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The Belt and Road Initiative

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“China, prior to 1978 was a Non-market Socialist Economy; in other words, it was a closed economy influenced by the ideologies and leadership of Mao Zendong, a revolutionary political icon. This political and economic system did not favor a vast majority of the Chinese masses, therefore, the need for economic rejuvenation after his demise.

China began to introduce and implement capitalist market reforms in the late 1970s in a successful attempt to integrate the national economy with the global economy as a way of bringing prosperity back to the people. Now a Socialist Market Economy, it is the second largest economy by nominal GDP (Gross Domestic Product), and the world’s largest economy by Purchasing Power Parity, PPP according to the IMF (International Monetary Fund). The government successfully grew the economy at an average growth rate of 10% for over 30 years. As the manufacturing hub of the world with lots of thriving businesses that has produced the largest concentration of young multimillionaires…”  (David Gani, 2019).

It is time to spread her tentacles beyond her shores with an effective strategy.

The Belt and Road Initiative, BRI, also known as the One Belt One Road Initiative (OBOR), is apparently one of the most audacious social, economic, and political strategies ever conceived in recent world history. It was proposed by the Chinese President, Xi Jinping in October 2013 based on an ancient trade route. It created the world’s largest and most promising economic development zone. Within this initiative, the old trade route once again displays its vigor and dynamism to enhance economic cooperation and cultural communication among Eurasian countries.

At this juncture, for us to better appreciate the subject of discuss, we must make a time voyage back to ancient Asia, precisely the 2nd Century BC in Chang’an (now Xian) and examine an old trade route that would later be christened “the Silk Road” in 1877 by Ferdinand von Richthofen, a renowned German geographer. History has it that the Chinese were the first people to breed Silkworms for its linen by-product for commercial purpose. At this time, the silk fabric was in high demand by the nobles in Europe and Asia. Just as it obtains in any clime, as human settlements expand with attendant population growth, people tend to specialize in different skills thus necessitating the need for trade in a bid to satisfy the insatiable needs of man. Articles of exchange along the ancient Silk Road included gold, precious stones, tea, herbal medicine…and most importantly, silk. The prosperity of this trade influenced the rise of five major civilizations starting from the West Han Dynasty that was credited to have built the Great China Wall to protect the trade route, and to the last dynasty of Yuan that enjoyed the last glory days of the trade route around the 14th Century before its eventual decline.

The ancient Silk Road connected the Far East and the Western Dominions of Rome, India, Persia, China, and other major cities in trade, culture, and diplomacy along six major corridors or economic zones. The Silk Road measures 7000km square and it took 2 years to make a round trip from Rome to China. The trade lasted for over 1400 years at the time of Marco Polo’s travels (C. AD 1270 – 90). If the roads were to be gathered together to form a piece of land, it would be approximately the size of Akwa Ibom State in present day Nigeria.

In the light of this, let us return to a future date, to October 2013 and briefly examine the rationale for the modernization of the old Silk Road into the One Belt One Road Initiative. According to the mouthpiece of the Chinese Government, China’s People Daily, “Indeed B&R is a connectivity of system and mechanism to construct a unified large market and make full use of both international and domestic markets through cultural exchange and integration. To enhance mutual understanding and trust of member nations, ending up in an innovative pattern with capital inflows, talent pool, and technology database.”

The B&R Initiative was launched together with the Asian Infrastructure Investment Bank, AIIB with an initial endowment of $100b to address infrastructure gap amongst 68 member countries which covers 40% of global GDP, and 65% of the world’s population. The Silk Road Fund, SRF was established a year later to fund businesses. The modern Silk Road is now expanded to three zones: the Silk Road, Maritime Silk Road, and Ice Silk Road (still under consideration). With so much said about the land-based Silk Road, we shall now talk about the sea-based, and ice-based silk roads.

The Maritime Silk Road is a complementary initiative aimed at investing and fostering collaborations in South- East Asia, Oceania, and North Africa through several contiguous bodies of water of the South China Sea, South Pacific Ocean, Indian Ocean, and Mediterranean. In addition to the Maritime Silk Road, Xi Jinping also urged close cooperation between Russia and China to carry out the Northern Sea Route Cooperation to realize an “Ice Silk Road’ to foster the development in the Arctic Region. In the next 10 years, the whole initiative is estimated to cost four to eight trillion dollars ($4-8t).

Let us now shift our focus by examining how well the initiative it is faring in member states in infrastructure investment, construction materials, education, power grid, iron and steel, railways and highways, and automobiles. There are lots of Chinese firms currently engaged in member countries of the B&R economic zone making sure that the initiative works. In these concluding paragraphs, we shall look at a few of the numerous projects executed and ongoing in AIIB member states. Note, however, that these projects are not limited to the Less Developing Countries, LDCs but also in the member states of the Organization for Economic Cooperation and Development, OECD that are signatories.

Starting with Nigeria, the China Civil Engineering Construction Company, CCECC, is currently working on the construction of the Lagos-Ibadan standard gauge at a cost of 1.5 billion dollars. Down to Kenya, on June 17th, 2018, Wang Yang, Chairman of the National Committee of the Chinese People’s Political Consultative Conference, CPPCC, visited the Chinese-built Mombai-Nairobi Railway. After having a ride, he hailed the B&R Initiative and called for more cooperation between the two countries. Moving to Ethiopia, where the China National Water Resources and Hydropower Engineering Corporation (CWHEC) is building the 300mw Tekeze hydroelectric dam.

To the territory north of Ethiopia, Djibouti to be precise. China is expanding its global military might in Africa as it opens its first overseas military base providing logistical and defense support to African countries as part of China’s plan of projecting itself as the leader of the developing world and a nation that finds itself in solidarity with developing nations. African countries can barely finance their security agenda, and many nations face deficits when it comes to countering terrorism, piracy, and natural disasters.

Conclusion wise, the above listed examples of what the Chinese Government is doing in Nigeria, across Africa, and other parts of the developing world through the instrumentality of the B&R Initiative should suffice in giving us confidence that Nigeria’s economic development is getting an exponential boost.

How Salary Earners Can Save from Their Salaries

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What I’m about to reveal here is what I learnt from two different persons – a neighbour and a colleague. It’s actually the strategies people employ to help them save something out of their salaries (so I guess this post will be more beneficial to salary earners).

At times, salary earners complain that their salaries finish before they are paid. The result of this is that they end up borrowing every time to run their families. This sort of habit is the major reason salary earners hardly save since they use a greater part of their salaries to service loans. Well, I hope the strategies I will table here will be of help to them.

I am going to categorise these strategies into two groups – lessons from my neighbour and lessons from my colleague.

LESSONS FROM MY NEIGHBOUR

We were actually neighbours some years ago while I was in Ibadan. She was working with First Bank of Nig then. From the knowledge she gathered as an experienced banker, she taught some of us that were close to her a particular strategy people employ while trying to save out of their salaries. In this strategy, she said we should pay ourselves salaries from the salaries our employers paid us. Don’t worry, I’ll explain that.

According to her, when you receive your salary, share it into, say four, and keep one part for yourself. Now that part you kept for yourself is your actual salary. This is the part you are going to put away as the savings that is never going to be ‘touched’. She actually recommended that this one-quarter should be channelled into a long-term investment scheme that may take ten to twenty years to mature.

Now, the remaining three-quarters is what will be budgeted for home’s recurrent and capital expenditures. It is from this remaining three-quarters that you pay your rent, tuition, medicals, feeding, clothing and every other form of expenditures. Whatever that remains by the end of the month, or the year, can be reinvested into the long-term investment scheme, or used for some family projects (such as vacation, purchase of a car, house renovation, etc).

For the one-fourth that is saved in the long-term investment, she said that it should not be seen as part of the family income until the right time. In fact, she said that we have to assume that our salaries are short of that amount. What I mean here is, if your salary is #100, 000, and ¼ of it is #25,000, you have to assume that your monthly salary is just #75,000, which is ¾ of #100, 000. That way, your expenditure should be planned with #75k and not #100k. #25k should not be treated as part of the family earnings.

To be able to do this, she states that it will be easier to give your bank a standing order to remove the money as soon as your salary clicks. However, she said that every individual should be reasonable with the percentage of the salary being invested in this way. If 25% is too high for you, you can go for lesser. But ensure that you don’t spend everything.

LESSONS FROM MY COLLEAGUE

So this colleague of mine is a statistician. He teaches Statistics in Federal School of Statistics, Enugu (a school owned by National Bureau of Statistics). So, you will bear with me if I try to break down his lessons using layman’s language.

Well, what I learnt from him is that every salary earner needs to know how much his daily income and recurrent expenditures are. According to him, it is only when you know that you can actually control your expenses and be able to save up some money.

So, to find out your daily income you have to divide your monthly net pay by 30 (for thirty days in a month). For example, if your take home salary is #100,000 per month, when you divide it by 30, you will have approximately #3,300. So, #3,300 is your daily income (don’t bother asking me about weekends).

For your daily expenses, follow the guidelines below:

  1. Add up your regular daily expenses (such as purchases of snacks, transport fares) and multiply them by 365 days
  2. Note down your regular weekly expenses (such as weekly purchase of food items) and multiply them by 52 weeks
  3. Note down the expenditures that come once a month (such as car servicing, bulk purchase of food items, payment of electricity bills, and so on) and multiply by 12 months.
  4. Note down expenses that come every quarter of the year (such as school fees) and add them up (they are inconsistent so you can’t multiply).
  5. Take note of expenses done yearly (such as house rents, membership fees for clubs and professional bodies, and so on) and add them up
  6. Add up miscellaneous expenditures (if you can get all of them)
  7. Add up all your expenses (from a – e) and divide the result by 365 (for the days of the year). The result is your daily expenditure.

Ok, so statisticians have a way with numbers. But put simply, what he is saying is that you have to ensure that your expenditure never surpasses your income. If your daily income, for example, turns out to be #3500 and your expenditure (after all the additions, multiplications, divisions and subtractions) happens to be #3800, then you are already running a deficit. This means that you are likely going to pick a loan to make up for the balance.

BRINGING THEM TOGETHER

Ok, so I am not a financial expert and I am not a statistician, but I will try my best to bring some applicable strategies from these mind boggling lessons. Below are the easiest steps you can take to save and increase your income, based on these two ‘theories’.

  1. Divide your monthly salaries into daily incomes. You actually need to know what you earn each day (stop focusing on the bulk that comes at the end of the month). So divide your salary by 30 and see how much your employer pays you for a day. The trick in this strategy is that if you are not happy with the result your calculator gives you, you will start thinking of how to make things better.
  2. Pay yourself everyday. So, how much are you going to pay yourself from your salary? If your daily pay is #3000, for example, and you decide to pay yourself #500 per day, in a month, you would have saved up #15,000. Remember that whatever you save from your daily pay is not meant to be spent in the near future.
  3. Increase your daily income. If you are not satisfied with your daily income, then you have to find ways to increase it. For example, you may want to add an extra #2,000 to your daily income by looking for a better paying job or finding a secondary source of income that can give you something close to that amount every day. This means that you may earn an extra #60, 000 each month.
  4. Increase your personal salary. If you find a way to increase your daily income, you should remember to increase how much you pay yourself. So, don’t relax and spend the extra income you brought home. In fact, try to save half of it, or more.
  5. Don’t put all your eggs in one basket. Don’t use only one form of investment or investment firm to save. You need to seek proper advice from the right quarters before deciding on long term investments. But, ensure that you save up something.
  6. If your expenses are getting higher than your income, then you have to make some adjustments. For example, if your salary is #60, 000 per month, it means your daily income is #2,000. If you are living in an apartment where you pay #350, 000 as annual rent, your daily rent is #958. In other words, every other expenditure, and saving, will come from the remaining #1042. Now you understand why you need to know how much you earn and spend in a day.

Whatever you decide, I still advocate that you find a secondary source of income so that you can have enough to save, and spend.

21 Century Marketing That Works

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The world has come a long way. From mass media like radio, TV and OOH (billboard) advertising, which are very much like talking to a crowd of people all at once, to more personalized forms of marketing like email marketing.

Email marketing uses automation software to deliver personalised messages to different target audiences. It relies on expert copywriting to reach its readers and is crafted to speak to the pain points of old, new, and prospective customers. To be effective, your emails must be read, and they must make readers take the desired action. Companies who have taken advantage of this medium have had great success. Plus, it is a very cheap way to do some selling. But you need to make sure that you target the right audience so that your emails are not seen as spam. Another new school marketing tactic is influencer marketing.

Influencer marketing is another way to gain a massive brand following and easily market your product or service. Influencers in the digital space have millions of followers who adore them and are generally ready to go where their idol goes and do what their idol does. Any company selling a product that aligns with what the influencer stands for can easily get loads of buyers via influencer marketing. Another new marketing tactic is content marketing.

Content marketing is yet another way to get the attention of your audience and get your products into the lives of ready consumers. All it requires is a good story that is relevant to your target market and a subtle insertion of your marketing message in the body of the content. Of course, content marketing is not just about words and pictures, videos are also a part of content marketing. In fact, all the points I will discuss in this article stand on the foundation of content.

Don’t they say content is king?

Video content is a great way to share engaging pieces with your audience. People enjoy watching creative, short, entertaining videos and are likely to share them with their network online or talk about them. The more connected they feel with your video story, the more likely they are to engage with it. But you must not forget to make it in such a way that the first three seconds of it gives them a reason to keep watching.

What other new school marketing tactics have you found helpful?

Why Nollywood Should Celebrate Prof. Françoise “Ijeoma” Ugochukwu

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Setting the Scene

Yes, you might find it a bit hard to come across the name on Google Scholar, at least not in the manner I have laid it out, but then again, that’s probably a good reason why you should read this tribute to a deserving individual irrespective of her dual baggage of foreignness and womanhood going by the African cultural construals.

I would save the details to the very end… don’t worry, you’d be glad I saved the best for last!

Let me kick this story off with its main trigger. I just received an alert from Academia.edu the online portal for academic papers published and shared freely outside the framework of “Open Access” as we in academia tend to describe it – albeit made possible through some sort of subvention that most individuals and organisations alike would be more than happy to circumvent (don’t quote me).

That article was entitled “Nollywood, Nigeria’s umbilical cord.” Yes, there are analogies and a bit of humour, both of which underlie the power of the Nigerian movie industry as a connector to Nigerians at home and in the diaspora.

Today, a significant 10% of the Nigerian diaspora live in the United Kingdom – probably the largest Nigerian community in Europe. Research carried out between January and March 2011 confirms the slow cultural erosion already reported by earlier studies and affecting Igbo and Yoruba resettled communities, with Nigerian languages on the decline. It also reveals the premium placed on communication among Nigerians, with 73.5% talking frequently to fellow Nigerians and watching Nigerian video films, massively preferred to foreign films.

Interestingly, the article seems to zero in on two of the three ethnic groups in the South (notable East & West) as follows:

This paper seeks to evaluate the impact of Nigerian video-films among resettled communities in the UK and find the reasons behind the success of these films among Nigerians, focusing on Igbo and Yoruba speakers.

Related to these geographic spaces is the identity issue and diasporic connections inferred in the title.

It investigates the potential importance of language in viewers’ motivations and practices, the role played by the cultural message of the films in identity-reinforcement within the Nigerian community, and the impact of these video-films on the revival of cultural practices among diasporic communities. It shows that these films, acting like an umbilical cord feeding ‘abroad members’ with pictures and sounds from the home country, have empowered diasporic Nigerians to cope with their situation, reclaim their culture and keep in touch with their ancestral land. 

Highlights

For the purpose of this study, we will adopt Safran’s definition of Diaspora (1991: 83-84), based on a six point-list describing this group – notably disperse; collective in memory; alienated/ insulated; craving to return; homeland restoration; and ethnocommunal consciousnesss:

“(1) they, or their ancestors, have been dispersed from a specific original ‘centre’ to two or more ‘peripheral’, or foreign, regions; (2) they retain a collective memory, vision, or myth about their original homeland – its physical location, history, and achievements; (3) they believe they are not – and perhaps cannot be – fully accepted by their host society and therefore feel partly alienated and insulated from it; (4) they regard their ancestral homeland as their true, ideal home and as the place to which they or their descendants would (or should) eventually return – when conditions are appropriate; (5) they believe that they should, collectively, be committed to the maintenance or restoration of their original homeland and its safety and prosperity; and (6) they continue to relate, personally or vicariously, to that homeland in one way or another, and their ethnocommunal consciousness and solidarity are importantly defined by the existence of such a relationship.”

 The article (and many others related to it agree) highlight implications for Nigerians in Diaspora Organisation (NIDO) worldwide, which is currently structured into eight regions including NIDOA for USA and NIDOE for Europe, and recognised by the Nigerian government as the umbrella organisation for all Nigerians around the world and as a vanguard of Nigeria in the international community performing the following ambassadorial functions:

Promote Nigeria’s image abroad, encourage patriotism, networking and cooperation among Nigerians abroad, and assist in promoting Nigeria as an investment destination in Africa.  

Introducing Professor Ugochukwu

Professor Françoise Ugochukwu (Igbo name: Ijeoma), habilitée à diriger des recherches, is a Chartered linguist & an Africanist with special interest in Nollywood, Nigerian and intercultural Studies. A retired Professor from the University of Nigeria, currently affiliated to the Open University (UK), Dept of Development Policy & Practice as a Research Fellow, she is also a Senior Research Fellow, IFRA (Ibadan). She lectured in Higher Education in Nigeria, France and the UK, 1972-2014. She is now a full-time researcher and PhD examiner. She also serves as an expert on the Paris-based ‘Neverforgetbiafra’ endowment fund. She is the author of the first Igbo-French dictionary (a Franco-Nigerian joint venture), of several books and more than a hundred book chapters and articles in English and in French in reputable journals worldwide; she also translated the first Igbo novel, Omenuko, into French.  Her pioneering work in the field and longstanding contribution to the strengthening of cultural and educational ties between France and Nigeria awarded her the national distinction of Chevalier des Palmes Académiques in 1994.

 

Read More:

 

Ugochukwu, F. (2011). Nollywood, Nigerians’ umbilical cord. African Renaissance, 8(2), 59-75.

Madichie, N. O., Ajakaiye, B. O., & Ratten, V. (2019). The Impact of New Media (Digital) and Globalisation on Nollywood. In Digital Entrepreneurship in Sub-Saharan Africa (pp. 89-121). Palgrave Macmillan, Cham. https://link.springer.com/chapter/10.1007/978-3-030-04924-9_5

WeWork and Nigeria’s Stock Exchange Latency Lever

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The Nigerian Stock Exchange is unique for many things. But one surprises me: news hardly move prices of equities in the short-run. It is like investors do not follow the news.  The day an energy company got a big hammer from the Securities and Exchange Commission, I watched to see the impact on the equity. At the end of the day, nothing significant happened. 

A bank CEO was locked up by EFCC over a weekend, the bank equity traded on the Monday largely unchanged. A bank declares record profit, and the next day, nothing significant happens on its valuation. Sure, over time, the trajectory becomes noticeable. 

I have coined a phrase to explain this observation – latency lever; Nigeria has one of the longest in the world. Latency lever is a period between a significant news on a company, and when a visible associated impact (i.e. the lever is pulled) is seen on its traded equity.  In U.S, it is near instantaneous; in Nigeria, give it at least a week!

This brings me to We Company, the parent of WeWork, a quasi-technology real estate company that operates mainly in U.S. We Company last raised private capital at a valuation of $47 billion. It wanted to go public and had filed paperwork with road shows planned. But it has many governance issues, triggering scenarios that its public valuation could fall below $20 billion. So the road show is cancelled and the IPO is postponed, the Wall Street Journal notes..

WeWork’s parent postponed its initial public offering after investors questioned how much the company is worth and raised concerns about its corporate governance.

The shared-workspace company—which had planned to begin a roadshow to market the shares as early as Monday ahead of a trading debut next week—shelved the offering until at least next month, people familiar with the matter said.

This company has not even gone public but the impacts of news are evident. Its main backer, Japanese SoftBank Group,  is even facing pushback as it works to raise a new fund from its partners.

The biggest backers of SoftBank Group Corp.’s gargantuan Vision Fund are reconsidering how much to commit to its next investment vehicle as an oversized bet on flexible workspace provider WeWork sours.

Saudi Arabia’s Public Investment Fund, which contributed $45 billion to the $100 billion Vision Fund, is now only planning to reinvest profits from that vehicle into its successor, according to people familiar with the talks. Abu Dhabi’s Mubadala Investment Co., which invested $15 billion, is considering paring its future commitment to below $10 billion, the people said, asking not to be identified in disclosing internal deliberations.

Contrast that with when a bank CEO is locked up by EFCC, a financial crime fighter, and the bank market cap unchanged at the end of the next trading day, you will appreciate the uniqueness of public investors in Nigeria. Yes, that lack of visible action cannot be explained by rules designed to avoid drastic fall on market valuation of companies. Of course, wait for a few weeks, those investors will begin to run. I am not sure if it is due to the structure of the exchange since it has become computerised to a large extent. I just think the investors are unique in how they process information, and take actions on Buy, Sell and Hold.