Bakare Ademola
Ever since in 1982, the former President Shehu Shagari introduced the first ever austerity measure programme to the General Ibrahim Babangida’s Structural Adjustment Programme (SAP) of 1986-1990 and other policies by succeeding administrations in Nigeria aimed at evolving a sustainable economic development strategy, Nigeria has been experiencing stalled economic progress.
The reason for the persistent failure to diversify the economic structure is easily traced to the dead-easy philosophy of the thinking that crude oil sales will continually subsist as source of foreign exchange revenue. That this wishful thinking has persisted for over four decades, even in the face of the fragile nature of the international crude oil market, underscores our collective naivety.
Thus, the recent visit of the International Monetary Fund (IMF) Managing Director, Ms. Christine Lagarde to Nigeria tells no new story, but a rehash of the aged fact that no one but Nigerians and the various levels of government can help fix its economy. Lagarde noted that Nigeria can be one of the 21st century world economies, if only the government can tackle and fix some defective structural challenges noticeable in the economy.
Often, when most Nigerians bemoan the deteriorating Naira exchange rate, but fail to understand that it is the relative strength and structure of a country’s economy in terms of how broadly diversified it is and the quantum of exports vis-à-vis imports that gives relevance to the strength of a country’s currency.
It is obvious that the reluctance shown by the CBN and the Federal government to heed the call for devaluation apparently has to do with the near absence of a viable productive base of the Nigerian economy. We have not been able to deploy the vast arable land that is lying fallow to serious agricultural production. More than fifty years ago during the decades of 1950’s and 1960’s the country was a force to reckon with in Commodity exports, which saw such development strides that made Nigeria as one of the fastest growing economy in the Sixties.
Any effort at boosting the productive based of the economy in this 21st century must transcend mere commodity export of primary produce to upscale processing of these primary produce into semi-manufactures and manufactured goods for both domestic consumption and exports. In addition, we should not limit ourselves to import substitution, but like the South East Asian ‘Tigers’ adopt a more aggressive export-led industrialization strategy at least with a view to penetrating the West African coast and the east and Central African regional economies.
The economies of this approach is that it offers the country the opportunity to overcome the negative terms of trade (low export prices) associated with commodity exports relative to higher prices of imported manufactures from advanced economies. The export-led processing of manufactured goods would not only enhance the labour-absorptive capacity of the economy, but will provide a veritable platform for learning-by-doing-it process, which goes to fast track technology acquisition and improvement of skills of the local labour force.
This brings into focus a recent Emefiele-led Central Bank of Nigeria (CBN) initiative known as Produce, Add-Value and Export (PAVE), which seeks to reduce the country’s huge import bill in order to conserve foreign reserves and generate employment. To this end, the Bank has undertaken to provide funding to value chain operators in some selected commodities such as Rice, Wheat, Oil Palm, Cotton and Textile, Sugar and Fish with the aim of boosting exports.
It is equally important to note that the unorganized private entrepreneurs in Aba have demonstrated capacity in the manufacturing of shoes, bags and other leather works and Nnewi in terms of auto-spares and allied accessories. Perhaps, what is required is the need to identify similar industrial clusters and take steps to enhance their operations.
The government, especially at the sub-national government level should get into the fray.
Driving through South East and South West zones shows that most of palm trees have become wild and not as productive anymore. It presupposes that these wild palm trees are begging to be replaced with younger, but productive trees. It is in this regard that the CBN Anchor Borrowers’ Programme should be appreciated. The programme seeks to collaborate with anchor companies involved in the production and processing of key agricultural commodities. The pilot programme in rice production was officially flagged off by President Muhammad Buhari in Kebbi State in November, 2015. Similar programme should be extended to oil palm, cocoa and cotton production.
The same level of attention is also required to address the rot in the social services especially education and health care services. The effectiveness of these two sectors has remarkable impact on the quality and capacity of the country’s labour force and by extension its productivity. The increasing army of Nigerian students seeking for university admissions abroad and people trouping to India and Dubai for healthcare services, when measured in monetary values paints a frightening picture of the level of dependence on foreign social services.
Given the dire economic strait being experienced, it has become compelling that a strategy of domesticating viable research and development activities be put in place, which addresses research in critical areas such as industrial raw materials, engineering and technological innovation.
Would it be out of place for Nigeria to adopt a common official dress made locally for work other than English suit? What stops the various levels of government from adopting the locally made Ankara fabric as school uniform in both the primary and secondary schools? This will instantly provide instant demand for the products of the local textile industries as well as create employment.
The unintended lesson of the present economic crisis is the realization that the current level of economic resources can hardly sustain the present unwieldy political structure of 774 local government area councils, 36 state governments with a unicameral state assembly and the Federal Government with a bicameral legislature.
The political class should bite the bullet and admit this reality in order to come together for the purpose of reducing the size of the political structure to six-geopolitical zones with a unicameral legislature. This view will readily attract comments that suggest how impracticable for this to be, owing to the rigor involved in constitutional amendment. There is nothing sacrosanct about provisions of the constitution that cannot be amended. It therefore becomes clear that our problem is simply the economy, not the Naira.
Bakare Ademola contributed this piece from Abuja
