Reset opportunity for Nigerian economy

By Loretta Aniagolu

It is instructive to watch developed nations creating new economic concepts and policies to limit the damage of the effects of COVID-19 on their Economies. If the tables turned and African countries were printing money and distributing cash gifts directly to their citizens, the IMF and the World Bank, with our indigenous economists, would cry foul, objecting with superfluous economic jargon. I hope Africans are alert to this irony!

I have long held a conviction that Nigeria must develop her own original and tailored policies for real economic growth; the COVID-19 pandemic, combined with the slump in crude oil prices, have buttressed this. The Nigerian economy will suffer significant adverse effects due to these events, with potentially catastrophic consequences, unless we make major adjustments.

Below are a few of my ideas for these adjustments, seeking the best for and from Nigeria’s citizens:

Our journey to building a great nation begins with defining our national ethos and what it means to be a Nigerian. Who is a Nigerian? Why are you a Nigerian? The leaders and institutions of Nigeria, must put that “Nigerian” first!

We build the body to nurture the soul; our informal sector and unemployed youth need assistance, incentivisation and mainstreaming. To achieve this, cash gifts of N10,000 each, should be given to underprivileged 18-year olds and over, paid to their BVN registered bank accounts. This will aid data collection and allow a significant number to be mainstreamed. I recommend that governments make such payments monthly, until proper welfare and unemployment systems are established.

There is now a strategic opportunity for the local production of light medical and Personal Protection Equipment, PPE, to save foreign exchange, forex. The Bank of Industry, BOI, and others, should fund local tailors, IT firms and small-scale manufacturers, to produce PPE, under the supervision of the Federal Ministry of Health, to ensure compliance with regulations from NAFDAC, SON, etc. BOI should be given a target of facilitating the local production of a minimum of 50% of the nation’s light medical, PPE and essential products, within the next one year.

Development Banks and Institutions, DBIs, such as, Bank of Agriculture, BOA, and Nigerian Sovereign Investment Fund, NSIF, should fund the research and development of locally available vegetables and plants, that may have medicinal value; India earned over US4 billion from her herbal exports in 2018.

The Health Sector needs to be restructured, so that individual capacity and productivity are recognised and rewarded; while Public Private Partnerships, PPP, that can deliver comprehensive services are established. We must adopt international best practices into our medical regulations, such that hospital administrators, not medical doctors, are mandated to run hospitals and the numerous, small private clinics and hospitals are incentivized to fold or merge, for greater organizational capacity and higher standards.

Education is our national life-line, which requires urgent restructuring to drive innovation and excellence. FGN/States should evolve a system where intellectual property is not unionised or “ethnicised” and individual capacity and productivity is recognised and rewarded. Our tertiary institutions must be developed as fountains of ideas and excellence, run as not-for-profit businesses, by our best and brightest.  FGN/States should provide 30%-40% of the total expenditure required, while the governing council raises the balance of the 60%-70% from tuition fees, grants, patents, etc.

Our national budget needs to be re-jigged for better performance and functionality. Debt is an important part of supporting growth for any country; however, its collection and application must be deftly handled. Our debts, should be taken off the FGN/State books, and transferred to our DBIs, such as, Bank of Infrastructure, Development Bank of Nigeria, DBN, Federal Mortgage Bank of Nigeria, FMBN, etc., and CBN. Loans taken should be applied to infrastructure projects that can pay back and not to consumption.

The FGN/State books/budgets, should cover only administration (executive, judiciary, legislature) and security. security applies to security agencies; food security; education (research and development); healthcare; foreign affairs; rural development and the welfare of all citizens. In realigning our priorities, infrastructure projects such as, airports, railways and major highways, should be under long term concessions, and supervised by Ministries, Departments and Agencies, MDAs. The concessionaires, who will pay upfront fees, should be experienced, large corporations, with a solid track record of superior performance.

In order to incentivise the real sector and aggressively grow our economy, CBN should reduce interest rates to very low single digits. CBN should maintain a single exchange rate system for all forex sales and only through development/commercial banks and BDCs, without exceptions, to maintain the integrity of our currency and reduce fraud in the forex market.

The governing Acts of DBIs should be amended to increase their capital bases with public/private sector investments, with capable and experienced management to meet their new responsibilities. The poor performance of these DBI’s has constrained Nigeria’s growth, which has to be reversed.

The Federal Mortgage Bank of Nigeria, FMBN, should be one of the primary drivers of our national development. In most countries, the housing sector is used as a critical and strategic tool for accelerated development, as it creates large numbers of jobs. In developed countries, for every 100 houses built, about 300 direct jobs are created; in Nigeria, 100 houses generate about 500 direct jobs. So, with mortgages available, developers can confidently borrow to build, creating thousands of direct and indirect jobs. FMBN should be compelled to generate a minimum of 10,000 new mortgages for first time home buyers quarterly, creating about 50,000 direct jobs.

Achieving the above requires a firm political will that prioritizes merit and target-driven performance, placing the highest value on the lives of Nigerians. If this federal government could achieve the virtually impossible – removing the corrupt laden oil subsidy regime, it can make radical changes to reset our economy! We must turn this sad period into our collective greatness and the resurrection of our nation!