Revitalizing the Nigerian economy: Beyond western dependence (vi)

Kola Olaniyi

Olaniyi is a graduate of Electronic and Electrical Engineering, Obafemi Awolowo University, Ile Ife,  kellokelington@yahoo.com, 08068495313

INDUSTRIAL POLICY

Fiscal policy begat industrial policy. Industrial policy begat industrialization which dovetails actualization of government budget (either through deficit funding) with realization. Industrial policy, if painstakingly implemented and applied effectively would bridge the much needed gap of the underemployed, unemployed into active employers and employees. Hence the mystique concerning industrial policy is to be understood and properly articulated.

This term is a conceptualized developmental phenomenon. This is a policy that marshals all governmental fait and largesse for the aim of productivity, competitiveness and full employability. Without prejudice to Nigerian, it is obvious for all that her economy is fully underutilized,the oil sector contribution to GDP notwithstanding. The industrialized nations of the world despite the their quantum leap in the area of massive Industrialization-being the progeny of industrial policy- continually make this their hard target in governance. I guess it is time Nigeria tapped from this policy of economic transformation in bettering the lot of her populace. Against the perception of the free market economy of demand and supply being the market determinant, it has been found that industrial policies of government has rather promoted private businesses.

Stimulus packages of the government in 2008 and 2009 to General Motors and Chrysler forestalled the inimical consequences of lay-out and unemployment by preventing bankruptcy of such company.In this subsection of industrial policy,i consider three sectors of the Nigerian economy the most consequential namely the transportation, energy sector and manufacturing sector.

Much needs to be done in the transportation sector, the roads and the air means of transportation are the only explored ones. The rail means is comatose, that has led to the congestions and gridlock encountered in the country. Even the roads are ramshackle.Account has it that Nigerian roads are worse off than the roads in war torn countries. That explains the extent of decay and degradation. If the railway could be brought back on track, modernized and expanded, the transportation sector will witness a great deal of improvement. This would ease traffic congestion and make production pay-out accessible and reachable. The multipliers effect of this would be to cushion the skyrocketed rent experienced in the densely populated areas of the metropolitan cities. By simple logic if I can get to my place of work within 30 minutes devoid of obstruction or transportation hitches irrespective of wherever I am in the country, settling down in a rural area would be the most preferred for the retrenchment of cost and saving for other pressing expenditures. Skyrocketed rents would plummet which on the long run will redistribute population from densely populated areas to less dense areas.

Another catalyst of the industrial policy of government should be the massive investment in the energy sector. This is the precursor for a viable and formidable manufacturing sector notwithstanding other ancillaries incentive like tax rebates, stimulus packages et al being discussed in that next sub sector. The energy sector is the prime mover of a nation’s economy. We all are aware of many industries that have folded up and left the shores of Nigeria due to epileptic supply of energy (by this principally, I mean electricity). There was a time the Northern part of Nigeria used to boast of strong textile industries absorbing a good number of the labour. Suddenly apart from other problems encountered, electricity supply was the main reason for their moribund states. This created high rate of unemployment.I was told a particular textile industry could boast of 60,000 workers. Consider that kind of industry and its likes folding up and then postulate the doom of unemployment spelt on the country.

Here, the policy has to be rigorous, comprehensive and reboust. Be it the generating, transmitting or the distributing part, the investment must be massive to awaken moribund industries and entice new ones in springing. The statistic within reach recommends 40,000MW of electricity as the benchmark for power stability for both industrial and commercial activities and here we are struggling to attain a 5,000 MW which periodically fluctuates. Many writers and analysts have written extensively on looking beyond hydro and thermal (although the sickly problem with Nigeria at times is one of a quintessential paradox, which loses 40% of the gas explored through gas flaring and yet complains about the inadequate gas supply to thermal stations) to other form of energy be it biofuel, solar and nuclear.

Worthy to mention is the fact that although the two already explained (transportation regeneration and massive energy investment) in the industrial policy would definitely jump start the much needed transformation. There is still need to extend acts of bail-out to the manufacturing sector to act as complement for economic renaissance. The issuance of tax rebates to nascent industries goes long way in creating the much needed incentives for proper start-up. I was astonished when I was told by a friend a few years ago that the then minister of trade and commerce in Ghana wooed investors to his countryside on announcing the resolution of the federal government in doling out a 10 year VAT-free policy for new industries. This sign posted an enabling environment for investors cum industrialist.

(6) OTHER ANCILARY SOLUTIONS

Nigerian government needs to attend to complaints by potential investors that cost of transacting business is high. This would be the apt stimulus needed in consonance with the already discussed i.e. bail-out for ailing/insolvent ones or favourable loans to encourage production. If the stock of Nigeria economy is taken, the active players are the expatriate who are even crying for more. Indigenous participation is low in the area of the oil sector which happens to be the mainstay of the economy or in the telecommunication industry which has only Globacom as the active participant though Globacom still continues to depend on the service of expatriate. Even there must be a call for FDI; it must be skilfully bargained to involve active participation of the citizen. It must move from the win-all policy of west to win some-lose some.This should be the quid pro quo for FDI.Latest trend of happenings show that cities and towns are insisting companies into infrastructural development must build some of the equipment in their homelands. An example to buttress this fact is a Canadian company Bombardier contracted to supply train cars in Toronto, manufactured the train and cars right in the city of Toronto.

I shake in utter dismay to the massive importation of nokia phones and electronics gadgets to Nigeria yet most of the companies aren’t compelled to site their industries in Nigeria.

The reduction in the degree of outsourcing must reduce drastically to enable indigenous participation in the economy which would be made manifest in the production of gainful employment. In fact the theory should be ‘never import what can be locally produced’. Any time you ponder on the clement climate and rich human resources Nigeria is endowed with, you can’t help feeling sorry for her pitiable food importation. That is bunkum. It smacks of outright foolishness by underutilising your resources and fully harnessing and keeping flow the economy of other.

Diplomacy between countries has been elaborated to encompass economic diplomacy. Gone are the days when foreign diplomacy was restricted to travel, language and military. It has gone to mean opening new doors for export and bilateral relations. Other countries like China and USA have compelled their foreign diplomats to forage avenues open for exports. Nigeria must follow suit on this if she wants to be economically transformed. Otherwise the scores of diplomatic houses cum ambassadors she has belie the economic benefits. She spends more on foreign missions but gains little from it.This concept of integrating economic diplomacy into foreign policy would open new doors for export, rapid indigenes empowerment and increased G.D.P.

Diversification from oil as the foreign exchange of the country to other sources is of utmost importance. Oil is no longer a comparative advantage for Nigeria. With on-going search for other form of energy and increased discovery of oil in other African countries, it thereby means its dependence is overdue. Diversification is needed for continual relevance. Exploitation of underutilized/unutilized human resources should begin forthwith. Nigeria has a lot of natural resources she jettisonedin pursuit of oil which is eventually becoming a glut with dwindling price at the international market.Continual budgetary preparation premised on its price at the international market is quite suicidal. Our comparative advantage is buoyant labour size, good weather and natural resources.These should be harnessed to the fullest. Germany deflated her wage to make her a safe haven as the investors’ choice. Nigerians could do the same to reflect cheap labour and production in centuries after all she is not obliged to any pact or treaty in terms of monetary policies.

(7) CONCLUSION

If everybody plays by the same fair rules, mind one another business and mechanisms are in place for checks and balances, then Nigerian economy would experience quantum leap and would emerge as the first on the African continent. Continual dependence on the west and her policies will become a thing of the past. Then would the reward for hard work, competence and industry be realisable. Lending based on speculation would decrease while that to the real sector of the economy will increase for good.

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