Repositioning Nigerian economy for growth (3)

by Odilim Enwegbara

Last week, we agreed that there’s the need for government to reclaim its abandoned economic responsibilities, particularly reviving some critical public enterprises which are the drivers of economic growth. Also agreed was the need to make the planning minister also the coordinating minister of the economy since that’s the only way to bring sanity and sense of direction to the President’s transformation agenda. Agreeing with John Kenneth Galbraith and Ha-Joon Chang that western neoliberal economics (americanomics) is an imperial ‘double-standard, ladder shifting economics,’ I’m also in agreement with thousands of Nigerians calling for the replacement of the current economic team led by Mrs. Okonjo-Iweala, since we shouldn’t pretend that our economy is not run by the IMF and the World Bank as they did during the 1980s and 1990s.

This week, besides focusing on the urgency to fix the power sector, the need for a law mandating state governments to build light industrial parks to arouse the latent entrepreneurial endowments of the people is a reminder to government that it’s impossible to outsource its responsibilities and expect the economy to grow, let alone to mobilize millions of entrepreneurs as both self employed and as employers of labor as well as generators of tax revenues for government. The need to adopt model factory infant industry-led industrialization cannot be overemphasized, recognizing how this German invented model factory in 19841 turned it into a serious competitor with Britain, and which copied in 1886 by Japan’s Emperor Meiji of Japan, also quickly turned Japan into a modern industrial economy. But to successfully fast-track our economic development following Deng Xiaoping’s footsteps, the President should seek some novel ways of mobilizing Corporate Nigeria as the country’s economic foot soldiers government can never do without. In other words, the urgency to create what I call the ‘Nigeria’s Next 200 Billionaires,’ made up of shrewd business men and women, in whose hands lies the future of Nigeria’s multinational economy is now inevitable.

Because power sector is so critical and so strategic to any modern economy, Nigeria’s industrialization and economic diversification can never happen without fixing the power problem. That is why growing our current 4,300MW to 100,000MW by 2020 is the only way to grow our current $275b GDP to about $2tn by 2020. But there’s no way this can happen with power privatization, which unlike privatization of the telecommunications sector, the power sector’s strategic capital concentration, makes it every modern economy’s game-changer that can never be left in some private hands, let alone in foreign hands. As sweet as this neo-liberal privatization could sound, it’s a plot to undermine Nigeria’s ultimate economic rise. If no developed country, including the US, Japan, the UK, France, and Germany has ever left its power sector solely in private, and the recent rise of China, India, and Brazil couldn’t have been successful without massive investment in power, how do we intend to develop by leaving this game-changer in some private hands?

That is why Nigeria should seek some unconventional solutions to tackling its power problem. The most plausible way to putting the present power problem behind us is to seek sovereign loans from countries like China, using the country’s oil reserves as strategic collateral. Three billion barrels of our 42 billion barrels of oil, used as strategic collateral to borrow about $300bn to be repaid after 25 years, should be recognized as the best decision ever to be made by any Nigerian president in an effort to fix our power problem. The reasons for insisting on China are obvious. Not only because China remains today the world’s most solvent economy with about $3.7 trillion in foreign reserves, but also because as the world’s number one power producer, generating 1,140,000MW (against America’s 1,041,000MW), China has the engineering clout to help us quickly move from 4,300MW into 100,00MW within five years.

The benefits to both countries are enormous. China’s benefits should include jobs for thousands of Chinese engineers, right to purchase 25 per cent of all Nigeria’s daily oil export (which could be part of the agreement), Undeniably, stable and cheap power supply as an economic game-changer, should lead to Nigeria’s unprecedented GDP growth with equally unprecedented multiplier and trickle-down effects, unexpectedly with millions of jobs and mass prosperity lifting millions out of poverty. What fixing this game-changer will turn into is only way sending our millions of our small businesses and entrepreneurs get to work. Since they shouldn’t preoccupy themselves with generate their own power, they shouldn’t have difficulty competing with their peers anywhere in the world

In other words, if by fixing its critical infrastructure and building high tariff walls, China could witness such unprecedented growth, including jobs for over 300 million between 1978 and 2008, Nigeria’s aggressive investment in infrastructure, coupled with high tariffs on foreign manufactured goods, will lead to decades-long unstoppable growth with millions of jobs created. But making this happen should require a new leadership mindset, a patriotic government that thinks only about protecting and promoting Nigeria’s economic sovereignty, including revoking Nigeria’s WTO membership.

Recognizing the immense role small businesses could play in lifting this African giant to where it should be, besides mandating governors to build industrial parks and set up state Small Business Administration, federal lawmakers should also make it compulsory for the states to create venture capital funds as well as to establish Governor’s Entrepreneurship Competitions and participate in annul President’s Entrepreneurship Competition where three best states winners are handsomely rewarded. In addition, states should be mandated to build each month not less than one model factory in strategic industries such as materials manufacturing, shoes and garments, furniture, cosmetics, leather and food processing, solid mineral process, automotive industry, etc. Like German model factories in the 1841 and those of Japan in 1868, the state built model factories should either be leased or sold to experienced industrialists who own them upon paying mortgage.

An ambitious and patriotic government should be courting the country’s corporate leaders as well as assembling what I call Nigeria’s Next 200 Billionaires, who as the true leaders of Corporate Nigeria, should be in close relationship with the government in developing the country’s multinational economy. As President’s babies, these exceptionally talented nationalist business men and women should, besides enjoy the freest access to the government, as business ambassadors whose rise should be uninterrupted they should also have some privileged access to both financial and non-financial resources, including tax breaks and government contracts. So, besides diplomatic privileges such as traveling with the President overseas to negotiate businesses with their foreign counterparts and foreign governments, exceptional performers among them should be honored with the highest national awards, such as the President’s Corporate Nigerian Awards.

While membership selection process should be rigorous and exhaustive so as to ensure that only the most exceptionally talented business men and women are members, for purposes of geographic spread, each state should be entitled to at least two members.

Yes, achieving all these can never be easy tasks. But who says latecomer industrialization can’t be daunting? But as daunting as turning the economy into a diversified industrial and service economy can be, we have no option but to take all the inevitable risks and pains required especially because the doors are fast shutting against us. Or, can we expect our tomorrow be prosperous without going through the rigor today to make it happen? Any leader, be it President or Governor,

who wants his name written in gold in Nigeria’s history books, should do what Lagos Governor is successfully doing; not paying media to bloat their achievement, since it’s tomorrow’s historians who are going to do that.

There is no way I can end this piece without reminding the reader why I’ve been against the leadership of our economic team. Or, should I’ve looked the other way while our economy is being mismanaged by a team of incompetent ”technocrats,” especially when we all know that we do not have the luxury to allow another gross mismanagement? I’ve made it my patriotic duty to ensure that as long as this team is directionless in their management of the economy, I can’t stop criticizing its leadership. And no amount of harm to my reputation will stop me from reminding Nigerians this economic team’s inability to seriously turnaround the economy.

I can’t stop criticizing this economic team for pretending that all is well with the economy, when in reality millions of employable young men and women are more hopeless today than ever before. I can’t stop criticizing them because rather than the economy creating new jobs it is fast adding more millions of Nigerians to the already bulging house of unemployed. I can’t as long as this government is not sincere with its wealth creation responsibility. I will continue writing because I know that this economy could have done better, including creating millions of jobs for our university graduates who still live with their after years of graduation. I am writing to oppose members of the economic team who seem to believe that it fair for their children to be fulfilling their big dreams in America, while the children of other Nigerian parents are caught up in crushed dreams.

Next week we will be discussing: Why macroeconomic prudence is not prudent: Does Finance Minister know this?

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