we were before escaping from the huge burden of sovereign debt and the attendant debilitating impact of debt servicing.

I believe that Nigeria can save as much as $36.5b in the coming year if oil prices recover towards the end of 2016 and through 2017 to the projected $80 per barrel.

This assumes we have all agreed that the current crisis is much too painful and too precious to waste.

It can actually be a blessing in disguise, affording us the much needed leverage to deliberately diversify our economy away from the over dependence on oil, and attempt to become self-sufficient in every low hanging opportunity such as feeding ourselves.

There is a reason why the Chinese use the same word for challenge and opportunity; behind every challenge is an opportunity.

We must seize this golden opportunity with both hands and make the structural changes that will lead us to true prosperity as a nation.

Almost every third Nigerian businessman you come across claims to be into Oil and Gas; usually, briefcase contractors who manage to have their ‘papers’ stamped, and proceed to collect money from the treasury of our commonwealth. Yet oil contributed only 6.4% to GDP growth in 2015.

An often overlooked area for rapid economic growth is telecoms, entertainment and media.

At a recent event in Lagos, Dr. Doyin Salami, lecturer at Lagos Business School, remarked that ‘The telecommunication sector grew Nigeria’s GDP by 8.7% in 2015, generating spill overs, with uptakes in financial transactions technology and payment systems, e-commerce facilitation and proliferation of transport services, while making the offering of the burgeoning entertainment industry ubiquitous’.

Quite simply, if each of the 34 million MSME’s in Nigeria could be supported with technology to improve their businesses through online presence and seamless bookkeeping to the point of employing one more staff, they would create an additional 34 million jobs, much more than the government can ever provide.

I totally agree with Dr. Salami that Nigeria’s economy has systematically and strategically diversified along the lines of technology and other services sector without Nigerians noticing.

The services sector today contributes as much as 52% of Nigeria’s GDP.

Agriculture is also another sector that could do with special attention. If we strive to produce what we eat, we will not only be saving a whopping $6b from our import bill, but also provide the opportunity for inclusive growth, with the spill over effects down the value chain, from logistics and transportation to light manufacturing.

But we need to make the right investments in infrastructure such as roads and rail transport linking farms with their food processors and markets.

The change that will make all this happen is not the ‘outsourced variety’ where we believe that we can carry on with business as usual, or sit back and fold our arms while only the President delivers the promised change. All hands must be on deck, and we each have to be the change we desire.

 

Austin Okere is the Founder CWG Plc and Entrepreneur in Residence, Columbia Business School, New York. He also serves on the World Economic Forum Business Council on Innovation and Intrapreneurship.


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Zinox Demands Apology from Falana over Alleged Defamation, Reputational Damage

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Management of Zinox Technologies Limited, foremost African digital conglomerate, has demanded public apology from Mr. Femi Falana SAN, over alleged defamation and reputational injury inflicted on the company and its representatives by Falana and his client, Benjamin Joseph, the CEO of Citadel Oracle Concept Limited, an Ibadan-based computer firm.

Zinox Demands Apology from Falana over Alleged Defamation, Reputational Damage

 

In a statement on Sunday, Zinox referenced recent news items in the media relating to certain charges filed by  Falana, purporting to act on a fiat donated to him by Mr. Lateef Fagbemi SAN, attorney general and minister of Justice of the Federal Republic of Nigeria, whom Zinox said may not have been properly briefed.

“We are sure that if the circumstances of this case were made available to the respected Honorable Attorney General, Lateef Fagbemi SAN, he would not have granted the purported fiat to Femi Falana,” Zinox said in the statement.

In the news reports, Falana was said to have filed a suit before Honorable Justice A. O. Ebong of the FCT High Court in charge no. FCT/HC/CR/985/24 in November 2024, a suit Zinox said was based on the same claims which various courts had in the past dismissed as falsehood and baseless.

“Our initial reaction was to ignore these publications as the usual campaigns of calumny that have been orchestrated against Zinox since 2014 by one Mr. Benjamin Joseph, the Managing Director of Citadel Oracle Concept Ltd, the client of Mr. Femi Falana SAN. However, we are persuaded to respond by the consideration that once falsehood is sustained over time, it tends to acquire the garb of truth.”

Zinox said the case arose from a contract between Citadel and Technology Distributions Limited over the supply of computers to the Federal Inland Revenue Service (FIRS), stressing that the matter has no bearing whatsoever with Zinox and its promoter, Mr Leo Stan Ekeh.

“Firstly, we are shocked that Femi Falana would include Zinox in his purported fiat/charges, a company that has nothing to do with the transaction or allegations. For the records, we want to state as follows:

“Zinox has never been invited by any investigative agency, including the police and the EFCC, on these allegations. There is no report either by the police or the EFCC or any investigative agency where the name of Zinox was mentioned as a suspect. There is no judgment or ruling of any court where Zinox was mentioned as having anything to do, whatsoever, with the transaction or the allegations, the basis of the fiat/charges. Mr. Leo Stan Ekeh, the Chairman of Zinox, has never made any statement to the police in the course of any investigations and has never been mentioned in any court proceedings or judgment as part of any investigations relating to these allegations. Indeed, he has never met with Benjamin Joseph before,” the statement said.

Zinox cited instances in which Mr. Joseph lost the case and its adjunct suit. In a petition/case Mr. Joseph reported since 2013 and for which the Inspector General of Police charged him for false information in charge no.CR/216/16, he was unable to prove his allegations for more than 8 years .

In another case filed by the EFCC at his instance against his partner, Princess Kama, in charge no. FCT/HC/CR/244/2018,  Honorable Justice Danlami Z. Senchi of the FCT High Court (as he then was), dismissed as false all the allegations made by Benjamin Joseph, and imposed the sum of N20 million as damages against him for false petitioning in relation to these same allegations.

Zinox alleged that the current charges said to have been filed by Falana on the basis of a fiat from the Attorney General is the third in a row as he had earlier filed charge no.CR/469/2022, which was struck out by Honorable Justice C. O. Oba of the FCT High Court, by an order dated 8th November 2022.

In what appears to be forum shopping and abuse of court process, “he filed the same charges before Honorable Justice A. S. Adepoju of the FCT High Court, which charges were, once more, struck out by the Honorable Court on 19th March 2024, with Honorable Justice Adepoju holding that: “This matter was brought in dead, extinct and should be confined into the dustbin of history…I hold that the instant suit is an abuse of the process of court and it is hereby struck out accordingly,” the statement said.

Zinox said it was shocked that a “learned Senior Advocate in the person of Femi Falana, would, yet, proceed to file the same charges before Honorable Justice A. O. Ebong of the FCT High Court in charge no. FCT/HC/CR/985/24 in November 2024.”

The statement said: “It is, therefore, very clear that the deliberate intention for instituting this new charge by Femi Falana SAN, to include the name of Zinox and its Chairman and other persons who were never part of the investigations, is to embarrass them, harm their reputation, and thereby damage their businesses. In the circumstance, we hereby demand a public apology from Mr. Femi Falana SAN, if he is unable to produce the evidence demanded above.

“We, therefore, assure all our business partners, stakeholders, and friends, that we are not ruffled by these spurious allegations. While our lawyers are set to defend the present charges purportedly filed by Femi Falana SAN, we shall not fail to explore all legal remedies against persons associated with the orchestration of these false allegations and publications against us,” Zinox said.

 


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WHO Declares New COVID Outbreak in China Global Health Emergency

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World Health Organization (WHO), has declared the outbreak of a new coronavirus in China, a global health emergency.

WHO Declares New COVID Outbreak in China Global Health Emergency

Tedros Ghebreyesus, director-general, WHO, made the announcement at a press conference in Geneva.

WHO’s emergency committee on the epidemic had reportedly met Thursday afternoon and recommended designating the outbreak a Public Health Emergency of International Concern, PHEIC.

The decision had been “almost unanimous,” Didier Houssin, chair of the emergency committee, said at the press conference.

“The main reason for this declaration is not because of what is happening in China, but because of what is happening in other countries,” Tedros said at the press conference.

“Our greatest concern is the potential for the virus to spread to countries with weaker health systems and which are ill-prepared to deal with it. Let me be clear, this declaration is not a vote of no confidence in China. On the contrary, WHO continues to have confidence in China’s capacity to control the outbreak.”

Tedros also outlined recommendations made by the emergency committee to control the outbreak, including accelerating the development of vaccines and drugs and combatting the spread of misinformation.

This is the sixth time WHO has used that label, Public Health Emergency of International Concern, PHEIC. since the designation was introduced 15 years ago.


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SpaceX Announces Starship’s First Satellite Deployment Test

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SpaceX at the weekend announced that it is gearing up for a significant milestone in the development of its Starship rocket, with an upcoming test flight set to include the deployment of 10 model Starlink satellites.

SpaceX Announces Starship’s First Satellite Deployment Test

This mission, planned for later this month, marks Starship’s first attempt to release payloads in space, a crucial demonstration of its future capabilities in the satellite launch market.

The test flight will take place from SpaceX’s expansive Boca Chica, Texas facilities and is expected to showcase Starship’s ability to deploy payloads similar in size and weight to the next-generation Starlink satellites.

According to SpaceX, while in space, the rocket will deploy 10 Starlink simulators, marking the initial exercise in a satellite deployment mission for Starship.

This test flight is the latest in a series of “test-to-failure” launches, a key part of SpaceX’s approach to rocket development.

Each flight incorporates new upgrades, with engineers testing the capabilities and performance of the rocket in real-world conditions.

Starship’s previous tests have focused on improving various components, including the Super Heavy first-stage booster, which made headlines in October for returning to its launch pad’s massive mechanical arms for the first time.

This was a major step towards achieving a fully reusable rocket system.

In November, the sixth Starship test flight achieved several important objectives, although the Super Heavy booster was forced to target a water landing in the Gulf of Mexico due to a launch pad issue. Despite this, the flight demonstrated the rocket’s potential, and the Starship program continues to make significant strides toward meeting its ambitious goals.

Starship’s power and reusability make it central to SpaceX’s future plans, and but it is also crucial to Elon Musk’s vision of colonising Mars.

Beyond its commercial applications, Starship also plays a pivotal role in NASA’s Artemis programme.

SpaceX is under contract to use Starship to land U.S. astronauts on the moon later this decade, further cementing the rocket’s importance to both commercial and government missions.

As SpaceX prepares for its upcoming test flight, the company’s advancements with Starship are not only pushing the boundaries of space exploration but also setting the stage for a new era in satellite launches, internet connectivity, and human space travel.


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