• Monday, May 27, 2024
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FG and need to promote stimulus for industrial growth

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 There is no doubt that the Federal Government of Nigeria wants to achieve economic success through the Transformation Agenda. Current economic policies, work-plan and programmes being implemented at various levels point to this fact. Part of the efforts being made is in the area of improving power generation and distribution through privatisation of the state-owned Power Holding Company of Nigeria plc (PHCN) by the Bureau of Public Enterprise (BPE). The sale and transfer of services responsibilities to capable, world-class private firms is a proof of strong intent by the government to improve on power supply in the country. The investors in the power sector, similarly, are believed to be serious-minded business organisations, since their primary aim is to make genuine profits and achieve sustainable success as they become responsible for any lapse in the supply of adequate and uninterrupted power to consumers, both for domestic and commercial uses.

Availability of adequate power supply in the nation is one vital service that is of essence for growth in the economy. A successful privatisation of the power sector will relieve the government of managing the administrative workforce that would be more efficiently handled by private firms. On the other hand, the strategy helps and strengthens the administrative capacity of the government by allowing it to concentrate more on legislative governance and pushing down economic responsibility to the investors in the power sector. This setup appears to be arranged in such a manner that a scenario would be created where the government’s workload in grappling with the redundancy that always surrounds the workforce of state-owned enterprises would be less cumbersome, making for overall efficiency. This policy, if successfully achieved, would stimulate economic growth in the real sector of our economy.

To expatiate, one recalls that an extraordinary session of the National Executive Council (NEC) was held on Thursday, June 19, 2008, and $5.37 billion was voted and approved by the FG and the state governors for the energy sector. The sum was earmarked to tackle power, identified as a major problem and limiting factor to the nation’s economic growth through industrialisation. Yet, not much seems to have been achieved by the PHCN in adequately powering the domestic, commercial and industrial needs, though the NIPP is making efforts. This situation necessitated the privatisation bid to cure the unconscionable headache the industrial sector is facing. Once this problem is satisfactorily solved, our economy will experience a boost from activities in the manufacturing sector, manufacturing being the solid foundation for sustainable economic growth. As Akio Morita once said, “An economy can only be as strong as its manufacturing base.” A successful privatisation of the power sector will definitely spark off a systemic change, with a chain reaction mechanism and multiplier experieffect in all known sectors with macroeconomic indices within the economy. This supposedly enhanced productivity, with diverse and multiple products portfolio, will reposition the economy as an export-oriented one, from its present import-dependent status.

Exxon-Mobil’s proposed Escravos Gas to Liquids for Petrol (GTL) project, which was conceived with a daily capacity output of about 33,000 barrels per day meant to be marketed primarily in Europe, sets a very good example for our domestic manufacturing base. It is an initiative worthy of emulation by our prospective investors. Not only will it add a content value to our abundant natural gas reserves, it will also improve our export trade at the international market. In a similar vein, both the Aladja and Ajaokuta steel rolling mills are cardinal projects which Nigeria started at the same time with Brazil and South Korea for the purpose of repositioning the nation technologically. While the other two nations are doing well in the auto manufacturing sector, Nigeria is yet to take off. But it is not yet late if the FG starts now.

At this point, one suggests that the policies of the Nigeria Content Division (NCD) be effectively enforced in such a manner that even the mining sector operators and those in the agro-business be persuaded to copy the above example for their finished products as well. Such initiative will not only open windows for individual companies’ gains, but will also enhance employment generation and also generate revenue for the three tiers of government, plus their host communities in the 774 council areas of Nigeria. This is what the FG ought to do to attract and encourage more investors into our local industrial sector for the manufacture of all kinds of raw materials and finished goods. I believe the Raw Materials Research and Development Council will be of great help in this regard.

In the downstream oil and gas sector, the FG could apply some measures tasking and mandating all key players in the oil and gas market (the chemical marketers and oil exploration companies operating in the country) to stop importation of solvents into the country, with a specific timeframe given, to enable them set up such plants locally.

Consequent upon this, the present delay and argument on the 10 percent accruals to the host communities (as contained in the Petroleum Industry Bill) by the northern senators, in my opinion (I am not from the Niger Delta and at the same time I have northern blood), is irrelevant. Apart from the fact that the solid minerals policy presently practices it, the above initiative of stimulating industrial growth in all nooks and crannies of Nigeria will make us foresighted rather than myopic – by forging ahead and making progress. We should be mindful that in all of Nigeria, there are abundant resources that are judiciously spread (both gas, liquid and solid). So, why fight over a particular kind of natural resource? 

 

Nwachukwu writes from Onitsha, Anambra State. [email protected]

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