Which one is a better business model?

Scenario A: You raise and spend $10 billion to build a semiconductor foundry. In that foundry, you only fabricate your own internally designed microchips. You do this in a world with Nvidia, ARM, AMD, ADI, TI, Qualcomm, etc. Simply, you cannot expect to have a winning design across generations of microprocessors and broad integrated circuits.

Scenario B: You raise that $10 billion and instead of just focusing on your own internal designs, you open it up for every designer. Yes, fabless chip designers (practically everyone) can access that foundry.

Scenario B is a better business model. Simply, every winner is your customer and the pressure to win a generation does not matter since if you can win many of the fabless customers, they will have enough products to keep that foundry busy. Scenario A is a bad strategy in a knowledge world because if you do not make the hit design internally, that foundry has nothing to do. Statistically, you have a higher chance of finding a winner in Scenario B than in A.

People, the future of Intel brightens because it has moved into Scenario B: “Intel announced Monday that it has landed a key client, electronics chip designer MediaTek, as part of its early push into offering semiconductor manufacturing services to other companies”.

As Intel moves into this redesign, other leading contract chip manufacturers like TSMC (Taiwan) and Samsung Electronics (South Korea) will see asymmetric competitive attacks. Both Taiwan and Samsung are under the crosshairs of geopolitical paralysis as China and North Korea bark respectively. 

In other words, if bad things happen, TSMC or Samsung will be off market, cutting out chips and rattling the world since microchips power our world. Who will use them when you have the new Intel?

The Central Bank of Nigeria (CBN) is clearly losing the fight to save the naira from total collapse. The naira dropped to N670/$1 in the parallel market on Tuesday, compounding Nigeria’s inflation.

The apex bank has blamed the naira’s ordeal on many things, including people. But it has also taken measures to prevent it from falling to the ground. One of the measures is the eNaira – a central bank digital currency (CDBC) launched after the CBN banned financial institutions from carrying out cryptocurrency transactions because it is sabotaging the naira.

But like every other measure that has been taken by the financial regulator to protect the naira, the eNaira has failed to live up to expectations – and like in every other case of its failures, the CBN has someone to blame.

Last week, the CBN governor, Godwin Emefiele attributed the eNaira’s failure to “apathy” by bankers who are doing their best to discourage their customers from using the app.

Following the launch of the eNaira in October, Emefiele admitted that it will pose a threat to traditional banking as it requires banks’ customers moving funds from their bank accounts to their eNaira digital wallets.

Though the digital currency recorded over 700,000 downloads in its first quarter, it has failed to maintain the momentum – undermining its purpose.

After blaming the apathy on banks, Emefiele admitted that there is a need for more enlightenment for the eNaira. He thus urged Nigerians to download the app and also transfer funds from their bank accounts into their wallets.

“There may be a little bit resistance to you from the banks. This is because moving that money from your account into your wallet is a disadvantage to the banks. I want to say so boldly and bluntly. It is a disadvantage to them. I will say very bluntly, because I am a banker myself, there is apathy by the banks because they know that they will lose some income if you insist on using your eNaira wallet for transactions,” Emefiele said.

Urging Nigerians to embrace the CBDC, he added that using the enaira “is almost costless at least till today. So you should go and tell your bank that you want your account to be linked to your wallet. It will cost you little or nothing compared to those other products that you have that would cost you money in the bank.”

However, Emefiele announced the new steps the CBN is taking to promote the eNaira. He said the apex bank is working with MTN Nigeria to activate the use of USSD code for eNaira transactions in the country. In addition, he disclosed that the CBN in conjunction with the Bankers Committee will be ramping up its enlightenment programmes to increase sustained awareness on the eNaira.

“We have been focused up till now on the banked population. We are almost completing tests with MTN to provide a channel where the unbanked can onboard using the code *997#. We believe that once this is done, we are going to be targeting the unbanked population. And we are also going to be using agency banking arrangements available and other means to ensure that we drive our enaira product.

“I must say that the eNaira is the product that has the lowest cost in terms of you moving money electronically from one location to another location. Today I am aware that people are now using the eNaira on Remita.net to make purchases. You can make payment for DSTV using the eNaira you can pay government bills. You can buy airtime and you can conduct a host of other transactions through the eNaira at the lowest possible cost,” he said.

However, experts believe that publicity will not change the situation because apathy toward the eNaira stems from many factors but particularly, the value of the naira.

Last week, Emefiele warned Nigerians to desist from using the naira to buy dollar, threatening to prosecute anyone found doing so. The warning, which came disappointing to Nigerians who are already tired of the apex bank’s blame game, signals growing apathy toward the naira itself.

With the naira rapidly heading toward N700/$1, Nigerians are converting their savings to dollars to preserve its value.

Following the 2022/2023 Unified Tertiary Matriculation Examinations (UTME) which recorded that 378,639 candidates of the total 1,761,338 candidates who wrote the exam scored 200 marks and above, the Joint Admission Matriculation Board (JAMB) on 21 July announced 140 marks as the national minimum cut-off for the 2022 university admission exercise and 100 marks for admission into polytechnics and colleges of education in the same year.

The decision of JAMB has since left many Nigerians wondering about the current state of education in the country. Some also wonder if the UTME gets tougher on a year-on-year basis considering how JAMB gets to reduce its cut-off mark every year. Between 2007 and 2022, JAMB has reduced the University’s admission cut-off mark from a minimum of 200 which is the average score of the overall 400 to as low as 120. The 2017/2018 UTME has the lowest cut-off mark of 120 since 2007.

Another important factor that is often used by the public to appraise the state of the nation’s education at the post secondary level is the incidence of strike by the Academic Staff Union of Universities (ASUU). Almost every year ASUU goes on strike, causing disruption in the academic calendar and a deferment in the programs’ duration. During ASUU strike, students are expected to leave the school premises as all academic activities are put on a halt. Since 2007, the Academic Staff Union of Universities has embarked on a total of 143 weeks of strike in ten academic sessions.

When schools are in session, some of the UTME candidates visit their schools of choice for guidance and counselling at the schools’ admissions units, some candidates also get the opportunity to be tutored by University students who take up part-time teaching jobs, and some others get to use Universities facilities to prepare for their UTME through the assistance of friends, families or mentors who are registered students or workers in their chosen schools. All of these are expected to provide an enabling environment for UTME candidates to excel in their exams. Therefore, the primary assumption of this analysis is that the incidence of ASUU strike has a significant impact on the UTME performance.

Thus, we examined a link between the incidence of ASUU strike and performance in the UTME every year, using the JAMB cut-off mark as a baseline performance in the UTME dependent on the ASUU strike.

With 143 weeks cases of ASUU strike since 2007, a regression analysis shows that the incidence of ASUU strike is not associated with performance in the UTME from 2007 to 2022 admission year. The cases of strike only have 1.9 percent impact on UTME performance at p>0.05, which implies that the industrial action does not have a significant impact on the year-on-year decrease in performance in the UTME.

It is also observed that the 2017/2018 admission year which has the lowest UTME cut-off mark since 2007 recorded no strike by ASUU, whereas the 2020/2021 admission year which recorded the highest strike of 40 weeks has a minimum cut-off of 160 marks.

However, while we cannot pinpoint a convincing statistical link of the ASUU strike and the UTME performance, we were able to determine that the UTME baseline performance has continued to reduce year-on-year since 2007. After dropping from 200 marks in the 2007/2008 to 170 marks in the subsequent year, it increased to 180 marks in the 2009/2010 admission year which was maintained till 2017/2018 admissions exercise when it dropped sharply to 120 marks. The UTME cut-off mark again increased from 140 marks in 2018 to 160 marks in 2019 which was maintained till it reverted to 140 marks in the current 2022/2023 admission year.

The perception and assumption of the impact of ASUU strike extends beyond performance of candidates at the UTME. The intermittent ASUU strike is also believed to have ripple effect on the local economy. Professor Ndubuisi Ekekwe, the lead faculty at Tekedia institute and writer at the Harvard Business Review put this in good perspective when he said the following:

When students are in town, okada boys have jobs, mama put has buyers etc. In short every student could be contributing at least N1000 to the local economy (food, N800 and transport N200). Multiply this conservative N1000 by tens of thousands of students, workers and associate, you will see why every community wants a university. Withstrikes, those opportunities dry up.

It is suggested that the Nigerian government, the Academic Staff Union of Universities and other relevant stakeholders should in all sincerity work together to reach a comfortable financial structure for all parties to put an end to the incessant industrial actions that has continued to disrupt academic activities in the school and by extension economic activities in the country.

Rather than reduce admission standard every year, JAMB in conjunction with the Federal Government through the ministry of education should look inward to provide a lasting solution to the University/Polytechnic/College discrimination which has continued to add to university admission pressure every year.