Inside Business Africa INSIDE BUSINESS AFRICA APRIL 2019 - Page 10

Global News "In all, we will be employing up to a million, and that will be the largest post- tertiary job programme in entire Africa. The reason why we have done this is because of the employment problems that we have, we may not be able to engage everybody but at least the government must give some direct provision of jobs." Prof. Osinbajo explained further that though the government could not pay more than the N30,000 currently paid to beneficiaries and also fix all the unemployment issues, it is working on creating the enabling environment to ensure that beneficiaries, as well as other unemployed Nigerians, become useful to themselves. He said: "It is infrastructure that will create the opportunities to provide more jobs, especially through manufacturing and Industry. "So, we are doing roads and rail, providing power; that is the way we can develop the industry. We are energising our markets at the moment, putting solar power in the markets. We have designated 300 markets, we have done Ariaria in the South East, Sabon Gari in Kano, Surat in Lagos, Isikan in Ondo, Gbagi in Oyo and we are expanding so that more people can work." On the need to engage more women in productive activities, Prof. Osinbajo said: "one of the ways the Buhari administration is engaging more women is through our GEEP loans." He said: "56% of our GEEP loans go to the women. So there is a lot of preferential advantage that we give to women and this is because women are effective managers of resources; they pay back these loans when they are given." Speaking on the misconceptions about the borrowing arrangements of the Buhari administration, the Vice President said, the country, under President Buhari, was not in a terribly bad debt situation as insinuated in some quarters. According to him, very frequently you find people creating fear about the issue of debt and saying that this government has borrowed more than previous governments. "I want to give you the facts and figures on the debt issue. The dollar- denominated debts of Nigeria - that is the debts of the Federal Government, the States and Local governments. "In 2010, Nigeria's debt was $35 billion; Maryam Uwais 2011, it was $41billion; in 2012, it was $48 billion, in 2013, it became $64 billion; 2014, it rose to $67 billion; 2015, it fell to $63 billion; 2016, $57 billion; 2017, $70 billion; 2018, it is $73 billion. So, the difference between 2015 and now is $10 billion. "One of the things that I always want you to bear in mind is that when oil prices are at their highest, between 2010 and 2014 that was when we had the sharpest rise in debts." Continuing on the debt issue, Prof. Osinbajo said "the other thing that I want us to bear in mind is what is called debt to GDP. Our debt to GDP is one of the lowest among the countries that are frequently compared to us. Our debt to GDP is 20%. When you compare it to other countries, you will see that Ghana is about 68% whereas Ethiopia's is 48%. In terms of the size of our economy and debt, we are doing okay." He, however, agreed that "Nigeria may have an issue with debt to revenue", noting that "we are not collecting enough revenue compared to what we want to spend." "Are we collecting enough taxes? If you look at the FIRS figures, it says 914 Nigerians pay the self-assessed tax of more than N10 million. Of the 914, 912 live in Lagos and the other 2 live in Ogun state, no other Nigerian outside of Lagos and Ogun pay the self-assessed tax of more than N10 million. So, we are simply not collecting enough revenue," he added. 10 u t APRIL1 4 - 28, 2019 The Vice President said the Federal Government in collaboration with the States was working on harmonizing tax collections in order to address issues relating to multiple collections of taxes. He said: "this is a problem that we are dealing with all across Nigeria. It is one of the issues we are dealing with under the ease of doing business. We are addressing the sub-national. How we can harmonize taxes. The second phase of our ease of doing business is focused on the collection of multiple taxes; there is no reason why that should continue." On the ASUU strike, the Vice President said that government is engaging the leadership of the union, noting that "the next meeting is on Thursday, November 15, 2018." He, however, explained that "we are dealing with a population of about 200 million people who depend on a budget of about N8.6 trillion and of that amount, 70% of it goes to salaries and overheads, and it goes to less than 2 million people. It is impossible to answer to all of the monetary needs of people by the size of the federal budget." On healthcare financing, Prof. Osinbajo said the Buhari administration has done much even as it has earned 60% less than the previous administrations. According to him, "the first thing to bear in mind is that health care financing has suffered over the years even when we were earning the most money, we were underfunding healthcare. "In 2015 when we came in, the healthcare budget was N22.7 billion and as of today we moved that to N86.5 billion and we are earning 60% less. Education was N23 billion in 2015, now it is N102 billion. The issue really is one of government commitment. For the first time, in the 2018 budget, we are setting aside 1% of our consolidated revenue to the health sector." Earlier, the Ministers of Power, Works and Housing, Mr Babatunde Fashola; Industry, Trade and investment, Dr Okey Enelamah; Transportation, Mr Rotimi Amaechi; and Agriculture, Dr Audu Ogbe, responded separately to issues relating to their various ministries. The town hall meeting was organized by Act Now, a non-political group that works in promoting transparency and good governance as well as youth participation in governance. I N S I D E B U S I N E S S A F R I C A National Analysis THE MAGAZINE 0F THE CORPORATE WORLD Corporate crises Scandals suggest standards have slipped in corporate America Boeing, Goldman Sachs and Facebook are among the companies in hot water T wo things stand out about business in America today. One is how successful American firms are: they account for 57 of the world's 100 most valuable listed firms. The other is the bad smell hanging over a number of powerful companies. Boeing faces claims that it sold 737 max planes with dangerous software. It says it is "taking actions to fully ensure the safety of the 737 max". Criminal charges have been filed against Goldman Sachs in Malaysia for its role in arranging $6.5bn of debt for a state-run fund that engaged in fraud. Goldman says it is co-operating with investigators. A jury in California has just found that Monsanto failed to warn a customer that its weedkiller could, allegedly, cause cancer. Bayer, a German firm which bought Monsanto in June, says it will appeal the verdict. Wells Fargo, one of America's biggest banks, has admitted creating 3.5m unauthorised bank accounts. It says it is working to "rebuild trust with our stakeholders". Facebook is ensnared in scandals; its data practices have come under scrutiny in several countries. The firm says "we need a more active role for governments and regulators" (see article). Some 146m customers of Equifax, a credit-scoring firm, had their personal details stolen in 2017. It is being sued for negligence, according to its annual report. A recent document for its investors says protecting information is "our highest priority". Then there is the opioid epidemic, which involves not only Purdue Pharma, the maker of OxyContin, but also, according to a lawsuit by New York's attorney-general, other firms including McKesson and Johnson & Johnson. Purdue says it is "deeply concerned" about opioid addiction. Last year McKesson also said it is "deeply concerned" by the epidemic and that its board has "enhanced oversight procedures related to opioid distribution". Johnson & Johnson says it is "committed to ensuring its medicines are used correctly". It is tempting to view these cases as unrelated events caused by factors ranging from bad luck and human error to negligence and criminality. That would be a mistake. American firms seem to be more scandal-prone than their peers across the pond. The total market value of American firms involved in big incidents that have become public since 2016 is $1.54trn. At least 200m consumers have been affected. The figures are only $600bn and under 30m for European firms, including car makers that faked emissions tests and Nordic banks involved in money-laundering. t 43 u APRIL1 4 - 28, 2019 America is no stranger to corporate scandals. In the 19th century abattoirs sold rotten meat. In the 1960s Detroit made cars that were "unsafe at any speed", in the words of Ralph Nader, a consumer-rights crusader. In the 1990s tobacco and asbestos claims led to legal settlements that have cost shareholders over $150bn. Accounting scandals erupted at WorldCom, Enron and Tyco in the early 2000s, and by the mid-2000s mortgage fraud was endemic. Today's crises are diverse but have common elements. The firms tend to be established, with dominant market positions. Outrage infuses social media and Congress. And yet the financial cost has been limited. Take a sample of ten big American listed firms involved in controversial episodes: their median share price has lagged behind the stockmarket by a bearable 11% since the event, after adjusting for dividends. Although Boeing's shares have lost 8% since the crash in Ethiopia, they are above their level in January. The crises have caused bosses to stand down in only two of the ten cases: Wells Fargo and Equifax. Some adjustments to bosses' pay have been made. Goldman says that some ex-executives' share awards could be clawed back depending on the probe into the Malaysia incident. Equifax says cyber-security is now factored into its pay schemes. Nonetheless, for the ten firms the total pool of senior executive pay has risen over the four most recent years, to almost $600m, according to Bloomberg. For critics of capitalism none of this will be a surprise. They argue that firms controlled by private shareholders are especially unethical. Yet it is easy to poke holes in this. Volkwagen cheated on emissions tests even though it is part- owned by the German state and has workers on its board. Despite Sweden's cuddly "stakeholder" capitalism, Swedbank faces a criminal investigation for money-laundering. An alternative explanation is that American capitalism has got out of kilter. It has always been restless and dynamic. Companies test the boundaries of what is possible-and permissible. Tech firms are just the latest to "move u