I T is no longer news that Nigeria’s economy is in a precarious situation, and is growing worse by the day. Granted, the economy was not in the best of shape when this government took over power 15 months ago, but revitalising it was a major campaign strategy of the All Progressives Congress (APC). Unfortunately, it appears the only strategy for getting the economy back on track now is to hope and pray that oil prices rebound from months of decline so that the country will once again be awash with the green back.
Lee Kuan Yew, Singapore’s first prime minister and by all accounts, one of the greatest visionaries who ever walked on this earth, supervised the transformation of his once poor and backward third-world country to a first-world country. Singapore is today clearly one of the most developed countries on the planet. The once very poor colony has become one of the wealthiest in the Commonwealth. A commentator once said: “Singapore has achieved an astonishing degree of prosperity, social cohesion, and comity. It is almost certainly the most successful welfare state on the planet, able to protect the poor and the middle class, while keeping taxes low, all run by one of the world’s most famously efficient technocracies.
While Singapore’s strategic location in the midst of the world’s most important shipping lane clearly aided its success, there is also no one who doubts that most of its prosperity is due to the amazing, difference-making work of Lee and his governing agenda. Now, many forget how poor and backward this country once was.”
Sheikh Mohammed bin Rashid Al Maktoum became the prime minister and the vice-president of the United Arab Emirates in 2006, and is responsible for Dubai’s meteoric rise and transformation into a lavish business destination with infrastructure many Western countries are struggling to match. That is what visionary leaders do. Malaysia is another perfect example where leaders with vision have made the difference and lifted their people out of poverty into prosperity.
Firmly and proudly, they repositioned their countries in the global arena for good. Rather than lament and whine endlessly, they rolled up their sleeves and went to work.
Our dear country has not been nearly fortunate to have men of timber and calibre at the helm of affairs; men with a pan-Nigerian vision who, when faced with challenges, stared them down with grit, guts and gumption to steer new pathways to lift it from adversity to prosperity.
Only recently, the Manufacturers Association of Nigeria (MAN) decried the continued decline in capacity utilisation, warning that the situation posed a major threat to the already ailing real sector of the economy, which has resulted in massive job losses.
The association explained that the manufacturing sector recorded a 20 per-cent drop in capacity utilisation at the end of the second quarter of 2016, stressing that the sector currently operates below 20 per cent of its capacity. It blamed the decline primarily on the scarcity of foreign exchange for raw materials’ replenishment and the declining purchasing power of consumers in the country. According to a recent report quoting MAN, 272 companies have shut down in the last one year and 180,000 jobs have been lost to the closures.
In the last 16 years, the country’s economy grew exponentially to become Africa’s biggest economy with a GDP of $574 billion, contrary to the narrative in the public space that has been disingenuously christened “The 16 years of waste.”
The truth is that government needs to partner the private sector, which is the engine room of economic growth, if the country is to get out of the recession.
Beginning from the Olusegun Obasanjo administration, the Federal Government got serious and began to take steps towards import substitution. The managers of the nation’s economy at the time started taking one commodity after the other, with a view to implementing policies that would encourage dealers in such commodities to transform from simply importing and trading in them, into fully integrated local manufacturers.
Obasanjo’s effort resulted in a lot of investments in soft drink manufacturing. It also resulted in the development of the packaged-water manufacturing industry. But it was when the Goodluck Jonathan administration took office that this policy became the underpinning principle for the transformation of the economy.
What was different in the Jonathan government’s approach to import substitution was that it was developed into two broad economic programmes, with various components called the Nigerian Industrial Revolution Plan (NIRP) and the Agricultural Transformation Agenda (ATA)/Growth Enhancement Scheme (GES). While the NIRP was being implemented by the Federal Ministry of Industry, Trade and Investment, under the leadership of Olusegun Aganga, an expert poached from Goldman Sachs, the ATA/GES was anchored by a first-class agricultural economist and now the President of the African Development Bank (AfDB), Dr. Akinwumi Adesina, who were then ministers of Industry and Agriculture respectively.
These two policy frameworks, which were inextricably linked at many points, were being implemented in an orderly manner with backward integration strategies, leading to massive investments in cement production, which invariably transformed Nigeria from a net importer of cement with less than five million tonnes per annum capacity, to a substantial net exporter with over 50 million tonnes per annum production capacity, after nearly $20 billion had been injected into the sector by private individuals with strong government support through waivers and tax exemptions.
The same programme was implemented for the fertiliser industry, automobile industry, downstream petroleum industry, petrochemical industry, sugar industry, rice production, cassava flour in place of wheat and aquaculture industry, among others. This plan, although not entirely perfect, provided a clear vision and direction that seemed to lead the nation away from its dangerous dependence on other nations for its essential commodities.
- Momodu is a public affairs analyst.