Wednesday, 14 September 2016

Nigeria bad economy is it good up or down

That we are losing export proceeds of
about 800,000 barrels of crude oil a
day due to the militancy in the Nigeria
Delta could have been predicted by a
layman who followed closely the hard
rhetoric and the ethnic, religious,
among others, cracks in our journey to
nationhood that were exposed by the
2015 presidential election.
Thus, the renewed agitation should
have been foreseen by the President
and his intelligence team and
adequate preparations made to
mitigate and nip it in the bud. There is
still a window of opportunity to ensure
that we produce and sell the 2.2mbpd,
which was projected in the 2016
budget.
This can be achieved through
negotiation with the people of the
Delta especially now that the militants
have agreed to come to the negotiation
table. But media reports still indicate
that the federal government is being
begged to constitute its negotiation
team and proceed to the dialogue
table.
The fiscal crisis could have been
mitigated when the price of crude oil
rose above the $38 benchmark if we
were meeting our 2.2mbpd
quota.Nigeria needs a detailed
economic diversification plan; one that
links education to agriculture, health,
industries, among others. The idea of
having sectoral policies with no links
in between cannot propel Nigeria out
of recession.
The coherence of the plan will for
instance ensure that our corn and
tubers will provide the pharmaceutical
and textile grade starch to propel local
drug manufacturing and value
addition in the textile industry. Our
tubers cannot continue to be wasted
when they can be used as chips to feed
animals for meat production. The
fruits that are wasted across the land
should be channeled to fruit juice
production and this is not rocket
science grade technology.
It is just the simple process of
pasteurisation which everyone who
passed through secondary school read
the theory. We need to get to a point
where hides and skin produced in
large quantities in the north of Nigeria
can be converted into shoes, belts, and
bags locally.
There are several low hanging fruits
on which we can begin our economic
revival. The country has established
various research institutions whose
results we have also left to waste. Even
though they are poorly funded, we
have not been able to link their work
to economic reforms.
These institutions should be funded to
solve specific challenges in important
sectors of the economy within targeted
time frames. For instance, the research
institutes under the Ministry of
Agriculture have their work cut out for
them in these times of hunger.
In terms of resources, there are lots of
Nigerians that have rich reservoirs of
financial and other resources. These
hard times call for leadership
ingenuity. Instead of chasing
proverbial foreign investors, the
leadership must give them comfort
and confidence to invest their monies
in their country.
Media reports had indicated that
Nigerians had over $20 billion in
domiciliary accounts within Nigeria.
What policies and strategies should we
use to have these resources channeled
into areas of great national need
instead of scaring away these
Nigerians who may have been
compelled to move their monies
elsewhere? What about the billions of
dollars in terms of Diaspora funds that
come back every year? Bankable
projects ought to be developed to tap
into this window of opportunity.
There are many hard working
Nigerians living outside our shores
who can invest in the country through
special purpose vehicles or who can
buy into Diaspora bonds. The
administration, through its policies,
must give them a sense of comfort that
their investment in the country is
worthwhile.
As we reform, we must take
cognisance of the fact that the cost of
projects from airports, seaports to road
construction in Nigeria is one the
highest in the world and especially
higher than the costs in other African
countries. In times of lean resources,
frittering away money at not less than
$3million – $4milliion per kilometer
of road constructed is not the way to
go.
Other countries with our type of
terrain are constructing the same
roads at not more than $1.5million
per kilometer. Public procurement
must therefore be remodeled to
mainstream value for money. It should
also be used to mainstream the buy
made in Nigeria campaign through
domestic preferences.
The fact that the quality of made in
Nigeria goods and services may not be
up to the standard you find in more
advanced countries should not stop
our patronage. But the producers
should be encouraged and given
opportunity to improve over a time
frame.
It is simply an idea that a huge cake
has been baked and everyone should
come out with a knife to take a cut. It
stultifies the ability of states to
develop their resources, competencies
and capacities. In the quest to share
oil money, we abandoned agriculture,
manufacturing and value added to the
extent that the huge food import bill
weighs down our trade balance.
It is therefore time for the President to
come down from his high horse and
consider the implementation of the
agreements of the last National
Conference.We need a federation that
decentralises most of the functions
that touches the lives of the people to
the states. It should be a federation
where sharing from the revenues of
the federation is directly and
proportionally linked to contributions.
This should be an incentive for states
and or regions to work hard and
compete to generate resources instead
of the extant perverse incentive to
share oil resources. The abrogation of
the First Republic’s fifty percent
derivation by military fiat is partly
responsible for our financial crisis.
That sharing formula was the product
of the agreement of the founding
fathers.
Since the military intervention,
physical and intellectual laziness has
taken over the land and might has
become the basis of governance
instead of rigorous debate and
dialogue leading to the agreement of
people who make up the territory of
Nigeria. The country cannot continue
on this dysfunctional path and expect
to be on the path of progress and
economic growth.
Finally, the President and his team
need to communicate their plans and
programmes clearly to the people to
guarantee a buy-in where both the
leadership and the led move in the
same direction.
• Onyekpere is a fiscal governance
expert and Lead Director of Abuja-
based Centre for Social Justice