Re: Buhari’s “wish list” for G7

The G7 contributes about 46% of the global Gross Domestic Product, GDP and more than 64% of the net global wealth. They requested a “Wish List” for support from President Buhari, which I recommend should comprise only Sectors or Projects that have the capacity to be self-financing and self-sustaining, without any dependency on public funds […]

The G7 contributes about 46% of the global Gross Domestic Product, GDP and more than 64% of the net global wealth. They requested a “Wish List” for support from President Buhari, which I recommend should comprise only Sectors or Projects that have the capacity to be self-financing and self-sustaining, without any dependency on public funds after take-off, to avoid another debt trap that may shackle us for years to come.
Despite this great gesture, the intentions of the G7 Countries may not be completely altruistic, given their own economic reality that has grounded growth to almost a halt. Indeed, Leadership in the G7 and other Western Democracies has become increasingly challenging, as creative ingenuity is required to achieve the slightest increase in real economic growth, unlike ours, where even the mundane is seen as landmark. Furthermore, the G7 is also motivated by the rapacious appetite of the Chinese for African natural resources to support their rapid development, coupled with their large “cash chest” to back their adventure.
In order to maximize the opportunities of the “Wish List”, we must be strategic, ensuring our best interest is key in our selection of projects.
The Government should not be the direct recipient or beneficiary of Funds, except if 100% grants. If not, it should only participate to the extent of a Third Party Guarantee.
All funding should support only Sectors and Projects that would create a ripple effect to result in the offshoot of additional projects and businesses.
Borrowed funds should never be used, even with very low interest rates, for social services, except if applied to a commercialised project that can independently pay back from operations.
I, therefore, recommend the following for support:
*Security: President Buhari has already given this the priority it deserves, as the foundation for any further development. I believe the confidence in achieving a stable and secure Nigeria, within the shortest possible time, as vested in our President by our votes, is not misplaced.
*Electricity: This is the cornerstone of infrastructure development that would drive all other Sectors. I believe that we should seek expertise and funds to support the private electricity companies. However, the recipient companies should be closely monitored to ensure judicious use of funds, with stiff penalties applied when necessary.
*Since bringing the Refineries back to full operations, has become a sink hole to the National Treasury, we should quickly construct Modular refineries, operated by Private Companies. Modular Refineries take about 6 – 12 months to complete and should resolve products log jam, while minimising the dangerous strangle hold of Labour Unions. The downstream sector should be completely deregulated for prices to be determined by cost of operations and competition.
*Selecting 3 areas for private sector investment, with a short to medium term recovery period:(i) Mass Housing (ii)Niger Delta Ocean Front Real Estate Development and (iii) Transport and Transportation.
*Mass Housing: Commercial and Residential real estate development must be made a real priority. We should take a leaf from the age of reconstruction in post – World War II Europe, Germany, England, France, etc. the United States after the Great Depression, present day United Arab Emirates and China, where real estate is the effective tool used for rapid economic development. Long term external funds will finance Buyers for the long term through Mortgage Banks, while low interest funds shall support Developers through Commercial Banks. Our largely idle Pension Funds could be used to complement the external funds.
* Even without the benefit of oil, developing the water front cities of the Niger Delta offers immense opportunities to diversify our economy and boost revenue, as well as, put an end to the insecurity in the area: With the creeks cleaned out, wearing a new look dotted with high rise office buildings, flotillas, hotels, water transport, etc., there will be no dingy areas to encourage criminal activities.
*Low interest, long term funds to the private sector, for the development of tolled inter-city highways, intra-city public transport, monorails, cable cars, ferries, jetties and ports.
If the above projects are well structured and supported by G7 Countries, their collective impact on the Nigerian economy, within the next 12months will be enormous. The various tiers of Government can then apply their funds to support other Social Services such as, Rural Development, Education and Health. They will also rapidly reduce poverty and poverty-induced crime, while increasing the rate of employment and the overall living standards.
Loretta Aniagolu, Managing Partner, Finance, Investment & Trade Consult (FIT Consult Ltd)