An International Monetary Fund (IMF) team led by Ms. Jesmin Rahman held virtual meetings with the Nigerian authorities from June 1-8, 2021 to discuss recent economic, financial developments and outlook. The body made a three-point conclusion about Nigeria’s economy at the end of the meetings.

1. Real GDP is recovering but unemployment and inflation remain elevated.
2. Recent exchange rate measures are encouraging, and further reforms are needed to achieve a fully unified and market-clearing exchange rate.
3. The resurfacing of fuel subsidies is concerning, particularly in the context of low revenue mobilization.

At the end of the visit, Ms. Rahman issued the following statement:

“The Nigerian economy has started to gradually recover from the negative effects of the COVID-19 global pandemic. Following sharp output contractions in the second and third quarters, GDP growth turned positive in Q4 2020 and growth reached 0.5 percent (y/y) in Q1 2021, supported by agriculture and services sectors. Nevertheless, the employment level continues to fall dramatically and, together with other socio-economic indicators, is far below pre-pandemic levels. Inflation slightly decelerated in May but remained elevated at 17.9 percent, owing to high food price inflation. With the recovery in oil prices and remittance flows, the strong pressures on the balance of payments have somewhat abated, although imports are rebounding faster than exports and foreign investor appetite remains subdued resulting in continued FX shortage.

“The incipient recovery in economic activity is projected to take root and broaden among sectors, with GDP growth expected to reach 2.5 percent in 2021. Inflation is expected to remain elevated in 2021, but likely to decelerate in the second half of the year to reach about 15.5 percent, following the removal of border controls and the elimination of base effects from elevated food price levels. Tax revenue collections are gradually recovering but, with fuel subsidies resurfacing, additional spending for Covid-19 vaccines, and to address security challenges, the fiscal deficit of the Consolidated Government is expected to remain elevated at 5.5 percent of GDP. Downside risks to the near-term arise from further deterioration of security conditions, and the still uncertain course of the pandemic both globally and in Nigeria.

“The mission commended the authorities’ measures to contain the transmission of Covid-19 in Nigeria, including the ongoing vaccination program under the COVAX initiative, and strongly supported the authorities’ efforts to acquire additional doses from countries with surplus stocks.

“The mission expressed its concern with the resurgence of fuel subsidies. It reiterated the importance of introducing market-based fuel pricing mechanism and the need to deploy well-targeted social support to cushion any impact on the poor. The mission recommended stepping up efforts to strengthen tax administration to mobilize additional revenues and help address priority spending pressures. “The mission urged the authorities to keep reliance on CBN overdrafts for deficit financing within legal limits, while the government continues to make efforts to strengthen budget planning and public finance management practices to allow for flexible financing from domestic markets and better integration of cash and debt management.

“The recent removal of the official exchange rate from the CBN website and measures to enhance transparency in the setting of the NAFEX exchange rate are encouraging. The mission recommended maintaining the momentum toward fully unifying all exchange rate windows and establishing a market-clearing exchange rate. On monetary policy, to strengthen the monetary targeting regime, the mission recommended integrating the interbank and debt markets and using central bank or government bills of short maturity as the main liquidity management tool, instead of the cash reserve requirements.

“The banking sector remains liquid and well-capitalized while non-performing loans (NPLs) are contained. The extension of the moratorium on principal payments of qualifying credit facilities on a case-by-case basis through March 2022 should be limited to viable debtors with strong pre-crisis fundamentals. CBN stress tests purport that the banking system would remain adequately capitalized except in case of a severe deterioration of credit quality. Nevertheless, it remains to be seen what share of forborne loans may turn non-performing as the impact of the pandemic abates. Since NPLs often rise at the later part of economic crisis, CBN’s strong oversight remains critical to safeguarding financial sector stability.

“How do you still comment on Nigerian matters? Do you know that in my school, intellectual conversation is dead. Everything is connected to your name and no data presented matters. I am tired of Nigeria; I cannot do my job without suspicions” (a friend lecturer in a university in Nigeria)

This trajectory is possibly what will make it harder for the nation to rise. I listened to a leaked audio of a governor [yes, that one], and how that governor used the tribe of a professor to rubbish his work. All the data presented did not matter. What mattered was where he came from!

The pursuit of knowledge brings liberation. The greatness of America comes through its capacity to create new knowledge, and apply it, ushering in mines of knowledge which renews and refreshes the nation, economically. In Nigeria, everything is about tribes with high voltage suspicion.

Be concerned if a political science student would be worried how his professor will grade his assignments because of his tribe, and not on the quality of his reasoning! We are destroying the fabrics of this nation.

Buhari did well in this sector.

• Igbo man: They have paid you.
• Hausa man: Happy you just discovered.

Buhari has destroyed this sector

• Igbo man: FFK predicted it.
• Hausa: You are a Biafran.

Yes, no matter what you write, there are people to offend, irrespective of your data. That is a concern for Nigeria – big time.

We have three core courses on broad reliability, project & quality domain – and they are really popular. Michael Odigie PhD of Delek Logistics USA developed our course on Quality and Asset Management. Rasheed Adebayo of Schlumberger UK developed one on Project Planning &  Operations Management, and Taiwo Abraham. PMP of Horizant Canada created one on Effective Project Management.

Today, we want to get something deeper for manufacturing sector people, after all, we have a good relationship with the Nigerian Society of Engineers (sponsored their executives to our program) and Manufacturers Association of Nigeria (MAN) – leaders also in the program.

We share that Charles Igwe PH.D of Sigma Point Canada is developing a course on Lean Six Sigma with focus on the manufacturing and construction sectors. As is typical in our courses, he will add cases and also challenge assignments. Our expectation is that this will help deepen quality and improve processes in firms. Welcome Dr. Igwe to Tekedia Institute.

What a pity and something for everyone to learn from: Francis Atuche is going to jail! An Ikeja court (Lagos) sentenced him to six years imprisonment for defrauding the bank the sum of N25.7 billion.The ex-Managing Director of Bank PHB (now part of Keystone Bank) was an ace operator who fell to his demons. Yet, sending a man to jail for destroying the lives of many does not offer full justice, Nigeria needs to work harder to prevent these crimes. I drive around America and see mechanic shops which are 50 years old and counting, run by human beings. 

“By stealing from the bank, they stole from innocent customers of the bank.

I hereby make an order of restitution against the first and third defendants to refund the sums stated in counts one to 11, 14 and 24.

The sums are to be paid to the relevant agencies that recovered the funds on behalf of the bank.

The first defendant is hereby sentenced to six years imprisonment on counts one to 11, 14 to 20, 23 and 24,” Okunnu said.

The third defendant is hereby sentenced to four years imprisonment on counts one to 11, 14 to 20, 23 and 24,” she held.

The judge, however, held that the sentences would run concurrently.

“It was a well-planned, well-executed scheme but the bubble burst when the Central Bank of Nigeria (CBN) intervened,” she said.

She revealed that both men stole from the bank using well-recognised stockbrokers to transfer money belonging to the bank under the guise of loans and shares.

Meanwhile, Atuche begged the judge not to send him to jail, pleading for mercy he said, “All the time I was the MD of Bank PHB, I gave my all to the bank.

Never at any material time did it occur to me that I would set up a scheme to defraud the bank.

I plead for mercy, leniency, your kindness, and I plead that out of your kindness and generosity, you will not allow me to go to jail. I am sorry and remorseful,” Justice Okunnu.

Yet, we cannot keep a banking institution up and running for two decades. I do think we need to make the Whistleblower regulations stronger so that junior workers can be bold to report these things to law enforcement. Convicting 2-3 people for stealing N25.7 billion sounds good but the biggest shame is that hundreds of workers who saw the sleaze did not have the tools to have reported to stop it. 

Nigeria must invest in prevention rather than just prosecution, and I am calling EFCC to open a Department of Financial Crime Prevention. There are some fundamental things we can do in Nigeria to reduce these crimes. It needs to understand that convicting these men offers marginal value; the biggest victory is preventing these crimes! Time for that playbook! This video explains.