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An economic agenda: Our expectations (1)

By Ololade Adesola
11 May 2015   |   3:47 am
AS we join millions of Nigerians to congratulate the President-elect and wish him success in resolving Nigeria’s myriad of problems, we realize that no doubt every sector has the agenda that they would like him to tackle immediately.
CBN Headquarters, Abuja

CBN Headquarters, Abuja

AS we join millions of Nigerians to congratulate the President-elect and wish him success in resolving Nigeria’s myriad of problems, we realize that no doubt every sector has the agenda that they would like him to tackle immediately.

Scores of issues deserve immediate attention – infrastructure, power, security, transparency and disclosure, education, health, economy, solid mineral exploitation, manufacturing, MDGs, housing, urban poverty, sports administration, youth employment, women empowerment – these and others are in a state of semi-comatose and require urgent reviving.

We trust that before now, the All Progressives Congress (APC), with its band of experts, has already studied the situations (including the resources available) and identified the areas that should receive priority attention.

In this article, we would be concentrating on the economic agenda, which areas require attention and which solutions should be proffered – short, medium and long term.

This of course, is without prejudice to the promises that may or may not be in the APC’s manifesto. Managing the economy for the good of all Nigeria is Africa’s biggest economy, but our Per Capita Income is not ranked in the Top 10.

The rich-poor gap is too wide. Drive along the Lekki – Epe Expressway in Lagos State and you would be disturbed by the wide discrepancies that you would see – offensive displays of wealth sitting right next door to abject wretchedness.

There must be a more equitable distribution of income through empowering anyone who is courageous enough to want to improve his financial situation.

Everyone who is willing must have access to the tools required to move up the social ladder. The Central Bank of Nigeria (CBN) has disbursed money for many programmes, the youths have been given many grants, yet there is little enduring effect from these disbursements.

Many reasons have been adduced for this, chief of which is that the beneficiaries of these programmes, though having sufficient technical skills to run their businesses, usually have no financial management skills and therefore, end up taking wrong financial decisions that run the businesses aground within three to five years.

Whatever may be the reasons, the new government must ensure that the “Trickle-Down Effect” of all economic policies is carefully managed to deliver the required lasting benefits on every stratum of the economy.

Economic diversification Too much lip service has been paid to economic diversification by past administrations. Thankfully, circumstances have put it on Buhari’s priority list due to the current price of crude oil; he has no choice but to tackle it head-on and come up with tangible results in the short to medium term.

Granted, government is no longer expected to be involved in enterprise, they are still required to put in the legal, infrastructural and macroeconomic framework that would engender private initiatives.

What are the viable alternatives to the foreign exchange (FX) income generated from crude oil, with which Nigeria has competitive advantage? They are obvious to all, and in fact the outgoing administration has made some efforts to attend to them.

They include Nollywood, tourism, IT software, telephone applications etc. Countries with no crude oil have grown their economies on services and intangibles.

Switzerland, the small, icy, mountainous country in Western Europe, is one of the world’s richest due to services – it is the world’s conference centre; big or small, the world holds conferences in Switzerland. Nigeria cannot boast of even one world-class conference centre complete with the latest IT gadgets, accommodation and in-house catering as well as leisure facilities.

Recently, Switzerland sold its government bonds at a Negative Coupon Rate! Investors are paying Switzerland interest to lend to it! It is very strange and inconceivable to modern economic reasoning that Nigeria has over 800 kilometres of Atlantic coastline, yet we do not have a single world-class beach resort! No surfing.

No sailing. No cruise ships. The Bahamas has a higher Per Capita Income than Nigeria – their main FX earner is tourism. Other areas where Nigeria has immense competitive advantage, which has remained largely unexploited, are in the production and exportation of refined petroleum products, semi-processed solid minerals, cassava products (e.g. starch, glucose), cocoa products (e.g. cocoa powder, cocoa butter), tanned leather and many other value-added products.

A favourable atmosphere for businesses to flourish must be created and managed actively so that it is sustained. There should be no more harassment of businesses by various government agencies such as Customs, NAFDAC, local councils, tax agencies etc.

Local manufacturing needs a reengineering; the era where 70% – 95% of manufacturing input is imported must end. Enough of lip service to backward integration by the organized private sector; genuine measurable efforts that produce visible results must be made in this regard.

Our FX reserves must be conserved while manufacturing inputs take a major chunk of it. • To be continued. •Adesola is Managing Consultant, LA Consult Limited, Lagos.