Search

Square Pegs and Round Holes

The Population and Productivity Hack

Let me start by painting a scenario. Imagine that Shell Oil Company has 2000 employees living and working in a camp estate with their families, like we saw whilst growing up in Warri. The camp is then designed to handle a reasonable population in terms of municipal services like built infrastructure, medicals, recreation, security and education, etc.

 
Think what would happen when the reward system used in promoting and remunerating employees change. Imagine that they now make the population of each home to carry a weight thrice as much as the work output of the employee who is the head of that home as a measure for promotion? Basically, an employee gets more because he has more children. Though he still gets an increase based on his work output, but that’s only a third of what he gets from his size.

 
What do you think would happen in that work estate?

 
1]. People would struggle to outbreed one another and the population would keep shooting up

2]. The population count in each home would be subject to attempts at manipulation

3]. There would be mutual distrust, tensions and unhealthy clamouring

4]. Productivity would drop among the folks who still prefer keeping a sustainable size

5]. Municipal services would find it hard keeping up and even those who maintained common sense would suffer. A chain is only as strong as its weakest link.

6]. The company’s combined wealth would continue to drop, etc.

 
This is our situation today with the current revenue allocation formula to states. The incentive for IGR is about 10% while the one for population count is 30%. This also includes a 13% derivation to oil states not captured here.

 
Our current revenue allocation formula does not encourage productivity. When we speak about “structure”, this is one of the simple ones that keeps us up at night. We need to reverse this in a space of 15 years to population having 5% and IGR effort having 35%. We can do this by moving 5% sideways every 5 years until we arrive at that number.

 
If we do this, we would see states digging deep to explore their human and geographical resources for wealth generation and development. They would drive their own ease of doing business indices. We would have a fairer census figure and manipulation and political pressures would be less. We would see states champion family planning. Local political leaders (governors, HOA and LG) will also be better scrutinized by the electorate, rather than focusing on Abuja. Our collective national productivity and wealth will grow.

 
From 1947 till date, the revenue allocation formula between the tiers of government has been reviewed 12 times. This is 2017 and we are ripe for another one. Hopefully, as suggested here, we get one that turns our states into production rather than consumption centres.

 

 

SAN

King Abdullah of Jordan

The picture below depicts my summary of the series of events, circa Feb 2015, between Jordan and ISIS.

IMG_0104[1]

 

SAN

See more details on the badassrey of King Abdullah here.

 

World Peace

President Trump is at the Vatican visiting the Pope. He was also in Israel and Saudi Arabia all on this trip. His first foreign/diplomatic trip.
Why is he going around? These are important world leaders in these places. Why? Because they control religion. The major contending force in the world. The major cause of strife that seems to be unending and is threatening our civilization and collective way of life. There is also politics and a struggle for resources as seen in Israel, but a strong background of religion will prevent them from seeing things the same way.
You might argue that not all of them have the same impact on world peace. True. But they have one thing in common. A desire to be the only belief system. It is something that is clearly stated in their holy books. The followers are to convert everyone in the world to their belief and way of life . You will often hear boasts about how “our religion is growing”, even from those who will perish in hell for their individual life choices, according to the audit criteria of their religion.
What am I saying here?

Until the quest and struggle to have all the people of the world worship one supernatural being ends.

Until people learn to live and let live.

Until people stop to see themselves as forces of religious disruption in their societies, especially by using “all means”…, etc.

Until all these happen, there will never be peace in the world.
Hopefully these principalities can get their followers to have this understanding and do the needful in ensuring we all live in harmony.

 
SAN


PS

Over 20 teenagers were killed by a suicide bomber, recruited by ISIS, at the Manchester Arena, two days ago. Boko Haram suicide bombers continue to take lives in the NE of Nigeria.

My condolences to all those who grieve and the survivors who live with scars and trauma from these incidents.

Car wash aproko

Zee World is very loud on the TV and the proprietress, aka Madame Lolo, is fully engrossed in the love triangle of Gia, Sheika and his mother. They just found out Gia has only one kidney left while trying for IVF. The matter don tough and Madam Lolo is making gestures and moving her body, making the suffering plastic chair creak under her involuntary movements.

A patron is clearly irritated and tries for a spoil by asking for the channel to be changed to “news”.

Madam Lolo swings sharply in rebuke and then quickly softens into a friendly jab.

“Abeg sidan where you dey oga. Wetin? Na one beer and nkwobi wey you buy since morning naim you wan take change channel? Dem never wash your motor finish sef?”
Then she sees I’m quietly observing. I shift my gaze. Too late.
“Ehen, Oga, abi how you see am? Make we change the channel?”
I take one look at the madam and see her pleading/bullying gaze and then face my front and lift my glass up and say, with a deadpan gaze, “any channel is ok by me”.
Madam Lolo gives the patron a friendly victorious smirk. Matter settled.

Patron stares at me in some kind of rebuke.
Wetin concern me. Who patron epp? When Madam Lolo decides to punish me with extra bony goat meat pepper soup later, where will patron be?
Abegi!
Enjoy your work day folks.
SAN

Customer dada ni

All the government thieves from all the regions and states of the country helping the solution of Lagos and Ogun states with investments; We want to say thank you as you help our IGR and GDP.

We drive though Osborne, VI, GRA, Lekki, VGC, Nicon town, Cameroon upon Eti-Osa, LFTZ, Agbara and Ikeja industrial and we see the monies from your bankrupted states in action. Even the Rolls Royce and Range Rover Jaguar dealership in Cameroon, that we residents visit only for tourism, cannot keep up with your thirst. Luxury tax lobade! Saa baamu.
We shall continue to do everything to make ourselves the investment destination of choice.
The latest inflow of $3M, from a meningitis ravaged state full of sinners, is also welcome. We don bite our tax commot in multiple ways as usual. É lé ton si be. The tax shall continue through the life cycle of the investment.

Ema se pupo.

Customer dada ni 🎼🕺🏻.

 

SAN

Libya, their subsidy and Us 

This was written a year ago when the fuel subsidy debate threw up a comparison with Libya’s subsidies for their citizens.

_________________________________

I see a lot of welfarist arguments on FB that honestly do not stack up against the picture painted by available data. For example folks are speaking about the fact that Libya has cheap petrol for her citizens. This is a country with a population of just over six million people, with five domestic refineries producing refined products with an output twice their local consumption which makes them a net exporter of refined products for close to twenty years now.

Libya also has refinery and retail operations in Italy, Switzerland and Germany. Even as much of their refining operations have been hit by the war and its aftermath, they are still planning to build two new refineries within Libya and another in Egypt. 
How do you expect them to sell refined products for anything close to what Nigeria, a net importer with hardly a 30 day run in its refineries in recent time, sells for? How do you expect Nigeria to match Libya with subsidies for consumption of a product it does not make and that consumes a large chunk of her lean foreign exchange? We should only be subsidizing anything that encourages local production and creates employment. Why subsidize what only benefits the economies of the producing countries?
We should focus on the government’s plans to create incentive for local refining and associated industries, provide transportation infrastructure that reduces the pull on petrol, ensure the budgetary provision for social welfare gets to its target, strengthen its oversight functions on the industry and beam their diversification drive on industries rather than just raw materials and minerals export.   
Notice that I did not speak of oil? Petrol is not oil. We are not a petrol producing nation and we wont be that in another two years at least and the right product pricing framework is one of the things that’ll get us there.
SAN

Intellectual Property Stealing and the Creative Arts

I have always wanted to own paintings by an artist whom I will call Dom (for this write-up). Like several contemporary artists who are putting Nigeria on the visual arts world map, his works stand out and capture your attention. His colourful, fractured faces series using geometric shapes, super-imposed on the human form is nothing short of exceptional. But they cost a pretty penny and it comes with the territory. This one day, I was at a small art gallery to frame a new acquisition and I saw work that looked like Dom’s sitting at the corner like it was just brought in. It did not have the fine details in its finishing like I thought it should, coming from Dom. I asked the lady attending to me for the price. The amount she said immediately aroused suspicion. She then told me it was a knock-off. I made it clear to her I was not interested in such.

Just then, a gentleman walked in and the staff of the gallery greeted him with a lot of warmth. Seeing him dressed in polo shirt and jeans on a working day, told me he was a creative who controlled his own time. I said hello and the local curator told me, “Ehen, this is Mr. Dom whose artwork you have been asking us about”. Oh, OK. Pleasantries and compliments follow. I told him about the drama with the knock-off. He took one look at it and said with all equanimity, “Oh, I know about this young man. He goes about copying my work. I hear he is now based in Abuja. Don’t mind him”. I ask him why he does not go after the guy and he just shrugged and said “Our market is different. Those who buy my work will never speak with him or his types. So, let him enjoy…How many of them can I run after?”. I did not ask him what he felt about the gallery carrying the fake work, as I found it abnormal.

Now that is Dom, an accomplished artist with a lot of clout at the upper segment of the Nigerian art market, speaking. What about the up and coming who still get the product of their imagination and grueling effort, stolen by copycats and fakers? I am sure they will not share in his disposition. The music sector and Nollywood are some of the new areas where these fakers have now fully camped. We grew up seeing books from Onwubiko, Achebe, Soyinka and other writers, get faked and mass reprinted without permission in the 80s and 90s. Appropriate legislation did not come into being until much later. Even then, the enforcement leaves much to be desired.

Reading about Segun Adeniyi’s recent predicament at the hands of hackers, who broke the codes of his latest book’s – Against the Run of Play – online version and their accomplices who are indiscriminately sharing the book across different platforms, I am concerned for the future of the creative arts in Nigeria. What people should know is that piracy has the indirect effect of demotivating creativity. We will eventually see a reduction in the output from this sector and all of us will be the most affected. No one wants to be the monkey that works while several unknown baboons eat up their profits.

Do not receive or share what you did not properly purchase. It is stealing. Period!

 

SAN

BBOG and the new “Us”

 

So, I was jamming my naija playlist the other day and Ovuloria motioned to me saying it was too loud, as she picked a phone call. Meanwhile, there I was nodding my head to “Shitor ooo, Shitor”, my inner selfish kicked in and I motioned for her to move to kindly the other room. As the playlist progressed, it got to a tune I was not really feeling. After a minute or so, I made to reduce the volume, because I then felt the music was too loud. Just then I saw the next tune on the list. I did a fastforward to the comforting chant – “Heyyy Maleek Berry pon dis”. I suddenly needed more volume. As they say in Warri, I gave it belle and the room filled with more chants of …”too much juice, too much sauce…”. Hmmm…I nodded away as I sipped #15.

 

What you saw up there is classic human behavior. At times, the mood changes or situations change and that tune previously listened to and enjoyed at the same volume, becomes too loud and you instinctively drop the volume. Sometimes, it gets so bad that you fast forward or remove it from the playlist altogether.

 

This was what came to my mind today as I watched the ongoing BBOG anniversary program on ChannelsTV. As a sign of our collective hypocrisy, it did not take a few weeks into this administration for the same folks who saw this advocacy as a rallying point to expose the cluelessness and maybe even wickedness of the last administration, to now see them as meddlesome gnats. So much so that some “supporters” of this admin even went to one of the BBOG events to disrupt their march in a counter show of support.

 

My heart goes out to all the families who have been impacted by the insurgency in the North East. Thousands have been killed and hundreds abducted, including under-aged boys and girls who have been used as “wives” to terrorists and as trainee insurgents and suicide bombers.

 

While I commend the current administration for the work done so far in pushing the terrorists to the fringes, I would also advise that we need to put a strong focus on the root causes that give rise to extremism, terrorism and insurgency and makes this find an appealing place in the minds of our young ones in areas where this is prevalent.

 

 

SAN

 

 

The New Deal for Illegal Refineries

I am still keenly waiting for the details of government’s plan to absorb the illegal refineries operators into the mainstream. The VP is reported to have said “Our approach to that is that we must engage them (illegal refiners) by establishing modular refineries so that they can participate in legal refineries. We have recognized that young men must be properly engaged.”

I hope this is targeted more at the owners who established these refineries than the workers employed there? This is because what drives this is really illicit profit more than unemployment – and this is not saying unemployment is not a problem.

What I have picked up so far from news reports, is that there are plans for government to either build and partner or gather these folks into cooperatives and empower them to build and operate small capacity (1,000 bpd, etc.) type modular refineries.

Why this interests me is the following:

How do they plan to create incentive in this business?

Recall that the chief driver for this illegal activity is the combination of very low cost inputs and medium to high value outputs from:

  1. Free crude oil, ready market and poor enforcement by authorities.

So they basically get their “plant” crude oil feed for free.

  1. Simple operations.

What they do is a crude form of “Topping” or atmospheric distillation, with the aim of making diesel. They start by heating crude oil up to 350-400oC. This is done in two stages. The bottoms from the first stage is mostly bitumen. The distillate is moved to a next stage vessel and cooled to get diesel. The other by-products like fuel oils, gasses, jet fuel/kerosene and gas oils are not properly extracted and are disposed indiscriminately to the environment. Note that diesel is about 27-32% of crude oil types available in Nigeria. In a proper refinery, the next stages would be conversion and treating. These are quite complex steps involving different chemical processes, materials and equipment. This is where you’ll find scaled up refineries producing gasoline (petrol), LPG, etc.

  1. Proximity to crude.

They are usually sited a small distance from the pipeline where the oil is stolen from. So, no real transport cost.

  1. The absence of controls and standards.

It costs money to abide by product, operational, environmental and basic chemical industry process safety standards

  1. No taxes to government.

I suppose they can still get greenfield tax incentives for 5 years, per the regulations when they now go legal. So, this is a soft one.

  1. “Irregular” employment practices….and that is being modest.

These guys run as a cartel with a local strong man overseeing things. Nobody dey strike o. You don’t like the conditions – you leave. But I hear the money is not bad.

All these help to lower cost of operations a great deal and maximize profit.

*Note that refineries’ profits are determined by size and complexity, crude type and product slate, logistics, operational efficiency and regulatory environment. Generally, their margins run from minus (-ive) to 18% with 11-13% being the average for North America. I have not been able to gather data in Nigeria to determine how we have run in the past, for reasons of not having profit driven refining operations.

Conclusion

Whatever partnership, help, subsidies/loans and waivers the FG intends to give these operators, I don’t see how health, safety, environmental and product quality standards can be lowered. So, that element of operational cost will still be there to “temper” profit margins. Hopefully, government will still find a way to create incentive for this plan to work, regardless. I trust that they have enough people in the policy space of this sector, who understand the problem and can proffer solutions and advice on implementation.

All in all, reaching out in an inclusive manner in trying to solve this problem, in a win-win manner, is a good initiative.

I hope for the best in its implementation.

SAN

 

Additional reading

  1. http://sweetcrudereports.com/2017/02/15/nigeria-govt-to-work-with-illegal-oil-refiners-osinbajo/
  2. http://venturesafrica.com/federal-government-decides-to-work-with-illegal-oil-refiners/

Create a free website or blog at WordPress.com.

Up ↑