Sunday, August 31, 2014

The rat trap

At the Africa Development Bank Annual Meeting in May, a commentator asked a high level panel comprising those who should know what is being done to contain the spread of Ebola because the much touted Africa rising and growth can be wiped out by an epidemic. This commentator was dismissed and I recall another commentator in the audience retort that Ebola cannot spread or cross borders. 2 months later, the story is different. The disease has spread from Guinea (430 deaths/ 648 cases) to Sierra Leone (422 dead/1026 cases), Liberia (694/ 1378 cases) and Nigeria (6 deaths/ 17 cases) and now Senegal.  
The outlook of the region reminds one of the rat trap fable where the animals who refused to help destroy the trap set by the farmer for rat ended up being killed as food for mourners when the farmer's wife died from injuries.
The outbreak of this virus has affected businesses and commerce- especially the foreign investment Africa desires. The effects of the disease is evident and may continue for a while. Ergo, the Continent's economic outlook is diminished- at least for 2014. In Sierra leone, farming and mining activities ( the country’s new frontier and employer)  have been adversely affected and there fears that inability to farm will affect the country’s food security. Liberia has also suffered a similar fate as Sierra-leone. It appears to be worse off as the level of stigmatization is high and some victims are left to die. 
 Though the disease is yet to reach epidemic proportions in Nigeria and its effects almost insignificant, some businesses have issued travel bans to and from Nigeria. The nation’s saving grace may be the gains airlines and business make from the region hence the continued business.Yet that Nigeria was looped in this Ebola cycle illustrates the consequences of ill-preparedness. In March 2014, Nigeria’s minister of information stated that the Country has vaccines to combat Ebola  and is ebola-ready. In July (2-3), there was a WHO meeting in Ghana  for Health Ministers on how to  combat Ebola and Nigeria’s health minister was missing. 
But for the proactiveness and selflessness of Dr Adadevoh and First Consultants Clinic, Lagos may have experienced an outbreak. Even with the sub-optimal state of Nigeria’s health facilities (I have it on good authority that that medical supplies for doctors who are usually first casulties in epidemics as this  e.g covers, gloves etc are not sufficient).
For those who downplay Dr Adadevoh’s ethics and sacrifice, the spread  of the disease in Port harcourt, the unknowns- how far has it spread, who has slipped through the radar-  shows the need for personal integrity and ethics. The late Port Harcourt according to reports was aware the patient had Ebola, did not report it and supposedly took precautions. Unfortunately for him, he his late, has endangered the life of his immediate family and a state with population of about 6 million residents. The Federal government also shares the blame in the spread of this virus as they were away that 2 people under surveillance slipped away and failed to track them.
As a region, the outbreak of this Ebola strain offers lessons which include:

  • The need to follow rules and systems. First Consultants on discovering the Ebola index case carried the virus informed the authorities. If only Dr. Enemuo had towed a similar path
  • Greed,corruption and its sister attitudes- see-no-evil; let-it-be- are a scourge that has to be addressed because it kills. 
  • There can be no growth and development without a healthy population. Though cliche health is wealth and sick population cannot be productive. The same attention that is being given Ebola should be accorded similar diseases like Malaria and Polio.

The Federal Government has touted the transformation agenda as working in the area of employment- though statistics beg to differ-. The Minister of Finance stated that 1.2 million jobs were created  in 2013 but this only visible in government realms. The reality is that  existing unemployment levels is increasing and as Bola Tinubu mentioned it is a ticking  time bomb. Gullible job seekers are being defrauded and corruption in the Federal service  is engendered thanks to norm of allocating existing vacancies to staff members who then sell their slots to jobseekers.
I understand that there is a company located in Surulere that operates illicit recruitments and despite reports to the police, no action has been taken. Stories of job seekers who  employed as sales officers,required to give advance payments for machines that are yet to be delivered and promises of roles for certain prices. According to those who have experienced this fraud, they are those this position available for NGN 25,000, that job for NGN15,000, after they pay no jobs are given. 
For the Federal government, the NIS recruitment scam and the NGN 1000 paid by applicants is mild compared to what is the norm in other government agencies. Civil servants have become HR when recruiting as they are given slots for open positions which they sell for as high as 400,000. Here, the job is guaranteed but for the highest bidder. However, the repercussions of this method of recruitment is 1) the wrong person more than likely gets the job and that will affect performance. 2) considering that the take home pay of civil servants say NSDC is insignificant, an individual that pays 400,000 for a job will definately recoup that cost from customers- citizens

Thursday, August 28, 2014

Dangote 1: Lafarge: 0

Standard Organization of Nigeria’s change of all-purpose cement grade from 32.5 to 42.5 is killing a fly with a sledgehammer. The cement war between Nigeria’s major manufacturers (LafargeWAPCO and Dangote) crystallized when the House of Representatives and SON called it in favour of Dangote. In a economic competition that is profit driven and has no benefits for consumers of cement (in terms of significant price drop) this intervention is unsavory and sends foreign investors the message that Nigeria is protectionist in a circuitous manner
Cement importers and West African Portland Cement Plc. (WAPCO, established 1959), which transitioned to Lafarge/ WAPCO after a takeover by Lafarge SA in 2001 dominated Nigeria’s cement industry. WAPCO and Cement importers set prices for cement. For a large market like Nigeria, business was lucrative for WAPCO in spite of its limited production volume (4.5 million metric tonnes annually) and high energy costs – especially as the facilities lacked gas pipelines. The importers even had higher profit margins, as the cost of importing is less than production cost. By  2012, there was a glut of cement and cement importation was banned in 2013. 

Few points to note:
·         WAPCO was profitable because of the 32.5 cement grade that it produced. Cement is produced limestone rock, chalk, shale, or clay and additives such as Pozzolana, fly ash (industrial waste) and limestone. Nigeria has limestone in industrial quantities and is the preferred additive for manufacturers.
·         There are 4 grades of cement- masonry cement which is used for plastering, 32.5 cement which was all purpose and up till May 2014 was acceptable in Nigeria for constructing commercial and residential buildings.  Most buildings such as Cocoa House, my office, my house and your house- if you live in Nigeria- were built with 32.5 cement grade. 42.5 grade is used for bridges and heavy construction while 52.5 grade is used in countries like the UK and US because of their weather. The difference in all these grades is the proportion of additives i.e. limestone used in the production. 32.5 have more additives than 42.5. Currently, both grades are produced by cement manufactures in Nigeria in different quantities with Lafarge producing more of the 32.5 grade because of its capability.
·         Dangote supposedly became a player in the cement industry due to influence by the Obasanjo administration when it pursued a policy to encourage cement manufacture rather than importation considering that Nigeria has requisite materials to produce cement. In 2000s, Dangote acquired a new production facility in Obajana with a capacity of 10 million metric tonnes. Earlier this year, another facility with similar capacity was commissioned at Ibese. Also, in 2013, production at the outdated facility at Gboko was discontinued
With Nigeria having 2 major players competing for cement market share one will think that both manufacturers would produce the 32.5 and compete for buyers. However, it will be unprofitable for Dangote cement  to produce 32.5  because its facilities will be underutilized and there will be no economies of scale.    Like eggs, the amount of energy used to boil 1 egg will boil 10 eggs so it is more efficient to boil 10 eggs. For Dangote cement, it is more profitable and efficient to produce a higher grade of cement than "cooperate" and produce the same grade of cement with its competitors. According to reports, it costs Dangote $3 to produce a 50Kg bag of cement sold at $9.
 Without the government’s regulation, it will have been a survival of the fittest contest between Dangote and LafargeWAPCO. Rather than let the markets and consumer preferences decide, spurious associations and claims were made blaming the occurrence of building collapse on grade of cement. If a building collapses, it is likely that substandard materials were used. It is unfortunate that the government was partisan in this issue and made decisions on the partisanship. Also, the government should have plainly said it is adopting a protectionist policy in Nigeria's cement industry. Countries protect certain industries and no one blames them for it. This deception connotes that Nigeria is not a fair playing ground and sends a wrong message to the investors we seek to attract. There is absolutely no need for the deception. The appearance of partisanship in this matter is unnecessary as both companies are moving on from just competing for the Nigerian market to Africa's market. Lafarge recently announced a merger of her Nigeria and South African units, whilst Dangote cement has also shown interests in markets in Uganda and other parts of Africa. In a purely economic-business interest matter, the companies will survive and still make their profits. Question is do we have government that will vigorously pursue the interests of her people as it protects the interests of business allies?

update 1: Dangote cement recently launch 32.5 grade cement.
update 2: Earlier in November, Dangote slashed the price of its cement to NGN 1000. I am with  a Sola Salako who  wrote below
“I hear Dangote just singlehandedly, crashed the price of cement to N1,000 from N1,700! Obviously, this is another move in the attempt to stifle competition coming on the heels of getting SON to re-grade cement classification in its favour via political patronage.While this seems like a benefit for consumers in the short term, I fear it is very inimical to growth in that sector in the long term. The few competing brands may eventually close down if they don’t survive the price war after emerging bruised from the pseudo classification battle. More unemployment looms…Just as Dangote has the singular power to determine pricing downwards, who will challenge him when he pushes price to N3,000 after he has successfully run competition out of the market? This is akin to a rat nibbling away at your feet and blowing soothing air so you don’t feel it…until it hits blood!Nothing to rejoice about here if we are long term oriented people, unfortunately, Nigerians are not, so….”

Nigeria has been plagued with a leadership that thinks her citizens are incapable of basic comprehension and thinking skills. This thought pattern has permitted various officials to make incredible claims and get away with such statements. The incredulity continues. On the13th of August, the Federal Ministry sent a circular (below) announcing the sack of resident doctors. Less than a week after, the minister of health boldly claimed that no doctors were sacked. Seriously!

From the airports to offices, everyone is on an Ebola alert. You see airport officials and security men brandishing thermometers to take temperatures before entry. This will be normal if it was not amusing. In the past week my temperature and those of my colleagues has ranged from 25 to 34 degrees; yet we are allowed to enter the office premises. When I mentioned that the thermometers were not right, I got a "I-am-here-to-take-temperature-not-interpret"response. Colleagues returning to Nigeria also share the same experience. An interesting study will be to study the effect of lack of acuity and wit on our society. 


Sunday, August 17, 2014

In Case You Missed It

Source: Anonymous art of Revolution

As it is in Nigeria so it is in the US. Nigerians have become familiar with police brutality in their approach to citizens and blatant corruption.The US also experiences similar issues though their's is shielded by policy. The New Yorker gives a descriptive account of police militarization in the US. It is a good read. Eternal vigilance is the price of liberty. Citizens cannot afford to be sentimental and apathetic where elections- legislature, local government, state, schools and police board and commissioner elections- are concerned. The people elected into these positions exert influence that affect the daily lives of ordinary citizens- ordinary citizens like you and me

In the course of the week, it was reported that about 100 boys were kidnapped in Borno on the 10th of August. 85 of these captives have been rescued by Chadian military forces. This swift rescue illustrates the importance of quick response to attacks. The 3 week denial and lapse in Nigeria's response to the abducted school girls has led to four months of these young women as hostages. The results of the examination these  kidnapped girls were writing has been released, yet they are still nowhere to be found. Sadly, the lives of these women and their families has been politicized  by the government- through the tried and failed method of throwing money at a problem- and the Northern Elders Forum, who  appear not to have the interest of their people at heart. 

Whilst Chadian troops were rescuing our people, our DSS( Department of State Security) joined Nigeria's political parties in the game of mudslinging. The DSS spokeswoman without any evidence accused an unnamed political party of offering security agents 14 million Naira ($87,500) and coyly thanked God that APC won. Political parties may get away with smear campaigns against each other. Civil servants and government institutions should not. That Nigeria's DSS is politically vocal is a unfamiliar experience that should not become a norm because agencies like the DSS should be seen not heard.

Sunday, August 10, 2014

Garden city, Eleka and other stories

I eagerly anticipated my trip to Port Harcourt. I was prepared to be surprised by the Garden City but  was disappointed. For a city that is deemed a "major city" like Lagos and Abuja, I was reminded of Ibadan and Abeokuta as we drove into the city.
Despite the disappointment, Port Harcourt provided hilarity. It typified the religiosity and over-familiarity with God Nigerians possess. The day ended with an encounter with Port Harcourt police. One can conclude that from West to South South, Nigeria's police force have similar thinking patterns.

War of Billboards.
I took no notice of the large bill boards that dotted the city. One read: "God ordained leadership is better than  imposed leadership, let's pray for it". I did not think much of it till I saw:"A greedy shepherd sacrifices her sheeps; a good shepherd protects her sheeps. Rivers State is not a sacrificial lamb". I realized it was a battle of billboards when I spotted: "Oh Lord deliver! set free! and liberate Rivers State". I visited different areas of the city and these billboards were everywhere.
Rather than promote propaganda through expensive billboards, interest groups in the state should use  the money on the citizens they intend to persuade. 

Eleka Police Station
As I toured Port Harcourt, we -I was with a friend- were stopped by policemen and the following conversation (paraphrased) ensued:
Police Officer:  You did not stop when we asked you to stop
Friend:   I did not see your hand signal. This truck was in front of me and I stopped when I saw you
PO (entering car): Please move forward and park here. 
Another police officer entered the car and we began an exchange that lasted about 30 minutes on how friend did not stop for a manual hand signal.Police officer demanded for driver's license and he was given. Friend refused to play ball and  Police officer II said we should go to the station. 
Me: Are we going to a proper station?
PO II: Yes, is there a fake station? 
Me: well. 

We drove for 20 minutes in the traffic (whilst in traffic, another uniformed police officer enters the car) back to the point we were arrested. The uniformed police officer (UPO) asked friend to park. Friend demanded to know why as we were to go to the station. UPO said he wanted to tell his colleague he was off to the station. We said no, he should call the colleague. Friend mentioned and insisted that no other officer is allowed to come into the vehicle. UPO flared up and said we had no right to command him. PO II continued on how we are obdurate. He  got off the  car and left UPO. About 2 minutes later, we were told to go. Friend made a U-turn and before UPO disembarked his female superior called

Madam PO: "anything"?
UPO: Nothing ooo, dey be Oyika, just dey speak grammar
Madam PO: Ok. 

My thoughts: I have had a number of experiences with uniformed men and have learned:
1)  Always carry valid and complete car documents and driver's license 
2) Never be in a hurry to resolve an issue, they prey on your impatience and you continue the cycle of corruption by giving a bribe just to leave the scene. If you have contravened the law, be ready to bear the consequences. 
3) Police officers, LASTMA etc are not allowed to enter your vehicle, if they are making an arrest, they should follow you in their own vehicle. If they have to enter your vehicle, let them know they are breaking a law
4) Be civil, polite and clear(clear that you are willing to follow the issue to it's conclusion) in your communication. It's easy for the issue to go from "not taking a right turn" to "insulting a police officer"
5) If you want to record the incident, do it discreetly- in the books of Nigeria's security and transport authorities, transparency whilst they carryout their duties is a crime. 

On Ekiti and Osun State  Elections
In June, All Progressives Congress (APC) lost to People Democratic Party (PDP) in Ekiti's governorship election. APC leveled with PDP in Osun State yesterday. I am of the opinion that the elections did not represent an acceptance of either party but an acceptance of the candidates. Populist politicians are accepted by the people even if they act against the interests of the people as seen in Ekiti State where the governor-elect's promise is to empower citizens by giving out contracts. Thus, for politicians who mean well, they have to learn to connect and understand the people they want to lead. 
Also, popular governors like the governors of Osun and Ondo States should begin to introduce and groom those they wish to succeed them. Otherwise, their opponents in the 2013 and 2014 elections- should they recontest- will have a smooth sail into government house.