Today, the Governor of Abia State, Dr Alex Otti, appoints Prof Ndubuisi Ekekwe, His Highness Muhammad Sanusi II (14th Emir of Kano), Dr. Ngozi Okonjo-Iweala (DG – WTO), and other eminent citizens as members of Abia Global Economic Advisory Council (AGEAC). The grand vision is to help Abia State become a preferred investment destination in Africa, and in the process transform the state, Nigeria and Africa, through entrepreneurial capitalism which will deliver the “rise of all” with shared prosperity and opportunity. 

The Council is currently being inaugurated in the main banquet in Umuahia. I am honoured for this Call to Serve by my fellow citizens.  Nigeria must move forward and Abia will play its own roles.

Press release below…

PRESS RELEASE:.

INAUGURATION OF THE ABIA STATE GLOBAL ECONOMIC ADVISORY COUNCIL.

Abia State Governor, Dr. Alex Otti, OFR, has announced the constitution of the Abia Global Economic Advisory Council (AGEAC) as part of his administration’s strategic plan to ensure the overall economic development of the state.

Consequently, Governor Otti has appointed 18 distinguished Nigerians with global acclaim to serve on the Council, aimed at building Abia into a self-sustaining economic hub.

Those appointed are:

1. Ms. Arunma Oteh, OON – Co-Chair
2. His Highness Khaleefa Muhammad Sanusi II, CON,  Co-Chair
3. Mr. Bolaji Balogun – Co-Chair
4. Mr. Victor Onyenkpa – Member
5. Mrs. Ifueko Omoigui Okauru, MFR – Member
6. Mr. Chidi Ajaegbu  – Member
7. Mr. Uche Orji – Member
8. Mrs. Ndidi Nwuneli , MFR – Member
9. Mr. Chika Nwobi – Member
10. Dr. Olugbenga Adesida – Member
11. Prof. Ndubuisi Ekekwe – Member
12. Mazi Clement Owunna, MFR – Member
13. Dr. Uzodinma Iweala – Member
14. Mrs. Ezinwa Okoroafor – Member
15. Mr. George Agu – Member
16. Mazi Uzo Nwankwo – Member
17. Mr Chinedu Azodoh – Member
18. Dr. Ngozi Okonjo-Iweala, GCON – Honourary Advisor
19. Dr. Benedict Oramah, CON – Honourary Advisor

Also, five members, drawn from the State Executive Council, will represent the government on the Advisory Council. 

They include the Governor, Dr. Alex  Otti; OFR, the  Attorney-General and Honourable Commissioner for Justice, Mr Ikechukwu Uwanna; Honourable Commissioner for Budget and Planning, Mr. Kingsley Anosike; Honourable Commissioner for Finance, Mr Michael Akpara; and the Honourable Commissioner for Trade, Commerce and Industry, Dr. Chimezie Isaac Ukaegbu. 

A statement issued Tuesday by the Governor’s Office said the economy of Abia State had suffered neglect and became fragile due to untold economic sabotage, over the years. 

However, with the inception of Governor Otti’s administration on May 29, 2023, the government has since commenced the socio-economic re-engineering of the State from the wreckage of over the last two decades. 

“Our programmes are already re-positioning and rebuilding Abia State as the economic pride of Nigeria. Therefore, it is essential to ensure that its economic development strategy is founded not only on a thorough understanding of the local economic environment but also on the dynamics of the emerging forces now shaping the future of the global economy.

“The newly appointed members bring a wealth of experience and expertise in various sectors, enhancing the diversity and dynamism of the Abia State Global Economic Advisory Council. Their collective knowledge will play a pivotal role in shaping policies that drive innovation, attract investments, form solid partnerships, and ensure the overall economic resilience of our great state,” the statement declared. 

According to the statement, the Secretariat of the Council will be managed by Mr. Chinenye Mba-Uzoukwu, Principal Secretary to the Governor/Chief Strategy Officer, and Mr. Charles Egonye, Technical Assistant to the Governor, and supported by Mrs Victoria Onwubiko and Ms Amaka Okonkwo from the private sector.

The Abia State Global Economic Advisory Council serves as a key advisory body, offering strategic insights and recommendations to guide the state’s economic and investment policies. The Advisers will collaborate closely with the relevant State Commissioners to address the unique challenges and opportunities that lie ahead, ensuring that Abia State remains at the forefront of innovation and economic development within the region and globally.

SIGNED:

Kazie Uko 

Chief Press Secretary to the Governor Abia State 

Government House, Umuahia.

Free market capitalism and trade is the only way to end hunger and poverty across our planet, the empirical evidence is unquestionable” – Javier Milei.

The renowned economist and president of Argentina, Javier Milei delivered a powerful speech at the World Economic Forum, where he defended the virtues of free market capitalism and trade as the most effective solutions to end hunger and poverty in the world. He argued that the free-market system allows for the efficient allocation of resources, the promotion of innovation and entrepreneurship, and the creation of wealth and prosperity for all.

He also criticized the interventionist policies of governments and international organizations, which he claimed only create more problems and distortions in the economy. He said that these policies are based on false premises and ideologies, and that they ignore the empirical evidence that shows the benefits of economic freedom and openness. He cited several examples of countries that have achieved remarkable economic and social progress by embracing free market reforms, such as Singapore, Hong Kong, Taiwan, South Korea, Chile, Estonia, and others.

He contrasted them with countries that have suffered from stagnation, corruption, inflation, and misery by following socialist or populist agendas, such as Venezuela, Cuba, Argentina, Zimbabwe, and others. He concluded his speech by calling for a global movement to spread the ideas of liberty and free enterprise, and to challenge the status quo of interventionism and collectivism. He said that this is the only way to ensure a better future for humanity, and to end hunger and poverty across our planet.

This is the bold claim made by Javier Milei, a prominent economist and libertarian activist from Argentina, in his latest book “The Moral Case for Capitalism”. Milei argues that capitalism is not only the most efficient and productive economic system, but also the most ethical and humane one. He cites numerous examples of how free markets and trade have lifted millions of people out of poverty, improved living standards, increased life expectancy, and reduced violence and corruption.

He also challenges the common criticisms of capitalism, such as inequality, exploitation, environmental degradation, and cultural imperialism. He contends that these are not inherent flaws of capitalism, but rather the consequences of government intervention, regulation, and distortion of the market.

Milei’s book is a provocative and passionate defense of capitalism, based on both empirical data and moral philosophy. He draws on the works of classical liberals such as Adam Smith, John Locke, and Ludwig von Mises, as well as contemporary thinkers such as Milton Friedman, Ayn Rand, and Robert Nozick. He also engages with the arguments of his opponents, such as Karl Marx, John Maynard Keynes, and Thomas Piketty. He does not shy away from controversial topics, such as immigration, globalization, democracy, and human rights. He presents his views with clarity, logic, and conviction, while also acknowledging the limitations and challenges of his position.

Milei’s book is not for the faint-hearted or the easily offended. It is a radical and uncompromising manifesto for capitalism, that challenges the prevailing orthodoxy and conventional wisdom. It is a book that will make you think, question, and debate. Whether you agree or disagree with Milei’s thesis, you will not be indifferent to his message.

Sovereign-debt crisis is a big issue facing Africa

Africa is facing a looming debt crisis that threatens to derail its economic and social progress. According to the World Bank, the continent’s public debt-to-GDP ratio rose from 40% in 2018 to 70% in 2020 and is projected to reach 75% by 2022. The COVID-19 pandemic has exacerbated the situation, as many African countries have had to borrow more to cope with the health and economic shocks.

The main drivers of the debt crisis are the high cost of borrowing, the low revenue mobilization, and the weak governance and institutional capacity. Many African countries rely on external financing from bilateral and multilateral creditors, as well as private lenders.

However, these sources of funding are often expensive and come with stringent conditions that limit the policy space and fiscal flexibility of the borrowers. Moreover, some of the loans are not transparent or accountable, and may be used for unproductive or corrupt purposes.

The consequences of the debt crisis are severe and far-reaching. If not addressed, it could lead to a loss of market access, a deterioration of credit ratings, a reduction of public spending, a depletion of foreign reserves, and a default or restructuring of debt obligations. This would have negative impacts on growth, poverty reduction, human development, and regional stability. It would also undermine the efforts to achieve the Sustainable Development Goals and the African Union’s Agenda 2063.

To support this argument with more data, here are some relevant statistics:

The average interest rate on public debt in sub-Saharan Africa increased from 4% in 2013 to 7% in 2019. The average tax-to-GDP ratio in sub-Saharan Africa was 16.5% in 2018, well below the global average of 24.9%. The average governance score for sub-Saharan Africa declined from 0.47 in 2013 to 0.44 in 2019 (on a scale of -2.5 to 2.5). The total external debt stock of sub-Saharan Africa increased from $236 billion in 2010 to $583 billion in 2019. The share of private creditors in sub-Saharan Africa’s external debt increased from 25% in 2010 to 39% in 2019.

To avoid a debt crisis, African countries need to adopt a comprehensive and coordinated approach that involves both domestic and external actors. On the domestic front, they need to enhance their debt management capacity, improve their revenue collection, rationalize their expenditure, diversify their economies, and strengthen their governance and anti-corruption frameworks.

On the external front, they need to seek more concessional and flexible financing options, negotiate for debt relief or restructuring where necessary, and participate in global initiatives such as the G20 Debt Service Suspension Initiative and the Common Framework for Debt Treatments.

The debt crisis is not inevitable, but it requires urgent and decisive action from all stakeholders. Africa has the potential to overcome this challenge and achieve its development aspirations, but it needs the support and solidarity of its partners. Together, we can build a more resilient and prosperous continent for the benefit of all.

Nigeria’s FX challenge is a moving target. Read the World Bank: “Fixed exchange rates and capital controls are diverting remittances from official to unofficial channels… In Nigeria, the Central Bank’s interventions in the foreign exchange market led to an increasing divergence of the parallel and official exchange rates until the liberalization program in June 2023 …However, resistance to the increasing pressure on the Nigerian naira coupled with limited supply of foreign exchange at the official window has led to the reemergence of the parallel market premium. Likely, the substantial parallel market premium has significantly diverted remittances to unofficial channels.” 

That said, we must commend the Central Bank of Nigeria (CBN) for normalizing those “unofficial channels” which include peer-to-peer crypto trading and exchange, when it approved the integration of crypto companies into the Nigerian banking system. I do not believe that “banning” crypto companies is positive for Nigeria. Rather, we just have to put smart regulations to make sure the companies operate in ways that do not destroy our economies.

Fixing Nigeria’s foreign currency paralysis is not likely to happen until we can fix our industries so that things could be made in Nigeria. Until then, everything is pure theory because AO Lawal’s Textbook of Economics for WAEC students made it clear that if demand is increasing when supply is dropping, price will go up. Today, we earn less US dollars even when we are importing more (higher US dollar demand), ceteris paribus, Naira will pay the price and decline, financial engineering or not!

That said, we must acknowledge the efforts the government is putting to address these shortages: “In a significant move to address the foreign exchange crisis, the Central Bank of Nigeria (CBN) has successfully paid approximately $2 billion to various sectors, including manufacturing, aviation, and petroleum, as part of its ongoing efforts to clear the backlog of outstanding foreign exchange liabilities.”

My only concern is that it does not address the root cause (improving balance of payment and trade), since if you borrow to clear, and that clearance is not going to position you to have enough in the future, sooner or later, you will need another borrowing to clear in the future. That vicious circle is where we have been since 2017. That must stop.