One hundred and sixty seven days after taking the rein of Nigeria’s political leadership, Nigerians are still awaiting President Bola Ahmed Tinubu’s magic wand to boost local production of goods as well as their consumption and save the country from the seemingly endless foreign exchange crisis that has pushed inflation rate to 27.33 per cent and put the country’s economy in tatters.

Although the President pledged to embark on thorough house cleaning towards revamping the economy from the day he assumed office, businesses, workers and the general populace in the country are currently undergoing extreme hardship as a result of his administration’s economic policies, signposted mainly by the removal of petrol subsidy and unification of the foreign exchange market.

With Nigeria relying heavily on imports to meet the petroleum needs of the country and also to ensure the availability of different food items for its over 200 million population, these two policies have put many businesses and families in dire straits that only a well thought-out government intervention can ameliorate.

Although governments can stimulate local production and encourage consumption of local products through various policies, such as providing financial incentives, promoting awareness campaigns and implementing trade barriers, Nigerians are still waiting to see the route the Tinubu administration is headed.

Experts, who spoke with The Guardian, said government has a lot of options to thinker with such as providing tax breaks and subsidies or low-interest loans to local businesses engaged in production.

According to them, this can make it more cost-effective for them to operate and compete with imported goods.

They added that government could also invest in infrastructure like transportation, energy and logistics to improve efficiency of local production and distribution networks, stressing that it can also choose to implement trade policies, which protect local industries, such as tariffs on certain imported goods, to create a level playing field for domestic producers.

And rather than buying vehicles and other official equipment from foreign countries, the experts urged government to prioritise local products in its procurement by ensuring that public institutions support domestic industries.

They also canvassed partnerships with the private sector to create initiatives that support local production and consumption and assist local businesses in accessing markets, both domestic and international, through trade agreements and export promotion programmes.

They maintained that by implementing a comprehensive strategy that combines these elements, the Nigerian government could create an environment conducive to the growth of local industries and the increased consumption of locally produced goods.

They also underscored the need to build sustainable infrastructure that would stimulate the production of goods and services for export and local consumption, insisting that Nigeria needs to identify its areas of strength and take advantage of the opportunities therein.

While agreeing that it is good for the country to produce what it consumes and consume what it produces, they noted that good economic management is not only about what you consume but also about what you produce for others to consume.

Citing many advanced economies, they noted that their growth is propelled by not just producing for themselves, but also for others to buy.

“Even if it is only one or two products that you are very strong in and you can feed the world with it, you will not have challenges importing whatever you need to import because you make so much money from exporting your products that whatever you import may not matter that much,” said the Chief Executive Officer (CEO) of the Centre for the Promotion of Private Enterprise (CPPE), Dr. Muda Yusuf.

He said there are countries that even import the water they drink but they don’t have issues because they also have other products they are offering the world.

“It is not bad to import; what is important is that you should export more than you are importing. There are bigger opportunities globally than you have domestically. For you to be able to take advantage of the global opportunities, you must understand where your strength is. You cannot have strength in everything; you look at your strength and whatever your strength is, you capitalise on it to export in such a way that you have a healthy balance of payment position so that things you don’t have strength in, you can import them,” he noted.

He stated that the starting point for Nigeria as a country is to first identify its strength and concentrate on it.

“We have strength in oil and gas; we have messed it up. Look at the Middle Eastern countries; what brought them to that position is their oil and gas. They attract investments and they maximise all the opportunities there. What did we do with our own? Look at the huge market we have for gas; we have more gas than crude oil. What did we do with it? We are flaring the gas; we are not attracting investors. Gas alone can pay off our import bill conveniently. We messed all these up both as a result of policy problems, insecurity and corruption,” he said.

He added that Nigeria also has strength in agriculture, but has not taken advantage of it because the infrastructure to fully tap into the potential is lacking.

Yusuf decried there would not be any meaningful productivity or industrialisation in the country without the right infrastructure.

On his part, Uche Uwaleke, a Professor of Capital Market at the Nasarawa State University, Keffi, said export-based diversification remains the only sustainable solution to the present foreign exchange crisis.

His words: “The current strategy of the government appears to focus on the supply side involving borrowing dollars to improve liquidity in the near term. But it may not record any significant success except the unbridled demand for foreign exchange is dealt with.

“To curb the demand pressure, I suggest the government should compel a change in consumption behaviour by enacting a ‘Buy Nigeria Law’ akin to the ‘Buy America Act’ of 1933 and recently the ‘Build America, Buy America Act’ of 2021.”

Uwaleke noted that Nigeria’s import data support revisiting and scaling up the Central Bank of Nigeria’s (CBN) currency swap deal with the Peoples Bank of China.

“Given that the bulk of Nigeria’s imports are from China, it stands to reason, therefore, to explore ways of bypassing the dollars and settling these transactions in the Yuan.
“This was the idea behind currency swap with China, which was largely inadequate in size. To increase the stock of Yuan in our external reserves, Nigeria can issue panda bonds, which are bonds denominated in the Chinese Yuan and are considered cheaper than Eurobonds,” he added.

Prof. Godwin Oyedokun of Lead City University, Ibadan, corroborated that the only way Nigeria could improve the quality of what is produced locally to attract the right patronage is to build good infrastructure, which would in turn reduce the cost of production.

“No country achieves industrialisation relying on generators; the power system must work. We also need to look at tax rebates for the manufacturing sector as well as tackle insecurity, otherwise, there cannot be any meaningful investment that will bring about more productivity for the country to earn more money,” he explained.

He added that for local industries to grow the economy, there is a need to develop a strategy on value chain addition for the nation’s products to promote massive exports and earn more foreign exchange for the country.

In his contribution, Prof. Sheeriffdeen Tela of the Onabisi Onabanjo University, Ago-Iwoye, said President Tinubu, while looking for foreign investments, should also think of encouraging local producers by giving incentives like tax relief at federal and state levels, particularly, for agriculture and agro-allied industries.

The Professor of Economics urged government to put up adverts on “Buy Nigeria” when there are products to be sold to the public.
He stressed the Nigerian National Petroleum Company Limited (NNPCL), in collaboration with the Ministry of Finance, needs to renegotiate the oil for cash loan deal to allow crude oil supply to local refineries that are complaining of no supplies.

For Prof. Pat Utomi, government needs to develop a strategy on the value chain that promotes addition. He said this will make exports earn more foreign exchange for the nation.

Utomi, who is one of the founders of the Lagos Business School, said government should take bold steps to develop a viable strategy on the value chain, stressing that this has become necessary because every part of Nigeria has comparative advantages to grow products such as sesame seed, ginger, oil palm, groundnuts, among many others.

He added: “We limit industrial policies to these products within a period and then we create a production environment for them. We should follow the processing and several people should be introduced into the chain; then you have people whose businesses are aggregation; their businesses will also begin to aggregate the production of all these small guys to have one big yield. They will be able to export that value chain to the global market where they can do better things. From there, the economy can now be set to export from five to six different commodities to 400, 500 products from Nigeria.

“When the economy grows like that, it will increase foreign exchange inflows. But today, the local people are just doing something to eat food. We must stop that and take deliberate measures to grow the economy given our factor environment, given value chains, given industrial policies that can turn around the economy.”

On President Tinubu’s trips abroad in search of foreign investors, Utomi noted: “No foreign investor will come to Nigeria until we get Nigeria right. That is my take. Yes, when you talk to them, they look at the environment, they know they cannot put their money in such an environment where you don’t have a stable political system. Nigerians are currently not investing in their own country.”

According to him, Federal Government must deliberately focus on internal capacity building for Nigerians that will empower them to become experts in production processes.

“Also, government should deliberately look into our exchange rate because challenges facing that aspect of the economy in the country have become an obvious factor. A quick solution in that regard is imminent if foreign investors must come to establish their manufacturing companies here in Nigeria instead of asking the government to give them exchange rate guarantees, not forgetting that our economy has become so unreliable. We have had some situations where investors coming into the country first ask for exchange rate guarantees that will enable them to plough back their profits from their businesses. This is no longer acceptable,” he stated.