The 23rd Nigerian Economic summit has come and gone. But the issues at the summit, such as blue economy, agriculture and others, must be taken serious by the Federal government for its diversification drive to make meaning, writes NDUKA CHIEJINA.
Nigerian Maritime Administration and Safety Agency (NIMASA) Director-General Dr. Dakuku Peterside hit the nail on the head at the 23rd Nigerian Economic summit. The time to take advantage of the oceans and boost the economy was now, the NIMASA chief said at the summit with the theme “Opportunities, Productivity and Employment: Actualising the Economy Recovery and Growth Plan”.
Peterside thus urged Nigerians to key into the opportunities afforded by the Blue economy, which he stated, is the fastest growing sector in the world with enormous business potentials. He added that with the length of the nation’s coastline and the attendant volume of maritime trade, Nigeria is at an advantage of developing the blue economy and stakeholders have to actively participate to reap the benefits of the sector.
According to Dr. Peterside, “developing the blue economy is paramount across the globe now, and the public and private sector have to collaborate to sustainably harness the potentials of our maritime sector for the benefit of the Nigerian economy, especially as the Federal Government continues the economic diversification drive”.
The NIMASA DG also stated that economies of Singapore, Ukraine and South Korea thrive on the activities of their maritime sector.
He further suggested that with improved maintenance culture, adequate data management and statistics as well as articulated actions from stakeholders backed up with political will, Nigeria will be a leading light in the comity of maritime nations.
Dr Peterside advocated synergy within stakeholders stating that the Agency with the support of the Federal Government is working assiduously to ensure that Nigerians reap the benefits that abound the sector. He pointed out that the newly approved maritime security architecture will effectively reduce piracy and other related sea crimes.
For the chairman of the United Bank for Africa (UBA), Mr. Tony Elumelu, the country must resolve its electricity supply challenge for the economic diversification drive to make sense. He suggested that the Federal Government should reconsider the ownership structure of Electricity Distribution Companies (DisCos) with a view to taking over controlling shares of the firms.
Elumelu, who is also the Chairman of Heirs Holding, said: “In as much as some existing investors might not like the idea, the Federal Government could not continue to allow the Discos hold the nation down with inefficient power distribution.”
His solution to the epileptic power supply in the country is the “recapitalisation of the Discos and then increase its stake from the current 49 per cent to 51 per cent and sell the controlling stakes to new investors, as the current operators have become obstacles to the realisation of the nation’s power capacity goal.”
Elumelu added: “Our people are very enterprising and they want to succeed. But they need the right environment to succeed. I appreciate what the government is doing for electricity but we need to do more. I empathise with the government on its efforts in that sector. But Mr. Vice President, I think there is a lot we can do to correct the ownership of that sector without affecting the property rights of the investors. That sector must be dealt with it for us to have power to do business.
“Government, with over N700 billion provided. In a few months time, that will be exhausted. The market should be able to sustain itself. This is what I think. The government has to take actions that will ensure the adequate funding of the operations of the Discos.
“Mr. V.P, I know some of the operators in this sector will not like this. This is my idea. We cannot reverse what has been done. But we can creatively address what has been done.
“If government to my understanding, has 49 per cent of the Discos and the private companies have 51. Can we ask these companies to recapitalise. Let the FG recapitalise. They will not be able to put in more capital. So the federal government through the Federal Ministry of Finance Incorporated should increase federal government holding.
“Then post recapitalisation, the Federal Government sells its controlling shares to new investors who have the financial wherewithal to properly finance the operations of the Discos. This is important because in a situation where current operators don’t have the funds to run them, if the federal government wants to sell its shares in the discos, investors who should have brought in their capital won’t come in if the controlling shares continue to remain with the current operators.
“When this is done, then we can have new investors who can come in and run the Discos efficiently. It doesn’t matter where they come from but they should be investors who have the financial capacity and tested expertise to manage the distribution segment of the sector in such a way that they can deliver effective service.”
As if addressing the concerns over poor electricity supply, Vice-President Yemi Osinbajo said the National Electricity Regulatory Commission would this month issue directives on independent metering.
He said: “The eligible customer regime allows a willing seller, willing buyer arrangements in the sale of power. While the independent metering directive allows independent entities aside from registered power distribution companies to sell and install meters to customers and be paid directly as collections are made from metered customers.”
This, he said, will break the distribution gridlock and there is good cause to believe that we will achieve the 10,000MW envisaged in the ERGP.”
Osinbajo’s emphasis at the summit was how to improve the ease of doing business in Nigeria. He said the Federal Government has resolved to dismantle ‘institutional hurdles’ towards smooth business operations in the country.
He assured the business community that the incidence of multiple Customs checkpoints, especially on the eastern axis, would be looked into to create a conducive investment climate in the country.
The Vice-President said government received several reports from concerned Nigerians “who describe the checkpoints as inimical to growth and development.”
Osinbajo also revealed plans “to dismantle all clearance bottlenecks at sea and airport borders to ensure quick facilitation, while government will implement reforms at the National Agency for Foods Drugs and Administration Control (NAFDAC) and the Standards Organisation of Nigeria (SON) to make their operations quicker and more orderly”.
The Vice-President lamented that “our budget for this year is about N7 trillion. That is not enough to address all the infrastructure challenges we have and that is why we will always partner with the private sector to address them.”
He said the Buhari administration remained committed to partnering with the private sector to address the country’s infrastructure shortfall.
Osinbajo said: “Foreign exchange reserves have risen to about $33 billion and end users have increased access to foreign exchange partly due mainly to increased export earnings and remittances as well as the introduction of a dedicated transparent window for Investors and Exporters (NAFEX).”
The results, he said, “have been encouraging as the inflows of capital in the second quarter of 2017 of about $1.8 billion were almost double the amount of $908 million imported in the first quarter of the year.”
On the concerns of high interest rate, Osinbajo said the government is “concerned as most of you are, with the very high interest rates and of course most of that have to do with government borrowing. Since the evidence points to a crowding out of the private sector, the Federal Government is reducing its demand for domestic paper and will seek to refinance maturing domestic debt with longer tenor and cheaper external borrowing”.
“Intervention funds will continue to be made available through the Bank of Industry, and repositioned NEXIM and Bank of Agriculture and the newly established Development Bank of Nigeria,” the vice-president said.
Minister of Budget and National Planning, Udoma Udo Udoma stated that “to get out of recession required our refocusing the economy from reliance on crude oil to enhancing non-oil revenues, and the non-oil economy. In short, we had to quicken the process of changing from a mono-culture economy to a diversified, competitive economy, in which we grow what we eat and consume what we make.”
Some of these initiatives, he said, “have contributed to the second quarter performance numbers recently released by the National Bureau of Statistics which indicate that, after five quarters of contraction, we have now recorded a small growth of .55 per cent.”
The Chairman, Board of Directors of Nigerian Economic Summit Group (NESG), Kyari Bukar, said the support of governors for businesses was critical to growing the economy.
“Every business,” he said “is a tenant of a State and we believe that our advocacy for a more globally competitive environment must not be limited to the Federal Government. The NESG is increasing its focus on state governments that are willing to dialogue with us to address competitiveness and the ease of doing business at the sub-national level.”
Udoma expressed government’s commitment to the faithful implementation of the Economic Recovery and Growth Plan (ERGP) 2017 – 2020 that was launched by President Muhammadu Buhari on April 5.
The minister said the Buhari administration has demonstrated clear commitments to working with the private sector through the recent concession of some nation’s airports and other policy interventions to provide a favourable environment for their business operations in Nigeria.
He also said government was focused on making the Nigerian economy globally competitive and more diversified away from its mono-economic structure, hence working with the private sector would be the surest way to achieve such objective faster.
Udoma said: “Government is committed to faithful implementation of the ERGP by ensuring that our annual budget aligns with the priorities of the ERGP and also special monitoring units have been planned in all MDAs to ensure effective implementation.”
He called on the private sector to work towards strengthening the ERGP Implementation Strategy and contribute towards its effective implementation.
The minister revealed that as part of efforts to grow the economy, next year’s budget would soon be ready for vetting by the National Assembly. The Executive, he said, has concluded plans to submit the 2018 budget to the National Assembly before the end of this month.
The Minister of State for Budget and National Planning, Hajia Zainab Mohammed, who spoke on Udoma’s behalf at a news conference to mark the end of the summit.
Hajia Mohammed said the prepared 2018 budget would be presented to the President shortly for the Federal Executive Council (FEC) approval before transmission to the National Assembly.
“We are working closely with the legislature. We want to ensure the budget is passed in December so that it starts to work from January 2018,” she said.
She said she was optimistic that the 2018 budget would be passed in time to meet the January commencement of the fiscal year as planned.
Speaking on the power sector tariff crisis, Hajia Mohammed stated that “it is clear no new investor will come without tidying the issue of tariff adjustment. They insist the current tariff is not sustainable but the new tariff will be a joint agreement with all stakeholders.”
The Federal Government, she said, “will carry out another privatisation exercise for the power sector because what we sought to achieve by the previous privatisation has not been achieved. It has not worked well.”
She added: “Government is still a shareholder in the current arrangement and so we want to call all existing stakeholders to the table and agree on way forward. We will agree on the level of shareholding and other issues so that this power issue can be addressed once and for all.”
Power, she said, “is key to economic development and it is something the government is determined to ensure it works.”
On private sector players’ worry that government heavy local borrowing has crippled banks’ ability to lend to them, the minister said: “The government will reduce local borrowing for private sector to get adequate credit to operate.”
On the successful execution of the government’s Economic Recovery and Growth Plan (ERGP), she said: “We will review them and we have said the functional economic laboratories will be set up across the country in two weeks from now. We are not waiting for months. It is part of the recommendations.”
On bills pending before the National Assembly, which if passed will accelerate economic growth, Hajia Mohammed said: “There are pending bills and we always try to carry out economic impact on them. For instance, the Competition Bill has the capacity to create 381,000 jobs annually, generate revenue of N148.3 billion yearly. It will also lead to a 10 per cent reduction in price of goods.
“For the National Transportation Commission Bill, it will also boost job creation and government revenue”.
Stakeholders will sure be on the look out to see if the deliberations at the summit will be put to use in the days to come.
