• Wednesday, May 22, 2024
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How certain things do not change in Nigeria

How certain things do not change in Nigeria

As Nigeria attains 60, there is a sense in the saying that certain things just do not change in the country. Apart from the unusually long turn-around time for government led projects in Nigeria, we are confronted by some of the same issues since the last 30 years or more.

For instance, when Nigeria’s business elite and the top military brass gathered in Abuja for the first ever Economic Summit organised by the Nigerian Economic Summit, NESG, on February 18-20, 1993, there were presented with a list of national challenges, which if you look well, can be presented to a national gathering today.

At that first Nigerian economic summit in Abuja, the atmosphere was sombre, the air filled with expectation.

The military band rendered the national anthem to get proceedings off the ground but not many in that historic audience could take their eyes off the dire economic chaos confronting the nation.

The background to that first summit could be a fitting setting today, more than 27 years on as Nigeria celebrates its 60th Independence anniversary.

As the gathering was told at the opening, “despite abundant natural and human resources, Nigeria remains a basically poor country. Up to the end of the ‘60s, the country was self-sufficient in food production and even a net exporter of agricultural produce.

“Since the early ‘70s, as oil became a major foreign exchange earner and contributor to Gross Domestic Product, GDP, other sectors of the economy, especially agriculture and manufacturing, were relegated to the background.”

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A critical look at the catalogue of Nigeria’s economic imbalances presented that day highlighted the pervasiveness of the use of CBN’S ways and means advances to fund the Federal Government just as it is today. Speakers at that gathering noted that agriculture had declined to the point of Nigeria becoming a major importer of food; industry was still largely dependent on imported raw materials; limited progress in industrialization with industry facing low capacity utilization and incapable of being competitive.

Infrastructure was said to be decaying and not meeting the demands of a rapidly increasing population and a modern industrial sector while human resources development had suffered from neglect as institutions and programmes failed to keep pace with global competitive and technological advances.

Finally, the audience was

told that “macro- economic structures had deteriorated due to intractable inflation, a suffocating internal and external debt burden, continued and seemingly irreversible Naira depreciation, increasing import dependence, steadily increasing interest rates, and erosion of savings and investments, with a consequent industrial decline and increasing unemployment.”

It was in the light of this litany of economic woes, said the Summit report, “That Chief E. A. O. Shonekan decided to bring both the public sector and the private sector together to explore jointly our economic problems and to formulate new strategies to address them”.

The objective was to establish an ongoing dialogue with the private sector; obtain feedback on the state of the economy and the current investment climate; define priority economic issues and formulate an economic action agenda for Nigeria and challenge the private sector to

be proactively involved in Nigeria’s economic development. In the course of the three days that followed, participants were provided the opportunity to reflect on the specific problems impacting each industry, sector and sub-sector of the economy.

They also discussed the reforms and policy changes required to resolve these problems in the short, medium and long term. Finally, from these discussions emerged methods ad tools to ensure effective and prompt implementation of key action points with primary focus on the so-called new frontier priorities for government, which were listed as education, economic stabilisation, privatisation, deregulation, infrastructurisation and democratisaton.

Shonekan, who was then chairman of the Transitional Council and Head of Government, had welcomed participants in his well-received address titled “The Challenge

Ahead”, in which he said Nigeria was at a watershed in many respects.

The highlight of his speech was to introduce the national campaign to increase savings and private sector investment to levels required to fund sustainable growth of the economy at the rate of 5-10 per cent in real terms per annum.

President Ibrahim Babangida delivered a moving presidential address titled “A Lasting Legacy” listing Nigeria’s urgent priorities to include cutting inflation to below 5%, stabilizing the exchange rate of the Naira, moderating interest rates in line with changes in the price levels, mounting an external debt relief programme aimed at securing generous debt relief, defining appropriate public sector roles which assist the private sector to become the engine for economic development and provision of an enabling environment to attract private investments on a large scale. It distinctly sounds like the presidential speech was prepared for today!

At the end of the three-day summit, a 128-page report was produced, titled “Economic Action Agenda”. It opens bluntly with the section, “Facing Reality”, which noted that “Nigeria needs the outside world at a point in time where we are increasingly marginalized by our failure to conform to global rules and by the relative greater attractiveness of other countries to private investment.”

Describing the economy as one in free fall, the economic action agenda set out the main deliverables as including letting free markets work which was meant to see phased increases

in petrol prices with total deregulation, privatising refineries and establishing a free foreign exchange market for Nigeria. According to the report, “the foreign exchange market is not well understood and it unfortunately has become a subsidy system for the informal sector and for banks that cannot compete.”

It was agreed that banks should be allowed to buy and sell foreign exchange without onerous documentation, thereby creating a free market.

It was agreed that upstream oil and gas companies, exporters and domiciliary account holders should be required to sell their FX on the free market and report statistically to the CBN.

Under this rule, government parastatals, as well as sates and LGAS were to be required to buy foreign exchange on the free market. Finally, it was agreed that government borrowing should be totally through open market operations, OMO at free market interest rates.

On petroleum products prices, that first summit agreed that Nigeria should “adopt appropriate price for petrol products so as to recover all cost with reasonable returns.” Almost 30 years after, Nigeria is still struggling to see the light in this prescription.

The summit report urged that Nigeria should “make NNPC fully autonomous and fully commercialized.” This is what the new PIB seeks to do today and it is to the credit of the NESG and its leadership that it has remained consistent in advocating these policy shifts and many of what the government is being encouraged to do today, were first propounded almost 30 years ago. Happy independence!

It was in the light of this litany of economic woes, said the Summit report, “That Chief E. A. O. Shonekan decided to bring both the public sector and the private sector together to explore jointly our economic problems and to formulate new strategies to address them”