The International Monetary Fund (IMF) has once again urged Nigeria to remove fuel subsidies to enable her to tackle the lingering issue of budget deficit and accelerate economic growth.

The IMF issued recommendations in its Article IV consultation with Nigeria, concluded on Jan 31. In addition to fuel subsidies, Article IV recommended that the government further increase the value-added tax rate, improve tax compliance, and rationalize tax incentives.

It also urged Nigeria to take advantage of current rise in oil prices and economic progress from pandemic strains, to have a unified and market-clearing exchange rate that will help strengthen its external position.

While the IMF commended Nigeria for the progress it has recorded in the fight against covid, the financial body noted that the African largest economy will need to put in the same effort to boost revenue-to-GDP ratio, currently among the lowest in the world at 7.5 percent.

Read the assessment below:

The Nigerian economy is recovering from a historic downturn benefiting from government policy support, rising oil prices and international financial assistance. Nigeria exited the recession in 2020Q4 and output rose by 4.1 percent (y-o-y) in the third quarter, with broad-based growth except for the oil sector, which is facing security and technical challenges. Growth is projected at 3 percent for 2021. Headline inflation rose sharply during the pandemic reaching a peak of 18.2 percent y-o-y in March 2021 but has since declined to 15.6 percent in December helped by the new harvest season and opening of land borders. Reported unemployment rates (end 2020) are yet to come down but more recent COVID-19 monthly surveys show employment back at its pre-pandemic level.

Despite the recovery in oil prices, the general government fiscal deficit is projected to widen in 2021 to 5.9 percent of GDP, reflecting implicit fuel subsidies and higher security spending. Moreover, the consolidated government revenue-to-GDP ratio at 7.5 percent remains among the lowest in the world. After registering a historic deficit in 2020, the current account improved in 2021 and gross FX reserves have improved, supported by the IMF’s SDR allocation and Eurobond placements in September 2021.

Notwithstanding the authorities’ proactive approach to contain COVID-19 infection rates and fatalities and the recent growth improvement, socio-economic conditions remain a challenge. Levels of food insecurity have risen and the poverty rate is estimated to have risen during the pandemic.

The outlook faces balanced risks. On the downside, low vaccination rates expose Nigeria to future pandemic waves and new variants, including the ongoing Omicron variant, while higher debt service to government revenues (through higher US interest rates and/or increased borrowing) pose risks for fiscal sustainability. A worsening of violence and insecurity could also derail the recovery. On the upside, the non-oil sector could be stronger, benefitting from its recent growth momentum, supportive credit policies, and higher production from the new Dangote refinery. Nigeria’s ratification of the African Continental Free Trade Agreement could also yield a positive boost to the non-oil sector while oil production could rebound, supported by the more generous terms of the Petroleum Industry Act.

Executive Board Assessment

Executive Directors agreed with the thrust of the staff appraisal. They commended the authorities’ proactive management of the COVID-19 pandemic and its economic impacts. They noted, however, that the outlook remains subject to significant risks, including from the pandemic trajectory, oil price uncertainty, and security challenges. Looking ahead, they emphasized the need for major reforms in the fiscal, exchange rate, trade, and governance areas to lift long-term, inclusive growth.

Directors highlighted the urgency of fiscal consolidation to create policy space and reduce debt sustainability risks. In this regard, they called for significant domestic revenue mobilization, including by further increasing the value-added tax rate, improving tax compliance, and rationalizing tax incentives. Directors also urged the removal of untargeted fuel subsidies, with compensatory measures for the poor and transparent use of saved resources. They stressed the importance of further strengthening social safety nets.

Directors welcomed the removal of the official exchange rate and recommended further measures towards a unified and market-clearing exchange rate to help strengthen Nigeria’s external position, taking advantage of the current favorable conditions. They noted that exchange rate reforms should be accompanied by macroeconomic policies to contain inflation, structural reforms to improve transparency and governance, and clear communications regarding exchange rate policy.

Directors considered it appropriate to maintain a supportive monetary policy in the near term, with continued vigilance against inflation and balance of payments risks. They encouraged the authorities to stand ready to adjust the monetary stance if inflationary pressures increase. Directors recommended strengthening the monetary operational framework over the medium term—focusing on the primacy of price stability—and scaling back the central bank’s quasi-fiscal operations.

Directors welcomed the resilience of the banking sector and the planned expiration of pandemic-related support measures. They agreed that while the newly launched eNaira could help foster financial inclusion and improve the delivery of social assistance, close monitoring of associated risks will be important. They also encouraged further efforts to address deficiencies in the AML/CFT framework. Directors emphasized the need for bold reforms in the trade regime and agricultural sector, as well as investments, to promote diversification and job-rich growth and harness the gains from the African Continental Free Trade Agreement. Improvement in transparency and governance are also crucial for strengthening business confidence and public trust. Directors called for stronger efforts to improve transparency of COVID-19 emergency spending.

Directors noted that Nigeria’s capacity to repay the Fund is adequate. They encouraged addressing data gaps to allow timely and clear assessments of reserve adequacy.

Intel survives as Nvidia calls off the acquisition plan with Arm.

SoftBank and Nvidia have announced their decision to call off efforts to acquire UK-based computing technology company Arm. The deal came to an unfruitful end following lingering scrutiny that has followed the deal since it was conceived.

Arm said it is now exploring a public offering in lieu of the acquisition, pushing for an IPO to happen in the next 12 months.

In December, the Federal Trade Commission (FTC), filed a lawsuit to halt the acquisition following a barrage of petitions from players in the industry. The argument has been that the deal will hurt market competition.

When this deal was announced, I wrote: “Intel has been disintermediated by TSMC with its legendary manufacturing moat dismantled by the global contract chip manufacturer. The implication is that the castle which Intel has protected for decades is largely vulnerable now.

“Nvidia does not build big foundries but focuses on R&D designs while its manufacturing partners make the chips. It is a leader in modern chips for datacenters, gaming, AI and more. If ARM goes to Nvidia, it will pick a huge part of the mobile sector, and if that happens, Intel will bleed for years.”

The biggest winner here is Intel because if Nvidia had been armed by Arm, it would have been an asymmetric attack on Intel. Arm is the hardware operating system for the mobile world, and housing it within Nvidia would have dislocated everything in our modern world. From Microsoft to Sony to Samsung to Tecno to …., Arm has been powering the age of mobile internet. That Arm remains unbounded is the right thing!

Focus on the job done and not papers. If HND does the same job as BSC, pay should be the same. Forget JAMB or title of degree or school. In Microsoft Nigeria, one of their Lead Scientists did not attend any university/poly in Nigeria when Microsoft hired him. This guy is so good that they have relocated him to London out of Lagos. It would be pure wickedness if you still want to pay him WAEC grade.

===press release

SANTA CLARA, Calif., and TOKYO – Feb. 7, 2022 – NVIDIA and SoftBank Group Corp. (“SBG” or “SoftBank”) today announced the termination of the previously announced transaction whereby NVIDIA would acquire Arm Limited (“Arm”) from SBG. The parties agreed to terminate the Agreement because of significant regulatory challenges preventing the consummation of the transaction, despite good faith efforts by the parties. Arm will now start preparations for a public offering.

“Arm has a bright future, and we’ll continue to support them as a proud licensee for decades to come,” said Jensen Huang, founder and chief executive officer of NVIDIA. “Arm is at the center of the important dynamics in computing. Though we won’t be one company, we will partner closely with Arm. The significant investments that Masa has made have positioned Arm to expand the reach of the Arm CPU beyond client computing to supercomputing, cloud, AI and robotics. I expect Arm to be the most important CPU architecture of the next decade.”

SBG today also announced that, in coordination with Arm, it will start preparations for a public offering of Arm within the fiscal year ending March 31, 2023. SBG believes Arm’s technology and intellectual property will continue to be at the center of mobile computing and the development of artificial intelligence.

“Arm is becoming a center of innovation not only in the mobile phone revolution, but also in cloud computing, automotive, the Internet of Things and the metaverse, and has entered its second growth phase,” said Masayoshi Son, Representative Director, Corporate Officer, Chairman & Chief Executive Officer of SoftBank Group Corp. “We will take this opportunity and start preparing to take Arm public, and to make even further progress.”

Mr. Son continued, “I want to thank Jensen and his talented team at NVIDIA for trying to bring together these two great companies and wish them all the success.”

NVIDIA and SBG had announced that they had entered into a definitive agreement, under which NVIDIA would acquire Arm from SoftBank, on September 13, 2020. In accordance with the terms of the agreement, SBG* will retain the $1.25 billion prepaid by NVIDIA, which will be recorded as profit in the fourth quarter, and NVIDIA will retain its 20-year Arm license.

• 24.99% of Arm shares are attributable to SoftBank Vision Fund 1.

The National Universities Commission (NUC) has informed necessary government agencies that two new universities have been created in Lagos state. The schools are Lagos State University of Science and Technology (LASUST) Ikorodu, and Lagos State University of Education (LASUED) Ijanikin.

LASUST came from Lagos State Polytechnic (LASPOTECH) while  LASUED was a concatenation of Adeniran Ogunsanya College of Education (AOCOED) Ijanikin, and Michael Otedola College of Primary Education (MOCPED) Epe.

Did you notice something? Lagos State has weaned itself off colleges of education and polytechnics,  thereby fixing the national paralysis where polytechnic graduates are treated unfairly. This is a very bold call by Governor Sanwo-Olu and one I support 100%.

If Nigeria cannot fix this HND-BSc  dichotomy, the best option is to phase out polytechnics and colleges of education. Lagos State has drawn the first blood, I expect other states to follow. Just like that, we will be out of HND-awarding polytechnics even though the OND levels remain fair.

Simply, there is no need preparing young people only to frustrate their careers because of papers their nation gave them. If HND cannot equal BSc, close all polytechnics or better, convert them to universities! The Americans have translated Nigeria HND qualifications as full degree equivalents even when the nation which awards them does not offer the same blessing.

So, with the Lagos state government phasing out the whole distraction, it is either the National Assembly fixes it or everyone follows the same path. Yes, more universities, no matter the quality. But it is all good as everyone comes with the same paper and can compete from the same starting point.

I experienced this unfairness as a young banker in Lagos. I was put to manage more than 53 people, merely HND and OND graduates. Some of the people I was to supervise had been in the bank before I wrote JAMB. Yet, I was the boss, even though they were teaching me the job! I earned multiples more than them. And I felt that it was simply not fair. Nigeria has to change that and Governor Sanwo-Olu is leading therein.

Mr Sanwo-Olu said converting LASPOTECH to University of Science and Technology will bring about innovative engineering, science invention and other innovations that are critical to the development of the country and the state.

He said the two additional universities will assist in meeting the demands and needs of teeming youths.

“It is about the future of our citizens. It is about the future of our youths, who truly believe in us to do the right thing. It is about our commitment to taking tertiary education to a level that all of us would be proud of. It is all around ensuring that we give hope and opportunity to our teeming youths that believe in us to do the right thing.

“We are giving a commitment that what we have done in LASU, we will also replicate it in the two universities. We will ensure that the two great children that we are giving birth to today are not left alone. All of the various development infrastructure; human and materials that are required to make the universities one of the best in the country, Lagos State would make those resources available for them.

“We say this with every sense of responsibility, knowing fully-well what we are doing in LASU, the level of infrastructure we are putting into erstwhile polytechnic and colleges of education, we would double up those efforts at ensuring that they can turn into great citadels of higher learning and universities that would be reference points in the years ahead.”

If there is one thing you can easily pick out from all the #iamaprofessional posts on LinkedIn in the past week, it is that professionalism differs from one industry to another. As an entrepreneur who has started and run businesses across different industries, I can attest that what is professional in one industry, might not be for the next one.

The first business I ever ran was in the tech space, and as we can attest, there are no strict rules to professional looks in tech. What we see these days is that the ‘techie’ is more associated with jeans and T-shirts. As an engineer, Jeans had always been a part of my dressing as it is what we use in site visits. With this background, I did not have any problems with my dressing.

However, when I moved on to the second business (which was in the finance space), I encountered a different orientation. This was an industry that was big on dressing, precisely black suits, white shirts, ties, and the likes. The first presentation I made to clients was a washout, not because I was not adequately prepared, but because the clients took one look at my dressing and tagged me ‘unserious’. I had put in all the time to prepare a power pitch, did all the research for my proposal but ended up walking into a room where I was the only person who failed to put on a suit.

Professionalism is fair, not just to you, but to others in the space, and their perception. If a certain way of dressing would make people uncomfortable doing business with you, you may have to make some adjustments. That is what professionalism is to me, and I think when I realized that professionalism was going to differ from one industry to another, that was the point I became a professional entrepreneur.

Thanks to LinkedIn, I can simply go find out what the standard is from the best people in any industry. From the contents they post to the way they engage, I can access all of that on LinkedIn. A professional entrepreneur will blend into any sector he gets into, and become a professional.