The Tech giant founder and co-chair of the Bill and Melinda Gates Foundation, Bill Gates, has expressed concern over Nigeria’s economic stagnation, highlighting that the country’s debt surpassed 50% of its Gross Domestic Product (GDP) for the first time since 2001.

Gates spoke yesterday during the National Economic Council (NEC) meeting held at the State House, Abuja.

He pointed out that despite Gates Foundation’s significant investments in Nigeria running into over $2.8 billion, making it their largest commitment in Africa, Nigeria’s economic progress has been sluggish.

Recall that in June, the Tech giant (Microsoft) closed its Africa Centre for Development located in Nigeria due to unfriendly economic conditions.

The Center was established arising from a call for talented engineers to work on Artificial Intelligence, Machine Learning, and Mixed Reality, with the company committing to investing 100 million US dollars in the first five years of operation.

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In March 2022, it launched the centre in Nigeria, citing it in a $70 million edifice in Ikoyi, Lagos, known as Kings Towers.The structure is part of the over $200 million it announced to have expended to put up the African Development Center.

Gates noted that although the government has made challenging decisions, such as unifying the exchange rate, raising revenue remains a critical next step.

He said while paying taxes in Nigeria might be unpopular, citizens are more likely to support them if they see tangible improvements in their quality of life.

“Nigeria’s economy has stagnated. Earlier this year, your debt exceeded 50% of your GDP for the first time since 2001. Despite a slight increase in the revenue-to-GDP ratio, it remains lower than it was 15 years ago. Consequently, Nigeria spends less per capita on its people compared to other African nations with far less wealth,” Gates said.

The health sector was not left out as he noted global efforts which halved child mortality rates through investments in primary health care, and wondered why Nigeria still faces challenges.

He worried that 2.2 million Nigerian children have never received a vaccine, and the country spends only N3,000 per person annually on primary health care.

“Globally, we have halved child mortality rates through investments in routine immunization. Yet, in Nigeria, 2.2 million children remain unvaccinated. If children are not immunized against deadly diseases, it undermines other developmental efforts,” Gates added.

Bill gates urged Nigeria to adopt innovative crop varieties with shorter growing periods, higher yields, and better pest resistance to address the food crisis. Which suggests the GMO products associated with global concerns on the health of the consumers.

The Vice President, Kashim Shettima calls for stronger alliance to combat poverty. Stressing the need for a stronger alliance among government stakeholders and development partners to tackle poverty and improve the quality of life for Nigerians.

Speaking at the NEC meeting, Shettima emphasized the need for collaborative efforts to create an environment where all Nigerians can thrive.

He acknowledged the complexity of the challenges faced by the administration of President Bola Ahmed Tinubu and stressed the importance of both immediate and long-term solutions.

“Our commitment to alleviating poverty and enhancing the quality of life for all Nigerians will not succeed without unified efforts. We must build sustainable systems to empower our citizens and address both immediate needs and long-term goals,” Shettima said.

He commended Bill Gates and Alhaji Aliko Dangote for their significant contributions to Nigeria’s development, noting their investments in critical areas such as health, nutrition, agriculture, and education.

Shettima described them as key figures in Nigeria’s progress, acknowledging their unparalleled commitment to the nation’s welfare.

“Their philanthropy is not seasonal but a steadfast commitment that continues to shape our nation’s future. We did not survive the lowest points of our journey as a nation by the proactivity of the government alone; we did so because we remained partners in rain and sunshine,” he said.

By Omono Okonkwo

The Authority-Whether Nigeria will ever have stable and affordable electricity has been debated among stakeholders within and outside the country. Despite numerous efforts, the power sector in Nigeria remains highly deficient. Two primary reasons contribute to this ongoing issue: substantial debt in the value chain and insufficient infrastructure to meet the growing demand.

• High level of debit

The Nigerian power sector is burdened with long-standing or legacy debts incurred by operators over the years, which have not been fully paid despite several interventions. This financial strain hinders the sector from investing in necessary infrastructure and improvements. According to Energy Economist Dan D. Kunle, the sector needs a consistent supply of funding to expand the entire network, including generation, transmission, and distribution. However, this expansion cannot happen until the existing debts are cleared.

• Infrastructure deficiency

Nigeria’s infrastructure is currently inadequate to meet the rising electricity demand. As the population grows and more buildings and businesses are developed, the demand for power increases. Unfortunately, the infrastructure has not kept pace with this growth, even with alternative supply from renewables – leading to frequent power outages and unreliable electricity supply.

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• The cost of power

Kunle emphasizes that many Nigerians do not fully understand the cost-intensive nature of the power sector. He asserts that power will neither be available nor affordable until there is a widespread understanding of how the sector operates. While renewable energy sources like solar power offer some relief, they cannot rapidly develop a country like Nigeria, which still struggles with industrialized power access. Therefore, the focus must remain on expanding grid power through gas and hydropower.

• The importance of a looped electricity system

A reliable electricity distribution system is crucial for ensuring constant power supply. The simplest setup, a radial feed, delivers electricity through a single line.

If any part of this line fails, everyone connected to it loses power. In contrast, a loop feed, more reliable and commonly used in commercial and industrial areas, connects customers to a loop tied to the main power source at two points.

This setup allows electricity to flow in one direction, controlled by switches. If maintenance is needed or a fault occurs, the switches can be adjusted to change the direction of the electricity flow, ensuring that power still reaches customers through an alternate route.

Kunle suggests that adopting a loop system across Nigeria would prevent grid collapses. Prioritizing commercial clusters for a loop system would ensure that grid-connected businesses do not suffer losses from constant grid failures.

• Funding the power sector

The challenge remains: where will the funding come from? In April 2024, Nigeria’s Minister of Power, Adebayo Adelabu, stated that the country needs about $10 billion annually for ten years to fix the on-grid power sector.

Some stakeholders admit that extensive analysis and technical consultations have been conducted to understand the cost of fixing Nigeria’s power sector. Beyond financial investment, Nigerians must shift their mindsets and habits, especially those who believe that grid electricity should be free.

Access to power is not cheap and will never be cheap in Nigeria. Reliable electricity is integral to economic growth; without it, human capital cannot be fully harnessed.

• Clearing debts and ensuring compliance

For the sector to function efficiently, all operators need their debts cleared. Distribution companies (DisCos) require funding to invest in new and improved infrastructure, while the Transmission Company of Nigeria (TCN) needs liquidity to invest in the transmission network.

Bill payment defaulters must be removed from the network until they settle their debts, regardless of their status or influence. This strict enforcement is necessary to prevent further debt accumulation and ensure fair access to electricity.

• Overcoming socio-political barriers

Nigerians must look beyond religious and tribal differences when implementing policies to enable growth in the power sector. Unified efforts are essential to bring about the changes needed for a stable and affordable electricity supply.

(Mrs. Omono Okonkwo is Head of Operations for The Electricity Hub (TEH)

The economic downturn across Nigeria hits the Retail Supermarket Nigeria Limited (RSNL), owner of Shoprite, leading to the announced shutdown of its Wuse store located in Novare Wuse Central Mall, Abuja from 30 June, 2024.

Following the collapsing Nigeria’s economy and weakening country’s currency which led to high inflations, the company’s Chief Executive Officer, Folakemi Fadahunsi, said in a circular titled ‘Notification of Novare Wuse Central Mall, closure’ dated 21 June, that the decision was made after a thorough evaluation of the store’s financial situation and the current business climate in the country.

This latest development is coming about six months after Shoprite Mall in Kano shutdown operations in its branch from January 14, 2024.

In the same vein, the popular Kano mall revealed its decision to shutdown was informed by the financial difficulties and high production costs confronting business establishments in the country in a circular made available at the time.

It’s also a huge economic loss for the employees of Jumia Food as the owner announced decision to cease operation in Nigeria, citing growing economic challenges.

In the notice, ShopRite wrote:

“We regret to inform you that as of June 30, 2024, Retail Supermarkets Nigeria Limited will be closing its Wuse store located in Novare Wuse Central Mall, Abuja.

“This decision has been made after a thorough evaluation of the store’s financial situation and the current business climate. We believe this is the best course of action for our organisation’s long-term growth.

“We will no longer require your services for the Novare Wuse Central Mall Store.”

“If your services are specifically tied to the Novare Wuse Central Mall Store and if there is an outstanding balance between our companies, we will carefully review our accounting records over the next 60 days (about 2 months).

“We will then promptly contact you to confirm the amount owed and discuss a suitable payment schedule.

“We would like to express our gratitude for your past business. It has been a pleasure working with you and your team.

“If you have any questions or concerns, or if there is anything we can do to assist you during this challenging transition, please do not hesitate to reach out to us,” the company said.

Some of the staffs reacted to the announced shutdown of the business, citing economic losses, both for them and their dependents:

“They are supposed to tell us like a month or two as someone who works in their firm. But what they actually did was like telling us yesterday a week to the closure. And they told us that we only have one week, which to me, I don’t know for the others, is not right. Because they are supposed to give us one month’s notice.

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“We had a meeting yesterday but I was not in the meeting, but my colleagues actually spoke to the CEO and they said they are going to give us a package while laying us off. But the problem is we don’t know what the package is and they told us that they are going to close on 30 June.

“If we are not coming to work they will send us the package but what if that package is not going to be enough.

“Workers are part of a union that’s supposed to at least fight for their rights in the face of uncertainties. So, if by 30th nobody’s going to come to the store again and we don’t know the package that they are giving us. But definitely, I believe it is cash. They told us it is the economic situation that is making them close up.

“So, if it’s an economic situation they are supposed to transfer us to another store. And if you want to lay us off they are supposed to give us something tangible because like close to 100 persons will be without jobs. And most of us are married people. We are hoping to see what they will give us. That is what we are waiting for right now.”

Many Companies And Businesses That Exited Nigeria Based On Economic Downturn

Shockingly, outstanding number of firms in Nigeria recently, especially, multinationals, have outrightly shutdown operations, businesses and completely exited Nigeria.

Some of the companies chose to scale down operations, transferred ownership or sold their assets, stakes etc.

Diageo is one of them that sold its 58.02 per cent shareholding in Guinness Nigeria to Tolaram.

Shell shutdown operations and sold its assets in Nigeria, a development that was not foreseen or predicted decades ago.

The global Tech giant, Microsoft, shutdown it African Center for Development in Nigeria

PZ Cussons Nigeria PLC and Kimberly-Clerk Nigeria were not left out.

Unilever Nigeria PLC is not left out in the economic downturn.

Procter & Gamble Nigeria followed by GlaxoSmithKline Consumer Nigeria Ltd.

Sanofi-Aventis Nigeria Ltd also joined in the list alongside Equinox Nigeria.

Bolt Food & Jumia Food Nigeria shutdown business operations amongst others.

The anti economic policies of the Nigerian government has forced the country into fierce economic battles.

The impact of a persistent weakening Naira and the effect of the removal of petrol subsidy as well as skyrocketing power tariff prices, diesel and gas costs, which have more than doubled in the last one year of the current administration, have culminated in the high inflation and economic crunch ravaging the entire country.