Repositioning Nigerian economy for growth (2)

by Odilim Enwegbara

Last week, we agreed that development is never achieved by accident, or by indolent and unsure people. Rather, it’s an outcome of an immense risk, bravery, and sacrifice. We also agreed that why Nigeria is in such an endless economic somersault is because our economic development is conducted without well-thought out plan. From this, we agreed that development without a plan is development without a direction. Because planning is the secret of development, there’s the urgency to rigorously plan the country’s development. Refusal to plan is refusal to take the economy through tempestuous voyage, through unprecedented agricultural expansion, industrialization growth, urbanization modernization, and technology leapfrogging. In other words, Nigeria’s refusal to plan 2020 today is the country’s refusal to become one of the world’s 20 largest economies by 2020.

But to start development planning in Nigeria, the President should as a matter of urgency, elevate the Minister of National Planning as both Planning and Coordinating Minister of the Economy, while the Minister of Finance should focus on finance, which is already huge enough to keep the occupant very busy. This is the only way to ensure that the economy is focused on carefully mapped-out direction rather than on the current fire-brigade approach.

However, it is imperative to propose that government should reclaim its abandoned responsibilities in leading the development of the country’s vital industries, particularly critical infrastructure. That the newly emerged economic powerhouses such as China, India, and Brazil got where they are today mainly due to a highly committed government, guaranteeing sustainable growth, economic patriotism that carries the private sector along is the way for us too to achieve robust development, a job driven development — rather than the present externally-driven and externally-controlled development — is no longer in dispute.
Worsening the situation is not only that the country’s construction industry is wholly in foreign hands. That government officials and politicians are blaming lack of capacity as their reason for denying contracts to local construction companies, contracts paid with public money, makes one to wonder how did the foreign construction counterparts acquire their own capacity if not by their home governments preferentially awarding them construction contracts in an effort to help them acquire their present high capability. The hidden truth is that government officials and politicians always award contracts to foreign contractors instead of local ones for pecuniary interests. As a result, these foreign construction companies help launder the money for them.

While fooled by the West and their local accomplices into believing that government has no business being in business, companies owned by the same Western governments are busy profiting from the absence of government-owned enterprises in the country to the extent that the publicly-owned British Airways and United Kingdom-government supported Virgin Atlantic have been engaging in price-fixing on the highly lucrative Lagos-London route; the same is true with ExxonMobil, Chevron, Shell, BP, Total, and Agip controlling our oil industry because the Nigerian National Petroleum Corporation is permanently made moribund; and in the absence of national construction companies, foreign companies such as Julius Berger, RCC, Arab Contractors and Setraco have no difficulty bestriding the country’s construction industry like a colossus. And as they control these critical industries and infrastructure, so do they do everything to ensure Nigeria’s economy never gets into local hands since that would lead to a possible transition to a modern independent industrial economy.

That is why the only way to expect the economy to begin growing to the extent of becoming one of the 20 largest economies in the world by 2020 is by reviving critical state-owned enterprises such as the Nigeria Airways as a national carrier; the NNPC as a leading player in the country’s oil and gas sector; as well as government establishing some mega national, regional, and state construction companies and power companies. If the fear is that they might end the same way the earlier ones ended up, then, it means that we’re afraid of learning from their mistakes. For this reason, government should establish these enterprises purely as commercial and profitable businesses, competing with their private counterparts. That should also mean handing them to patriotic and seasoned professionals to manage.

But in order to ensure that critical industries in the economy are truly in local hands, the Federal Government should as a matter of urgency establish the Nigerian National Engineering and Construction Company, as well as the Nigerian Military Engineering and Construction Company, which should be in place to promote the country’s military-industrial complex. In addition, state governments should establish construction companies targeted at addressing their specific needs. The importance of establishing mega local construction companies should not be overemphasized considering how the presence of China Civil Engineering and Construction Company has been the main driver of China’s construction industry to the extent that the company built the world’s largest dam, the Three Gorges.

Truly, handing the industry to local players will require the enactment of the Nigerian Construction Industry Bill with the goal of mandating that all publicly-funded construction contracts be awarded only to locally-owned and locally-managed construction companies. Made effective by 2015, the law should empower the Economic and Financial Crimes Commission to shut down and arrest both the officials of government and those of the foreign companies involved in the violation of the law. With such a draconian law in place, it should be a matter of time before indigenous construction companies begin to have enough breathing space to become world-class in road, airport and seaport, power plant construction among others. If nurturing the CCECC by the Chinese government had helped to transform the company into a global construction company, what stops the Federal Government from nurturing NNECC into a global construction company too?

Nigerians would be amazed how within such a short period of time, the development of our roads, bridges, waterways, airports, railroads, dams, nuclear plants, public buildings, etc. would begin to be built and maintained by Nigerian engineers without involving either foreign engineers or foreign construction inputs since the new law would mandate that not less than 80 per cent of construction inputs be sourced locally along hiring local architects, planners, quantity surveyors, etc. Hiring of expatriates by any local construction company should be banned and monitored by ensuring that all construction companies register the business and their staff with the National Construction Contractors Database. This has become inevitable given no justifications whatsoever for construction companies operating in the country to be hiring expatriates while thousands of highly qualified engineers and construction technicians roam the streets.

That the Nigerian government has refused since the demise of Nigeria Airways to revive the airline is mind-boggling, especially considering the life-and-death importance of air transport infrastructure to any advanced (and aspiring advanced) economy. In other words, continued refusal to revive the airline is one of the costliest mistakes by the government, especially by one that wants to transform the country into a modern industrial economy and one of the world’s 20 largest economies by 2020. How do we want to achieve these big dreams for our economy if most of our cities are hardly accessible by air, locally and internationally? Also, for how long should the government look the other way while the country lose

s billions of dollars to foreign airlines annually? For how long should Nigerian flyers continue to pay unheard-of high fares, be extorted, and be molested because they are forced in the absence of a national carrier to fly foreign carriers?

Are the facts on the ground not sufficient enough to demonstrate the kind of extreme difficulty the few local players in the aviation business have to encounter? Or, do we expect these local airlines to compete favorably with publicly funded foreign airlines like BA, Lufthansa, Air France, Emirates, and Qatar Airline? Or, that these local airlines will have what it takes to meet the astronomical passenger growth in the country without government involvement in the industry? How should these local players expect to become profitable when they are constantly going cap in hand seeking investment from the same foreigners who see their presence as unwarranted challenge to their home airlines taking advantage of the absence of national carrier in Nigeria? Shouldn’t providing loans to local players mean shooting themselves in the foot, including denying their home airlines price-fixing in Nigeria?

To quickly stop these massive financial outflows and the difficulty encountered by millions of Nigerians wanting to fly locally and internationally, it is time to establish a new national carrier as the West African Airline of Nigeria. Established as a global airline, WAAN will take full advantage of the present huge demand in both local and international passenger flights. Like it is the case in most countries, government workers and politicians should be mandated to fly WAAN (unless they are paying from their pockets and unless the airline doesn’t fly the route or doesn’t connect the route).

As a global airline, its routes should include New York City, Houston, Atlanta, London, Frankfurt, Rio, Riyadh, Dubai, Toronto, and Shanghai — routes millions of Nigerians patronize yearly. The airline should be expected to transform Lagos and Abuja into leading global airports and by so doing challenge both the Ethiopia Airline and the South African Airline as the true leader African aviation business.

To successfully establish WAAN, government should constitute a team of Nigerian aviation and air business experts to come up with the blueprint on how to put in place a world-class airline that should be ahead of competition in both volume and return on investment. For this reason, the team should be mandated to come up with some novel ways to raise the enormous take-off capital which the airline would need to finance the acquisition of hundreds of new planes. But to shield the airline from the overbearing and disruptive creditors, raising such huge capital as high as $40bn, should require exerting government’s full financial weight, which should include taking WAAN to the international bond markets. To be continued next week

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