Sunday, October 16, 2011

Money News that is just a bit new: YouWIN, the misunderstood subsidy, Naira to strengthen, and the World bank cares.

At least the administration is listening. There is a government plan to tackle unemployment through entrepreneurial development. It has a name: YouWIN - Youth Enterprise With Innovation In Nigeria.
Will it have teeth? I need money now, actually like 6 months ago for my "business" - my new book. How can I WIN?
I've witnessed a business plan program similar to the one proposed by YouWIN - it featured a week of all-day classes at a Lagos Business School affiliate, then a business plan competition. It was tastefully sponsored by people of NLI. They kept it simple, and awarded capital - yeah baby - to three top business plans. (all about the NLI Business Plan Competition here)

Since the best academic writers don't always have the most business sense, a program like YouWIN may not reliably create strong businesses directly from the winning business plans.
However, it will indirectly create a culture of enterprise: as ideas meet, good people partner, add focused training, serve seed money to help people TRY.  Yes, they will likely, and crucially, fail. But it is still very good to spend money in this way - people will start devoting their time and energy to good business, and this builds their business/entrepreneurship muscles.
The secret of Stanford (a university and frequent high-tech incubator) is not more than that. 

My advice on YouWIN: Keep it simple.  Use good people (like me; pay me so I can make small money to produce my new book) not people who will mess up the whole thing by being backward and greedy.  Also keep this as the big book version but let us create the "illiterate" version that can reach more people. Oya, let me go and apply.

The Petroleum Subsidy Brouhaha
The reason to remove the subsidy is to remove the perverse incentive to import and deal in oil; and hopefully to create incentives to produce and trade in better things.
The subsidy will be removed if we must move forward.  This is not to trivialize what a political minefield it is to suddenly raise living costs on the majority of people.  Such would be bad for society and the economy as well.  What is the plan to
1. cushion any shocks and unintended consequences e.g. high food, fuel, and transport prices
2. communicate love and care to the masses who will feel cheated and abandoned?

Clearly, the idea of shaping the incentive function (I'm an engineer/math person) is not one that the masses would easily wrap their minds around.  Nduka Obiagbena and Wale Tinubu, among the business leaders supporting the removal of the subsidy, support it for the wrong reason because they are not very analytical.   Aliko Dangote, who also supports removing the subsidy, shows why he is more intelligent than many business leaders in Nigeria.  He understands that it is not the spending on subsidy that is the problem, but the system this creates.

In the grand scheme of things, the amount spent on the subsidy is paltry.  James Ibori alone could pay it for a few years from his loot, not voluntarily of course.  The subsidy should go, but not because of the money spent on it, not even because of the alternative uses that money could be spent on, but because it entrenches a system of importing oil products.  When you subsidize something, it means you are trying to make more of it.  When you subsidize oil imports, it means you are assisting the business of oil importers to make it stronger.  This is why we can not have electricity (we need generators to continue to consume the diesel) and why we can not have trains (we need more cars to continue to burn petrol.)  

My advice on petroleum subsidy: Understand if/why the subsidy must be removed.  Explain this to people.  Devote ten times more money to another new people-oriented program and communicate what the disappeared subsidy money was spent on.  Proceed with caution, even if you think you are right. 

Sanusi believes the Naira will strengthen
In other news, the Naira still manages to weaken against the US dollar.  How is it possible that even with the US in recession and crisis, their currency is still beating ours up?

Money for Power
The World Bank and the International Finance Corporation are to organize an Alternative Energy Expo to find a way forward for energy/electricity in Nigeria. This is new. I'd never heard of our electricity being "their" problem before.
What this forum - Lighting Africa - is doing is to try and make the latest lighting technology accessible to the hundreds of millions in Africa's un-electrified rural communities and replace kerosene as a lighting source by solar and other clean sources."
Abeg, come and invest.

Advertisement: Read my books.


DonCasiragi said...

Lady T, make sure you send my cut of your business planning earnings my way

Just released, 10.3 million Nigerians unemployed and I know the real figures are four times that..the FGN better start paying attention to entrepreneurship, and not the wuru wuru type aka. KEKE NAPEP.

Per the subsidy issue, I do not think folks are just up in arms against the thing because they don't understand the culture you speak of; but they also understand that a government that is not investing any brain matter to ensure local production of electricity talk less of refined petroleum products is simply throwing them to the dogs of capitalism by removing the only benefit they get while keeping more for the ruling class to steal. Simply put, when the trust system between the government and the governed is broken, no policy explanations will suffice. That said, the road to misery is often paved with good intentions. I don't trust the pro-subsidy removal crowd either.

There are various ways to achieve artificial low prices, which Nigerians deem a birthright (and why not? even non-oil producing nations that are poorer, subsidize), while ensuring local production. I laid out a plan in my latest article on this:

Our government is just not thinking plus they are in the pockets of money bags. If Jonathan is sincere, why didn't he campaign on the platform of removing subsidies? Did we vote for that or am I missing something?

t said...

Lol @ Keke NAPEP. Truth is it gave ppl jobs. (It was also a route for corruption for some ppl, who are still walking free.)
Before I go check out your other article, yes, I agree about SOME lack of trust. Nigerians can not rest, they must be extremely vigilant. On campaign platform, I think the GEJ campaign was air and PR so no surprises that he had to start testing out policy ideas only after winning. We can move on from that realization...he's the President now, time to get electricity and kick corruption best as we can in the next 3+ years, with his co-operation, which we'll force if need be.

t said...

Step 2: Some people actually got chosen to move on to the next step in the selection process. It includes some business training. Kudos!
YouWIN is moving along fine, it seems. Any contrary reports? Please write something (or forever hold your peace)

t said...

Very alike:
The Misunderstood Fuel Subsidy, More:
The reason to remove the subsidy is to remove the perverse incentive to import and deal in oil; and hopefully to create incentives to produce and trade in better things.

AgogoDavid on why he supports...
which closes with "Well, give the government a chance if you like… but remember, life is hard on the cynic and confusing for the skeptic. The behemoth of corruption will be with us for a while yet, lets get the invisible hand on our side in the war!"

Previously on UpNaira