• Sunday, July 21, 2024
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BusinessDay

Industrialisation, jobs and the future of Nigeria           

OBADIAH-MAILAFIA-2
Industrialisation is the key to Nigeria’s future. The people who manage the economy of our country right now do not understand this. I humbly submit that without massive industrialisation, Nigeria is doomed. How else are you going to absorb the rising sea of millions of unemployed youths? Every year thousands of graduates enter the job market. Many of them spend more than 5 years without finding jobs of any kind. Industrial development is the only means by which to absorb this rising army of unemployed youths.
We need a strategy of rapid mass-scale industrialisation anchored on agriculture and enhancement of the value chain and building on SMEs and linking them to bigger firms for domestic and export markets.
It has been estimated that in 30 years’ time Nigeria’s population will attain the figure of 350 million, surpassing the United States of America. With such a demographic size and with abundant natural resources, Nigeria is bound by destiny to become an economic giant of world stature. Accelerated industrialisation is not a matter of choice; it is a necessity. It should aim to produce import-substituting items for the emerging middle class and products for world markets.
Nigeria is more strategically placed than any other country to be the engine of industrialisation throughout the continent of Africa. Given our relatively lower labour costs, abundant resources and vibrant entrepreneurial cultures, we are destined to be Africa’s economic growth pole. Government must actively encourage the manufacturing sector. We should build local industries based on total quality management (TQM). That movement, started by Professor William Edwards Deming of MIT, was central to the supernal technological performance of Japan in the seventies and eighties. We need to embrace that gospel and create products that can compete with the best in the world.
Talking about industrialisation, I am worried about the trajectory that we are pursuing so far – one that is largely centred on Lagos and the Ogun axis. Lagos, our commercial capital, is getting highly over-congested. In a few years’ time it is projected to become a mega-city of over 20 million people. There is no more room for expansion in Lagos in terms of the sheer physical space. What I would propose is that we have 10 industrial zones as the clusters of mass industrialisation in Nigeria: Lagos, Port Harcourt, Aba, Enugu, Kaduna, Jos, Makurdi, Maiduguri, Kano and Kaduna.
The technology choices for the manufacturing and industrial sector should be anchored on labour-intensive techniques. The aim is to link industrial development to employment creation. It has been estimated that the national average unemployment rate hovers at 20 percent. Youth unemployment, however, stands at over 40 percent. The figures are worse for the North and the North East, where they have been placed as high as 65 percent. It is a time bomb.
I am dissatisfied with the poor and mediocre approach that the administration has taken regarding the unemployment challenge. We should not be talking of 20,000 jobs here and 5,000 there. We should be talking, instead, in terms of creating jobs for 20 million people within the next decade. We need a different and more radical approach. For example, we should encourage and provide incentives for the states where the Youth Corpers are serving to retain them for 5 years, even if this requires the FGN providing some form of subsidy.
At the same time, the strategy of infrastructure development should adopt the implementation framework of the “public works system” using direct labour where feasible. Direct labour on the roads and rail development will provide jobs to millions of young people. It will have a ripple effect throughout the economy. Massive industrial development will also absorb millions of surplus labour. We need jobs, jobs, jobs! All investors coming to Nigeria must be required to recruit local labour and foreigners should be employed only where there is rigorous evidence that Nigerians cannot do those jobs. A situation where Chinese companies are bringing in their nationals even for the most mundane jobs is totally unacceptable.
A major challenge of employment in Nigeria is the fact that our young people do not have the kinds of skills that are needed in global competitive markets. The government therefore needs to invest heavily in technical and vocational education. Germany and Singapore are world leaders in vocational training. We need to borrow from their models and design a framework that will provide millions of young Nigerians the opportunity to acquire skills that will make them more employable to firms while also enabling them to become self-employed. Our educational curricula should also be re-oriented from the preoccupation with theory and rote learning to the applied sciences where they can have skills that can be applied to the real economy and the global marketplace.
One of the criticisms of the current development strategy is that it has fostered growth while making little or no inroads on jobs. Indeed, the World Bank, in a major report on the Nigerian economy a few years ago, characterised our development path as that of “jobless growth”. We need a different approach anchored on re-engineering prosperity and accelerating growth throughout the country.
A fundamental lacuna in our development strategy is the fact that the economic team is dominated by people whose mindset is deeply embedded in the Washington Consensus which belongs in the scrapheap of history. If you look at the most advanced new emerging economies such as China, Brazil, Singapore, Malaysia and South Africa, you will notice that those who occupy the key economic policy positions are trained in the more radical structuralist school of economic thought. Whilst they appreciate the logic of markets, they are sensitive to the dictates of economic prudence and global geopolitics. They understand that there is a Babylonian system that aims to keep us at a lower status as the dumping ground of the world. We who love our people and love Africa demand nothing less than the emergence of first-rate industrial-technological states.
The so-called “Beijing Consensus” of economic development is premised on the need to go beyond the “Washington Consensus” and to pursue a more pragmatic approach to economic development. Such an approach combines commitment to market principles with the pursuit of science and technology and massive industrialisation. The Washington people will never give you such in a thousand years.
Another missing link relates to policy implementation. Nigeria is not short of grand visions and ambitious blueprints. What is lacking is the capacity to implement. The bureaucracy is weak. It is manned by third-rate people who cannot tell their right hand from their left.
I am afraid to say that the Finance Ministry in Nigeria currently does not have an economic administration as such. In advanced countries, the Finance Ministry operates a strong Treasury Administration. In Britain, the Chancellor of the Exchequer has under him hundreds of economists with superior training in economics and finance. The same thing applies to the Ministry of Finance in Japan. The role of an economic administration in the Treasury is to do serious analytical work in planning and implementing all aspects of public finance and economic development.

It is not enough dream dreams and see visions; we must have the mind and the capacity to bring those visions and dreams into reality. That is the task of the next administration.

 

Obadiah Mailafia