A great day to reinvent Nigeria’s economy – 1

The president himself dismissed it as politics recently, but I take the liberty here, to critique some of the positions taken by these jugernauts who have managed Nigeria’s economy.  In my view, Soludo stayed within the ambit of the unwieldy, and seemingly perennial importance of Crude Oil – and indeed other extractive resources – to […]

The president himself dismissed it as politics recently, but I take the liberty here, to critique some of the positions taken by these jugernauts who have managed Nigeria’s economy.  In my view, Soludo stayed within the ambit of the unwieldy, and seemingly perennial importance of Crude Oil – and indeed other extractive resources – to the Nigerian economy. Some other analysts have also played up solid minerals but no country has ever become great based on extraction of some resource in the ground.  This informed his alarm of further imminent collapse of the economy, and of course, his challenge to the political parties, to COST their promises.
Costing however is of utmost importance as we know that politicians are great at making promises. Based on Soludo’s admonition, I ‘costed’ some key reform initiatives that I think the next government (the APC) should adopt as a matter of urgency, and found that we could generate a lot from reorganizing this economy and using our own cash flow to ‘reboot’ the system. This does not preclude other great ideas from different quarters.
TECHNOLOGY AND DISAPPEARING CAREERS: I will take up the erudite Professor of Economics on his assumptions about the ease of job creation. Well he’s been there before. It wasn’t easy. It is even more difficult going forward, as computers and technological innovations have taken over where human beings used to be relevant. Walk into any of our banks today and see how many empty cubicles (people laid off), as we all transact on the internet, on our phones or when we cannot avoid it, on ATM machines.
AUSTERITY AS SHOCK TO OUR SYSTEMS: The response by the Coordinating Minister (CME) lends itself to some critiques  especially as it relied on the figures from NBS regarding GDP growth rates, Inflation figures and the rest. No one can totally excuse that office from blame regarding the sudden declaration of austerity measures, even as we are still in grand celebratory mood, rejoicing about our good fortune (recall all the celebrations of the recent past). The current belt-tightening and austerity, to many Nigerians, is like being asked to come and receive 12 lashes of the whip while your friends are with you celebrating your birthday.
The people are shocked actually. Entrepreneurs, like me, are in a quandary. And no, we are not ‘charlatans’ as the CME’s rejoinder called those of us complaining about the sudden hard times, which is occasioned by the inability/refusal of government agencies to pay contractors, or the cancelation of several projects.
There is also another evident problem with the CME’s reply, as it twice mentioned the reliance on Nollywood as a bastion of youth unemployment.  Many reflective Nigerians would advise that the focus on singing, dancing, acting and comedy should reduce (they will be there anyway), but they cannot be held up by government as key policy planks. Because really, they don’t produce anything that we seriously need as a matter of priority and vision, and it is doubtful if they generate commensurate foreign exchange compared to government’s investment in them.
FOCUS ON EMPLOYMENT FOR SECONDARY SCHOOL LEAVERS: Again on the CME’s reply, it is revealed that the concern about employment generation still focuses on ‘GRADUATES’, but I believe we must now focus our efforts on secondary school leavers, like it is done elsewhere, even in Ghana. If enough incentive is put there, the disposable income of parents and other graduate workers will certainly increase, the burning drive to attend university at all cost will reduce, and our youth can get more responsible earlier in their lives (increased patriotism).
This is how it had been in Nigeria, decades ago. Plus we can then enforce the ban on street trading and unruliness in the public sphere. I was able to distill this from the rejoinder when it was stated that there are 1.8million new entrants into the labour force yearly. This should be the number of those leaving Universities, Polytechnics, Colleges of Education and such like. But I think it will help government greatly, if it properly alarms itself, by adding the figure of secondary school leavers.
FEDERALISM – CAREFUL WHAT YOU ASK FOR: Mr Peterside Atedo’s contribution about the recently concluded CONFAB (of which he was a delegate) is of interest to me especially in terms of our so-called ‘Federalism’ question and his assertion that that was the only way forward.  I researched “Federalism”, and realized, to my shock, that what he desires – as does everyone else who talks about “the right of states” in Nigeria, is actually known as “Anti-Federalism”. In the USA, where this concept comes from, Federalism refers to the “concentration of powers at the centre – the Federal Government”.  But that said, the USA till today practices that Federalism where the ‘centre’ gives to the states, certain amounts from what it derives from its “federal might”.
In fact, those who call for total state powers in the USA are associated with Jim Crow laws and Segregation.  In oil-rich Canada too, the principle is that there is a certain standard of living ALL CANADIANS must enjoy, and so, the Federal Government undertakes a ‘balancing act’, ensuring that poor states get some assistance with infrastructure and so on. In the USA, Reaganomics in the 1980s came up with what they called “New Federalism”, whereby the Federal Government started to give States “Block Grants” (meaning the states can use the money as they like), as against what obtained before then (Categorical Grants) – where these ‘grants’ are meant only for specific projects and thus reduced the moral hazards (a situation where a state chief executive misappropriates/embezzles the funds).
Why don’t we adopt what the USA discarded – specific project funding for States.  
What we should purge ourselves of, in my humble opinion, is that tendency for mutual disdain.  Some will lag behind, but love conquers all.  There is indeed a history to our present circumstance, as Lugard prevented the spread of western education in the north. Hence there was a genuine need to catch up.
The north – according to the biographies I’ve read – was not inculcated into governance in Nigeria, in the National Assembly in Ibadan, until 1947, whereas the south had been there, learning, educating and developing, since 1922; a clear 25 years gap!  We should not encourage a situation of continued income disparity and inequality within our states. Fixing the corruption question and holding politicians and other appointees accountable may be a better route to follow. I believe dialogue – and a dollop of sincerity – can heal our wounds.
MANY OPPORTUNITIES FOR PROGRESSIVE TAXATION: But back to the core issue of how to finance our next phase of growth, and in direct response to Soludo, I urge that we think about some progressive taxation. A simple and well-designed policy on “Car/Vehicle Tax” for example, will go a long way. In the UK as in almost every advanced country, that is how it is done. Car taxes are levied based on engine capacity, and has the advantage of improving the environment – and perhaps fuel consumption over time.
How much can we get from this? Say we have 10million cars/vehicles in Nigeria. If an average of N25,000 is charged per year (with Toyota Prius or energy-efficient cars paying a token of N5,000 and gas guzzlers N50,000), we can rake in at least N250 billion annually. This is fresh income for government.