Saving Igbo and the Ahia Ngwugwu Theory

Many of the world’s more than 6,500 languages have been classified as endangered. As globalization crystallizes, language endangerment has become a serious problem facing nations.

Recent UNESCO studies project that the Igbo language could go extinct in the next 50 years, as the number of active speakers continues to decrease due to diverse and interrelated socio-linguistic factors. One way to help the Igbo language survive is through the Igbonization project.

Many contributors to this thinking have suggested more egalitarian democratic approach through which everyone has freedom to bring something to the table. For example, I have noticed contributions where the Igbo people and language are being juxtaposed in an Israelisation or should I say ‘Jewdaic’ paradigm.

While I do not challenge this view, however, we must be careful not to allow adoption of unconfirmed morphological and/or quasi-historical process to further endanger an already endangered language.

I have also read Igwe and Aito (2011), who examined igbonization as a process of lexical creativity. I respect what they achieved, particularly their work led to Microsoft republishing the Igbo Style Guide for product localization, in which technical terms in the field of informatics have been derived by subjecting English language terms to minor pronunciation and orthographical changes to adapt to Igbo language phonetic patterns.

My contribution to the survival of the Igbo language until date has been my ‘versucht’ to mainstream theory development, one of which is the development of ‘The Ahia Ngwugwu Theory (TAN) in relation to technological innovation.

The ‘Ahia ngwugwu’ theory follow a number of market interaction theories that are being used to explain the buyer-seller relationship in a free market economy. For example the theory of design hierarchies, which examines the interaction between product design ‘look and feel’, and buyer decision-making & choices; also some neoclassical theories that can predict accurately how customers act in well-functioning market place, invoking psychological feelings and levels of customer experience when making purchasing decisions.

The Ahia Ngwugwu theory premises on purchasing packaged good, with its resultant unknown, risk, and uncertainty. TAN can be viewed as an extension of three competing concepts, the unknown, the uncertainty, and the risk behaviour.

The issue is that one has to deal with the uncertainty that the unknown is ‘pregnant’, and buying a packed good brings some level of risk taking, because the ‘pregnancy’ of the unknown gives a statistical head or tail result.

While the Igbo sees the result of the ‘unknown’ as luck, or the activities of terrestrial invisible beings (ndi mmuo), I conjure that the result is preprogrammed by economic agents. Whether those who packaged the products without putting expiration dates, or the retailer who kept the product for so long on the shelve without recourse to potential expiration date.

There are two ways to understand the activities of economic agents. First, products that have been intentionally brought to the market after they have passed expiration date, will certainly produce negative results, even when the customer doesn’t know it.

Second, products that have tendency to expire ‘at will’ should be sold unpackaged, because it’s ethically wrong to mislead consumers to invest in rot. Of course we know that profit is the singular goal of capitalism and in some economies, ethics and customer care do not come to fore.

The Ahia ngwugwu theory is a basic concept that underlie our choice in the marketplace.The nature of its evolutionary process has implications for the dynamics of competition and the management of market innovation.

This is a new intellectual paradigm based on an established Igbo notion. The intellectual property is at early stage, but several market solutions that make economic sense are being projected in the light of the TAN theory, e.g. a product quality scanner, so not much can currently be revealed.

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Recession, economic bubble and Nigeria

Nigeria is officially in recession. The simplest way to know an economy has fallen into recession is if macroeconomic indicators fall. Some of those macroeconomic indicators are real gross domestic product (GDP), real income, employment, industrial production, wholesale-retail sales, etc. These indicators provide insight into the economic performance of a particular country or region, and therefore can have a significant impact on the forex market.

In economic terms, a recession is a negative economic growth for two consecutive quarters. It is also a business cycle contraction, which results in a general slowdown in economic activity; the latter is the case with Nigeria, as it’s now experiencing a general slowdown in economic activities.

A number of factors contribute to an economy’s fall into a recession, but the main cause is inflation. Inflation refers to a general rise in the prices of goods and services over a period of time. In Nigeria for example inflation has risen from 8.9% in January 2015 to 17.10% in August 2016. What this means in reality is that the price of basic commodities are sharply going high, e.g. tomatoe, rice, garri and ugu.

Inflation can happen for many reasons, but the main reason is the excess of demand over supply. In other words inflation cannot occur, unless there is excess demand, made effective by increases in the money supply or purchasing power. Strange though how all these work together leading to recession is bizzare, and that’s why one needs good technical knowledge to understand it.

Let me explain a bit. In an economy when inflation sets in, people tend to cut out on leisure spending, reduce overall spending and begin to save more. But as individuals and businesses curtail expenditures in an effort to trim costs, this causes GDP to decline. So that’s why I said it’s strange. So actually what people should be doing during recession is spending more, but in real terms people cut spending, and the combination of spending cut, high price, loss of jobs, etc cause GDP to decline,aand economy to begin to contract and recession to set in.

In the last ten years, more countries have fallen into recession than ever before, but almost all these countries have managed to cope and eventually get out of recession. A good example is the UK economy 2008/2009; for about 1 year 3 months UK was in full blown recession. Many sectors were affected including banks and investment firms, with many well known and established businesses having to fold. Manufacturing output declined by 7%, while the unemployment rate rose to about 8.3% (2.68m people).

There were well known causes of the 2008/2009 UK recession including the late 2000s financial crisis, rising global commodity prices, subprime mortgage crisis infiltrating the British banking sector, and significant credit crunch. So, like I mentioned earlier, many people chasing small amount of jobs, chasing small amount of products, and then income coming down all that trigger high prices, leading to inflation, which then leads to an economy contracting, and then falling into recession.

The causes of Nigeria’s current recession are speculative, however they are both historical and immediate. Historical can be summed into poor economic policy direction, including corruption and the lack of political will to save and invest in infrastructure by past governments.

In terms of immediate factors, two years ago, Nigeria was heading to become a global top 20 economy, strong with well informed economic management modelling. However, in just under one year Nigeria has a reversal of fortune, those economic gains withered, triggered by an adverse demand shock and widespread drop in spending.

Here is the reason – if you do not sustain economic management for two consecutive quarters; if you do not have an economic team working as hard as possible in a fast growing economy, the result is simple, you are going to fall into recession, simple. Buhari’s long wait for nine months before forming a government has proved just too costly.

So the recession in Nigeria can be linked to a number of events, namely, the central bank creating an unnecessary financial crisis in the banking and forex sector, which  caused an adverse supply shock. The government jettisoning some of the forward looking economic programmes of the past administrations was not wise. And, more importantly, the timing of democratic change of government did not favour the economic climate, given the interregnum in economic management that existed between the GEJ era and the Buhari era. These are further exacerbating by other factors, including  rising political unrest in parts of the country, the global fall in oil prices, which caused an external trade shock, as Nigeria hugely relies on oil for larger part of its national earnings. All these combine to create an economic bubble.

While recession is unhealthy for any economy, and could have been avoided in the case of Nigeria, the country can still get out of the recession situation with well articulated economic and fiscal policy measures. I’m not sure they can though, given the poor record of the present government in making any impact on economic gains. But if they want to try, those measures must be collective from local, state, and national governments, and all the arms of government.

One thing Nigeria must do is to clearly understand and analyse the real cause of the recession, and then set out stringent measures to address it.

I think there needs to be some kind of emergency ‘interventionary’ measure that prohibits any agency of government (federal, state to local government, legislators, and executives) to not use public money unnecessarily.

Having said that, it’s important to explore a number of expansionary macroeconomic policies that prioritise investment in infrastructure, improving banks capacity to lend, increasing wage and household income, to get money circulating in the economy, and total devaluation to get the economy going again.

How not to do this, is alienating any part of the country. Nigeria needs full-on capital investment projects going on across board, and it needs to borrow now to do this now. It needs to learn from Canada, right away, to improve investor confidence.
In terms of increasing liquid money in circulation, what the UK did well in the 2008/2009 recession was quantitative easing, whereby money was artificially created to buy financial assets to increase bank reserves and to encourage lending again. The other was lowering interest rate to encourage spending, not just saving. Liquidity flow is now very much needed. This is a failure of Buhari’s off the counter forex policy.

To boost household spending, income and wage need to go high in response to currency devaluation, as a stimulus, to household suffering, and to get more money in circulation. N18,000 minimum wage in an economy where a bag of rice costs N26,000 is not only daft, but also insensitive. I will discourage any austerity measure being taken forward.

Again, many commentators have emphasised the need for currency devaluation, this has to happen completely, not partially as it is being done now. Devaluation can promote domestic demand, and exports will become cheaper and imports more expensive within Nigeria.

One action to take is #BuyNaijaToGrowNaija, but the idea of bringing Chinese Yen to overcome dollar demands is absolute bunkers, and indeed chasing shadows.

Finally, how to shape an economy is to create it. Nigeria needs to create an entrepreneurial economy, supporting SMEs and new start ups. They are the engine that will get the economy out of this mess. There is evidence that many major global corporations started during the period of recession. If anything it’s time to bring back the youth enterprise programmes of the past administration. They were sensible. Don’t throw away dirty water with your baby inside.

Iyke is an Economic Development expert in Edinburgh, Scotland

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Nigeria: Dutch disease, and a free fall economy

This blog is not about president Buhari, it’s about resourcing and managing public goods in Nigeria.  I’m now used to this disclaimer whenever I comment on salient economic issues in Nigeria, because certain set of people who used to appreciate my write ups under the administrations of Obasanjo, Yar’adua, and Jonathan as enriching intellectual contributions, now view them from an ethnic posturing, given my Igbo background. So, it’s now necessary to append a disclaimer, to clarify that I’m no way a Buhari fan, but my criticisms are nowhere due to my ethnicity. For me, Buhari is part of the problem, not the solution. Military regimes, Buhari’s inclusive raped Nigeria of hope and stability.

Let me start as a lay person would on this topic. The idea of Dutch disease is the negative impact on an economy of anything that gives rise to a sharp inflow of foreign currency, such as the discovery of large oil reserves. The currency inflows lead to currency appreciation, making the other products less price competitive on the export market.

Elsewhere there have been calls to diversify the Nigerian economy to overcome such effects. I submit that the Nigerian economy was long diversified. What it hasn’t done consistently is institutionalising prudent management of resources, and adopting an enterprising state model, which is a no brainer for a one-sector economy like Nigeria. A one-sector economy is one that earns the bulk of its revenue funding from one sector. It doesn’t mean it’s not diversified, it just means that the other sectors are not competitive enough. You would need to invest heavily in these other sectors to move away from a one-sector economy.

The term Dutch disease was first coined in by the Economist group, publishers of the economist magazine in 1977 to explain the decline of the manufacturing sector in the Netherlands, after the discovery of the 1959 large Groningen natural gas reserve, which resulted in the nation’s other exports becoming more expensive and less competitive in the international market.

From a development perspective, Dutch disease is the apparent causal relationship between the increase in the economic development of a specific sector and a decline in other sectors of the economy. The putative mechanism is that as revenues increase in the growing sector, the given nation’s currency appreciates compared to currencies of other nations; manifest in the exchange rate.

This was the case with Nigeria, during the 1970s oil boom. Even the naira was stronger than the dollar. As oil brought an unimaginable size of rent, Murtala Mohammed and those that followed him began a spending spree, creating ginormous projects, and borrowing billions of dollars to finanace them, projecting more oil revenues to pay back quickly. Such a grand scale of borrowing proved dismal for a one-sector economy.

So as the world oil prices nosedived in the 80s, solution would have been a sound economic and monetary policy to address the fall through, rather Nigeria was unlucky, as the army jumped on the bandwagon of leadership with coups and counter coups diverting attention from the real issues.

For example, under Babangida, domestic inflation became so high that even basic food stuffs were unaffordable; but he invested in building an elite city Abuja, which was at the time very unnecessary. At the point that Nigeria owed debts in all corners of the world, and was advised by both the World Bank and IMF to cut their excesses.

The thing is whether it was structural adjustment programme, green revolution or war against indiscipline. The army were not trained to manage economy. They lacked the competency to make a cumulative sustainable progress both in political governance and economic management. They may achieve instantaneous wins, like any ‘woof woof, will bark, but economic management is neither reactive nor an instantaneous project.

I do in many ways sympathise with President Buhari, as he remembers the good old days of Nigeria, and he dreams of rematching it, and ‘make the dollar equals one Naira’ forgetting it’s no more ‘uhuru’.

Dutch disease is not only in reference to natural resource discovery; it can also refer to “any development that results in a large inflow of foreign currency, e.g. diaspora remittances, surge in natural resource prices, foreign assistance, and/or foreign direct investment. These are all counterproductive to growing strong domestic base, if no smart policy isn’t pursued.

Closing up Nigeria’s economic potholes should have started in the 70s. It’s not impossible today, but to do that in the 21st century, you would need astute and selfless technocrats to manage state resource, not career politicians, who are bent to steal everything penny they see in the treasury, or the army for that matter. You also need to plan and keep ‘bettering’ as you go along.

It’s important to note that Nigeria’s economy did not start free falling today. If the last 15 or 16 years of civilian rule have been tumultuous, current fiscal ‘wrestlemaniac’ isn’t the way forward. In fact, it is dangerous. Nigeria should let market work for itself.

Nigeria’s government does not have the prerogative of ‘holding the knife and yam at the same time’. While Nigeria has got the yam, it does not own the knife to slice it, unfortunately. The international market has numerous players, even with stronger influence and interest. Nigeria can only rely on two possibilities for growth. One is prudent resource management and the other is enterprise state model.

The framework for prudent resource management is about savings and investment given current resource realities. Best practice would be the Norwegian model, where specific percentage of oil revenue are invested in other sectors, e.g. fish farming and renewables. So that Norway is not only the highest fish exporting country in the world, but it has transformed itself as leader in the renewables sector.

The so called ‘trash to cash’ model has transformed waste energy as a high value commodity through incineration technology. The UK alone paid millions for thousands of tonnes of household waste to be sent to Norway, while Norway incinerate and convert them to instant reusable energy, which they sell to earn more money. Smart, isn’t it? This is what is referred to as prudence resource management.

Prudent resource management is far from the fire brigade approach in Nigeria, where it’s all about resource sharing, and consumption, not savings and investment. It’s no brainer that development has always been modelled behind resources accumulation, savings, and investment, and best practices abound across the globe.

The other possibility for Nigeria is what I’ve referred to as enterprise state model. This is necessary in tackling the infrastructure and public services challenge facing Nigeria. An enterprising state model entails exploiting the opportunities available to government to address social problems, while maximising the income potential. Many countries in the world own high value enterprises, but why can’t government of Nigeria or the state governments for example use some part of the revenue allocation they receive monthly to build industries, factories, recreation businesses, etc?

What is wrong with federal or state governments owning a cement factory, or farms across the country, generating extra income to run the affairs of state? With the level of resource controlled by federal government in Nigeria, it can really exploit new income streams by running businesses in parallel with private sector, particularly at the current state of things. Perhaps these businesses can go into private buy outs in the long run, when there are no more restrictive factors.

The people and government in Nigeria must recognise that present realities are not only disturbing, they are dangerous. The over reliance on oil for dollar needs is unsustainable. It might just mean that the free fall has arrived, if we continue with this lip service.

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Towards the development of an industry cluster in Aba – steps for an easy win

Recent calls for the Federal Government of Nigeria to support the establishment of an industry cluster in Aba, is by no means out of place. Aba is a model metropolis, boosting arrays of opportunity, untapped talents and economic potentials. There are many reasons to be upbeat for an industry cluster in Aba. We know that industry clusters fuel economic growth, firms located in clusters are potentially more productive compared to other firms because of the agglomeration advantages ( e.g. networks, knowledge spillovers, human capital mobility, etc). Also, Aba has a municipality advantage, ranging from increased property and asset values, increased revenue generating capacity, and skilled work force.

Since it was first proposed in the1990s by Harvard professor, Michael Porter, governments across the globe have turned to cluster initiatives to stimulate urban economic growth. This is because a standard cluster economy models a synergy, a dynamic relationship, and a network between not only the businesses that make up the cluster, but also the successful partnering of interest groups and stakeholders – governments, research hubs, enterprise agencies, and the investor community for the purpose of wealth creation.

Nigeria needs to be doing sometime to attract investors, and a cluster is one of such magnates. In this article, I look at the benefits, and challenges of developing an industry cluster, and propose specific conditions necessary for establishing one in Aba.

Development experts view industry cluster as a converge of collaborating similar and related firm groups in a defined geographic area, usually to share common markets, technologies and worker skill needs. Two factors come to mind, when thinking about how cluster benefits an economy, particularly in the case of Aba.

First, industry clusters have the potential to motivate a start-up revolution by encouraging new generation of entrepreneurs to develop a taste for owning their own business, thus growing the national economy.

Second is the idea of serendipity economy, which offers a new lens in the way we view economic development. Urban centres where talents converge do not only give a facelift to place, but the cross-pollination of talent and innovation in hub proximity has now become an ideal strategy for sustainable regional economic growth. Enterprise hubs are established to support innovation generation. Innovation generation in itself is the most valuable asset of the future.

Aba, therefore, is more than a start-up ecosystem. Aba’s economic potential has to be rightly placed. The city had once been, and could even further become ‘a congregate of innovation’ and a hub for enterprise in Nigeria.

The benefits of industry clusters illustrate why place still matters in the global economy. However, experience shows that establishing one comes with more challenges. For example, lack of investment funding is a major stumbling block for regions aiming to leverage the agglomeration advantage of clusters, as industry clusters do not only survive by public goodwill.

And, while cluster initiatives can potentially transform local economies, investors often see such as high risk propositions, except where there is willingness for public private partnership (PPP).
Further, local communities may challenge the idea of siting clusters close to their area, and may campaign vehemently to frustrate the idea, or might even refuse to make land available, even when investors are ready to take the risk.

It’s also true that industry practitioners may not want to move from their ‘current’ location to a new cluster site, if the plan is to develop the cluster in a new location. They tend to altruistically connect with place, notwithstanding commercial disadvantage.

Worse still, the dynamics of local politics can play against a cluster initiative, particularly, if the ruling party does not command clear majority in parliament, or do not belong to mainstream power. In such case, politicians may deliberately work to stomper cluster projects to score points. The role of government is to provide a safe passage, to assuage the various competing interests, and to seek united effort.

With years of experience in delivering cluster projects, backed by international evidence, five important steps can be taken to establish an industry cluster in Aba, and to attract the right investors and stakeholders to the initiative.

One, while annotated evidence suggests an industrial cluster may suit a city like Aba, a thorough understanding and analysis of the local economy, structure, opportunities, current situation and foreseen challenges is crucial. Any investor being approached would want to see a concise and clear print of opportunities and challenges. But also such document would help target the wealth creating sectors, and prioritise support where it is most needed.

Two, the cluster concept represents a new way of thinking about how an economy is grown, and signifies new roles for government and business. But emerging clusters are technology driven in terms of functionality. They do less with manpower. Hence, a cluster project must be supported with an innovation centre, strong intellectual capital, and state of the art technology.

Three, for a cluster initiative to gain quick wins, it must have the right human resources. As often said, the people that lead a cluster initiative are as good and enterprising as the project itself. Aba can learn from the City of Edinburgh in this area. The city’s industry clusters now has over £4billion turnover , combining successes with the Interspace group, Edinburgh Science Triangle, Bioquarters, and new developments in Leith Creative Exchange. None of these would have been possible without the right people in charge.

For example do they have the capacity, broad knowledge, and contacts, to attract the right investors? To identify and negotiate financing rounds, etc. These are factors that must be carefully weighed. A cluster development team are no political appointees; they are a syndicate of experts with exceptional competency in cluster development and management. They create the plan, raise the funds and deliver the project. The new Abia State Economic Advancement Team (ABSEAT) should at least have people with some of these capacities, even in advisory role.

Four, while an industry cluster can be a ready-made proposition that appeals to international investors, it has to literally make a bold statement for investors to take it seriously. If there is no agreement for a broad shaped future, obviously the cluster will find it difficult to attract the right investors. Usually industry clusters have long term goals, and investors would want to know from the onset how long it will take to turn their investments into profit. This is where an experienced cluster development and management consortium comes handy.

Five, and perhaps the most crucial in establishing an industry cluster, is separating the cluster initiative from political influence. Setting up an industry cluster as an independent enterprise is ideal to facilitate self-funding, but also to allow the project to get on. Quite clearly, government’s role is to provide the enabling environment and initial funds to get the project up to a good start. The longer term plan should see public finance play less role in funding such initiative.

It is absolutely true that Abia State will need capacity to deliver a world class industry cluster in Aba, which can be further enhanced by support from the Federal Government of Nigeria. Since the coming of the new government, a lot of goodwill now exists both from experts in Diasporas and those at home. Abia State needs to tap into this goodwill, to develop a financial package for an industry cluster in Aba.

(Iyke Ikegwuonu is a development expert in Edinburgh Scotland, and has supported development of some of the leading global industry cluster projects. Follow me on Twitter @yekaka)

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