Experts have said the sure path out of Nigeria’s economic woes remains with the policy of the government, to allow market forces to decide the prices of items while the government enforces regulations to boost the economy.
These experts maintained that only a guided regulation and support to specific sectors, to work for a time, was imperative for the government to engender public opportunities in the private sector which would be shed upon by players with competencies and grow the economy.
Professor, Patrick Utomi and the Managing Partner, UHY Maaji, Gabriel Idahosa, said this, on Thursday morning in Channels Tv monitored by our correspondent.
They said that the national experience and economic boom experienced in the telecoms sector was a good example to be drawn from and can be replicated in the energy sector and other sectors of the economy if the federal government muster the courage for temporal pain for lasting country-wide.
The experts said SIM cards sold for as much as N35,000 but are given out for free in some cases today because competent operators came into the system and market forces balanced the sector.
According to the experts, a productive economy will grow when forex remained available to every Nigerian competent businessman to export products of latent cooperative advantage which has the support to grow its value chain.
In his submission, Professor Utomi said “How do we ensure that more people are producing and exporting and earning. If they are exporting and bringing in? The product will go to a very disaggregated market
“We are in the fourth industrial revolution. We are going to have we are going to get to fintech that will dominate the market today, when we get there, the Central Bank will not be able to be threatening up and down it will be a losing game.
“You need rules to deal with the fundamental issues more rather than dealing with these self-inflicted and self conflicted challenges.
“We must go to a situation where our passion is for encouraging production. I know that the central bank has been doing a lot of things to encourage production but the central bank is way out of its depths in the way the central bank is providing these things.
Utomi maintained that wholesome subsidies promote rent agents who took advantage of the process and make huge gains against the consumer whom the government sought to protect.
He described the theory of protecting the masses from the high coat in various sectors as a mere ‘fallacy of subsidy’ which ended up with more difficulty as against developing the economy and expanding opportunities.
His words: “The naked truth is that we have examples of that shows the limitation of that generalization, is true that if we want to grow this economy, we may need to have a certain limited industrial policy to guide the path of growth but using the protection of consumers as an excuse for people creates an opportunity for people to extract rent falls in the face of experience.
“Latent comparative advantage, you take the sesame seed value chain, then you provide limited support around sesame seed so that in a few years, you can create that value.
“You protect consumers by getting efficient players not give licences to your friends and they become incompetent no! You get the very best from the world and you issue them licences and you see the price tumble down in that area, we saw it happen in the telecom sector.
“So that excuse of protecting poor Nigerian is used and abused by people who want to extract rent or give advantage to their friends. I do not buy that for most of our economic sector.”
Emphasising the place of a productive economy driven by market forces, Gabriel said market forces are critical to deter any of the growth of an economy and any attempt to shut it have failed and examples abound globally.
He said Nigeria must take “The essential lesson which is that you cannot fight the market. From the former socialist and communist countries to Venezuela to Easter Europe even to African countries, politicians can do what they like, but you cannot fight the market.
“The market will establish itself and de ide your faith, that is why Venezuela is where it is today. Politicians can take any decisions and do what they like; they can decide to manipulate the system; they can decide to ignore the market; they can decide to dictate to the people what policies they want.
“The market will assert itself. The market will reward you as it has shown in the case of countries that understand and follow the market like Japan and will punish those, who do not want to respect and understand that the market Is like the natural flow of water.
“Water must flow in a certain direction. If you create a policy that blocks the flow of water up to a certain point, you build a dam at some point the water will destroy the dam and everything you put there
“The reason is simple, the government have to understand that the economy has its own rules, and must conform to the market own rules.
“Alternatively you build a structure that you struggle to maintain sooner or later, the market will overrun it.
“Countries that have succeeded are those that understood it like China, you see China when they understood the market, and they understood that the socialist economy was not going to grow the country, they decided they were going to have the Chinese communist party which is still there till tomorrow, they allowed a free market, so China is a good example of sensible politics.
“When they said we will still keep a communist political system that we think makes sense but allow market principles it has worked.”
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