Thursday, 24 November 2011

BEYOND THE SUMMITT FOR NIGERIAN RENEWAL

By Bayo Ogunmupe
ECONOMIC summits are a yearly jamboree bringing together chief executives, topnotchers of the private sector and senior government officials to discuss how best to develop and monitor the Nigerian economy.
The main focus of the summits is to develop policy directions in the short and medium term, of the priorities of Nigeria’s national economy in the context of the evolving world economy.
The worst recession in a generation is how the Encyclopaedia Britannica online described the recession that hit the world recently. The economic downturn that started in the United States in 2007, so severely affected many countries including Nigeria. It has been given the unique name, the Great Recession.
That was why the 17th Economic Summit was organised. The summit started at Transcorp Hilton Hotel, Abuja on November 10, it ended on November 12, 2011, its theme was: Attracting foreign direct investment through global partnerships. At the confab, delegates were treated to a dialogue with President Goodluck Jonathan, sectoral policy dialogues and a forum for emerging leaders was forged.
Yes, Nigeria should attract more and greater investment. But the incentives are not there. The Boko Haram unrest cannot invite investors, for they are attracted by economic stability, a stable currency and the purchasing power of the people.
The best way out of our impasse is to imitate another emerging economy. For me, I would want Nigeria to ape India. Just as Nigeria is the largest country in Africa, India is the largest economy in the Commonwealth. But in spite of these similarities, both countries have differing development patterns. In the latest global competitiveness report, the World Economic Forum (WEF), placed Nigeria at 127th position in the world. Others are the indices rating by the World Bank, the International Monetary Fund (IMF), which do not present cheering news. Insecurity, dilapidated infrastructure and socio-economic paralysis have coalesced to stymie Nigeria’s democracy.
For India, the statistics are bright. Even with a huge population of 1.2 billion, as against Nigeria’s 167 million, India’s per capita income and gross domestic product (GDP) still towers above that of Nigeria. The World Bank ranks India as the 10th largest economy in the world by GDP and the fourth by purchasing power parity. In the midst of such impressive indicators of development, India still has its fair share of poverty like Nigeria.
However, unemployment and public sector corruption define the Nigerian reality. And unlike Nigeria, the Indian government and people, having identified their challenges, are tackling them headlong. How India was conquering their problems was the thrust of a recent confab held at the Lagos Business School.
Though the forum was to seek ways of fostering Indo-African relations, it became a roundtable to share experiences and create a future through competition. As it is, the Nigerian authorities should not sweep aside the lessons the Indian community in Nigeria is teaching us. One remarkable lesson from India is the role of diplomacy in entrepreneurship building. India’s High Commissioner in Nigeria, Mahesh Sacdev, is passionately growing Indian businesses in Nigeria.
Nigerian envoys abroad should borrow a leaf from India and grow brand Nigeria wherever they find themselves. It is obvious from the foregoing that India walked the same path as Nigeria. But unlike Nigeria, this South East Asian giant broke free from the manacles of underdevelopment. The Indian government showed the way by evolving policies, which birthed a regime of free enterprise. Working closely with the private sector, the Indian government promoted investments in technology and education. The result is that New Delhi became the outsourcing capital of the world. Indian graduates in areas of medicine and communication technology compared favourably with global brands like Harvard University, the London School of Economics and the University of Geneva. Complex medical cases are being referred from the United States hospitals to India with amazing results.
Yet another lesson is the fiscal frugality and patriotism, which underline the Indian socio-economic work ethic and value system. Indians buy India. Indian government officials use vehicles made in India. Even with a population of eight times that of Nigeria, you will not find the type and number of expensive and exotic cars on Indian roads as you will find in Nigeria.
Nigeria can imitate India in education, ICT, infrastructure, steel, power and healthcare. But first we must mould our warped value system that promotes ostentation. We must learn to invest in our tomorrow. Government insincerity must stop. Let us sell all the refineries with government retaining 30 per cent of the equities in them. They will certainly perform effectively thereafter. Let us promote import substitution industries by requiring all foreign companies in Nigeria to manufacture their goods locally - within five years or be blacklisted. More than 75 million Nigerians are below the age of 18, we must evolve a means of guaranteeing them a better tomorrow. President Goodluck Jonathan must introduce social security for the aged, the unemployed and all tax payers, our economy can withstand it. We do not need the culture of private jets for bank executives or the exotic jeeps of public office holders. Nigerians must imitate India by buying and using Nigerian products, locally sewn clothes and attires. Electricity is the harbinger of economic and industrial prosperity. For lasting economic renewal in Nigeria, we must fix our power sector. Privatisation is the high road to prosperity. The main focus of the government should be the stabilisation of the power sector. To wit, we should adopt one of several models extant in the world today.
As a member of BRICS: Brazil, Russia, India, China and South Africa, countries similar to Nigeria were in dire need of power in the 1990s. But by 2010, these countries now generate electricity far more than their needs. That was not by magic but by realistic planning that involved every segment of their societies.
However, each of these countries has her own methods of ownership of electric companies. In Brazil, electrical companies are listed at the Stock Exchange. The state owned 52 per cent, residents owned 22 per cent while the remainder is owned by the Brazilian public funds. For Chile, CORFO, the Chilean National Development Corporation is the prototype of our PHCN. Here, electricity is totally privatised. CORFO was initially financed by pension funds but it is now owned by investors. Thus, we should adopt varying strategies to organise our own electricity generation and supply.

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