THIS NIGERIAN PROJECT (PART II) Countries like India, Japan and China have developed their local industries through protectionist policies. Can we really say the same thing about Nigeria? Our approach most of the time encourage smuggling. Unfortunately, we do not have the competence to deal decisively with smugglers (yet). A recent report on rice production reveals that we are likely to attain local sufficiency by 2015. This is some good news considering employment that would be generated and the millions of dollars that will be saved in foreign exchange. The bad news however is that while local rice production has gradually increased in the country, rice smuggling through land borders is still a major challenge. Still on Agriculture, we have actually done reasonably well in the Agricultural Sector. There are multibillion naira projects going on around the country and this is commendable. However, my frank advice to Honourable Minister Akinwunmi Adesina is that we should start looking at polices that will practically lift our farmers out of poverty. Otherwise, the current Agricultural transformation will only benefit “profit takers” through capital flight, rather than having meaningful impact in the lives of over sixty percent of our population that are engaged in Agriculture. One way this can be done is to develop a modern day equivalent of the Price Control Board. Commodity Price Regulation must be taken seriously in such a way that market forces are not left to the whims and caprices of commodity traders. In simple terms, crude price is known globally and organizations like OPEC have significant stake in determining oil price. How do we ensure that the price of a pod of cocoa is beneficial to the farmer in a village in Ondo state, and not pre-determined by a commodity dealer or a chocolate factory in Switzerland? Labour practices in the plantations springing up across the country must be monitored and Agricultural establishments must the audited by the Ministry to ensure that we are really impacting lives of farmers positively, and not just enriching the nouveau riche. It is important we do not create a Zimbabwe style Agricultural System where the minorities; in our case the big players and multinationals, accrue the benefits of the reformation, without any impact on the locales. We must ensure that we develop an effective out-grower system that is not only of benefit to commodity dealers, but also raises the living standard of rural farmers. In a bid to keep local jobs local, the citizens and Government both have a role to play. On the part of the citizens, we must start settling for nothing less than the best. We must start delivering our tasks, and executing contracts in such a way that Nigerian’s will be given the first right of refusal, before a job is contracted to foreigners. The only way this can happen is if we are exceptional in our deliveries. It is also extremely important that we keep to agreements and honour our words in business. June this year, at my younger sister’s wedding, the MC came late and we had to make alternative arrangement! I was livid with anger. Over time, I realized that it is the norm for comedians, musicians, caterers and other contractors to disappoint, and many (especially those in the diaspora) have been embarrassed after paying some of these guys for occasions such as weddings and other functions in Nigeria. It is a fact that many of these guys accept multiple shows, and end up arriving late or failing to show up at all. How do we promote the Nigerian Brand if this is how we operate? In other to protect our industries, the role of the government cannot be overemphasized. It is important that government starts addressing critical sectors of the economy, and ensure that we compete favorably with global counterparts. Otherwise, we will end up losing the benefits to smugglers and neighboring countries. A critical area that needs to be reformed urgently is our Ports. While there is an ongoing Port Reformation spearheaded by Ngozi Iweala, It is on record that many Nigerian Importers still ship goods from Asia and Europe to ports in Togo and Benin Republic, due to cheaper and less cumbersome clearing processes, resulting in quicker turnaround time devoid of unnecessary bureaucracy when compared with Nigerian Ports. Why are our Sea Ports and Airports the most expensive when compared to those of neighbouring countries inspite of our grossly inefficient and cumbersome processes? Goods smuggling through land borders leading to significant loss of national revenue has become the norm today due to the situation in Nigeria. This ends up killing the industries we are trying to protect, because the imported goods are now significantly cheaper due to a combination of evasion and avoidance of taxes and tariffs by fraudulent traders. Another critical area is enforcement of laws and insistence on globally acceptable standards. A recent article by Tim Newman detailed a startling account of how positions that ordinarily can be handled by Nigerian’s in the Oil and Gas Sector are taken up by foreigners. This report by a British Engineer of his experience working in Nigeria was widely circulated online, and it is criminal that the claims are yet to be investigated by the relevant authorities. On what basis were expatriate permits granted for such positions? About thirty years ago, Ford Chairman, Harold Poling, publicly said that the Japanese should “build cars where they sell them”. Mr Harold made this statement, erroneously attributing the success of the Japanese to sharp practices in Japan. This was the time when Japanese Cars started dominating American market. The US Government also stylishly declared that armada loads of ships conveying Japanese Cars from Tokyo to the US, was a matter of National Security. Guess what, the Japanese started direct production in America. Jobs were kept, income realized, and it was a win-win situation for Japan and the US Government, while US Businessmen had to revisit their production processes. It is crucial for government to understand its function in protecting the citizenry. We need to start thinking globally. How do we compel companies like Samsung; Apple; Nokia and RIM/BlackBerry; to start direct production here in Nigeria, where they have significant market share, and not just rent an office space as representative office? What about Honda; Toyota; Nissan and most recently KIA and Hyundai; and several other companies that have a huge presence in Nigeria without a single production outfit? How do we encourage, support and develop local manufacturers like Innosson Vehicle Manufacturing (IVM), Zinox Computers, Omatek among others, to start competing globally with their counterparts in places like India and China, creating jobs for Nigerians and leading the country away from the oil curse? Government recently announced an Automotive Industrial Plan which will encourage local vehicle production and ultimately phase out “tokunbo” cars. The Agric Minister also announced a plan to ban import of fish products into the country soon. I am actually skeptical about our approach due to the effect of smuggling that wipes out any potential benefit to the country and the citizens. A twin approach to solve these problems is by addressing institutional voids that encourage corrupt custom officials and fraudulent importers which makes a mess of our policies; and heavy patronage of local firms by Government, enabling the local firms into translate to global champions. In most countries in the world, Government remains the biggest spender. I have taken time to observe the American Embassy locally in Nigeria and elsewhere, and I noticed that only cars manufactured by American grown companies like Chevrolet are used by embassy officials. This is inspite of the fact that the Japanese brands have made a huge inroad into the America market. It is rather shameful that Nigerian Government officials drive Prado Jeeps, BMW and Mercedes Benz. We even saw a Porsche with a FGN Plate Number recently! Such actions only develop the economy of Japan and Germany, at the expense of companies like IVM, Anamco, and ultimately Nigerians. I know that Power is still a major constraint. But as we proceed with the Power Privatization, this is the time to ensure that we do not receive the short end of the stick. We are too big in the world for a BMW Factory, and many other Global Corporations, to be sited in South Africa. We are too big for companies like MTN, Nestle and Standard Chartered to have their regional offices where decisions are taken in Ghana, while the commercial outfits are left in Nigeria to cater for the market where they make a huge chunk of their revenue. We made a huge mistake with the telecoms privatization and today, we are practically begging MTN, with its most profitable unit in Nigeria, to list in the Nigerian Stock Exchange. We must never allow this to happen with the Power Privatization. Never again. Beyond listing in the NSE, we must position Nigeria through every legitimate means to start attracting big businesses. I am an advocate of free trade. But my recommendation for Nigeria will be the right mix of protectionism, coupled with the blockage of loopholes in the economy. It is also crucial that regulators understand the local environment, and are proactive in taking decisions. For example, we adopted a protectionist policy in the Cement Industry. Today, we are reaping the benefits, and even with about fifteen percent of the cement market taken by smugglers, Nigeria has become a giant in cement production globally. Unfortunately, we are still “protecting” the Cement Industry, and Nigerians pay one the highest prices for cement globally! This defiles any rational explanation, and it is time Government ensures a level playing field in the Cement Sector that will lead to price reduction. It is time we support and develop our local players to become global champions, and as much as the government has a role to play, every citizen must be involved in this goal of making Nigeria the country of our dreams. As we start positioning Nigeria for big bigness, it is time our Government stops going round the world cap in hand begging for investment at every global event. We can draw lessons from a country like UAE that has invested heavily in Tourism, Real Estate and Telecoms. Etisalat for example is a huge business today which was established in a bid to diversify from oil. We can do the same and more. We need to start thinking of how we can change the world order. What stops us from establishing a lender institution called the African Club, investing around the world? Why must we always be the ones in debt to organizations like the London and Paris Club? Greece currently needs additional two billion dollars in loan or bail-out funds for the economy to be on track. Guess what, we recently made three billion dollars from power privatization. Unfortunately, almost all this money will be used in paying off Nepa workers. I wonder how their entitlement was calculated that it would gulp this amount! This is just unbelievable. I argued previously that what we need is a National Transformation and not a Conference. Our mindset requires urgent transformation from a consumption perspective to an investment perspective. Today, we can conveniently invest in countries like Greece; Spain; Italy and Portugal; for the future of our nation and our children, only if our Governors are not just interested in sharing “allocation” from Abuja. While it is very convenient to blame this administration for almost everything, I commend the setup of the Sovereign Wealth Fund which has been established with every legal backing inspite of the opposition from the Governors. But the one billion dollars investment fund is not enough when compared to other countries that are serious in taking their people out of poverty. We are a lot better than this! This is the time for African Countries like Nigeria to start investing in foreign country bonds and international corporate bonds. With the right attitude, we can do it and not only be the ones in debt to Europe, America and China. To be a competitive and attractive investment destination, security is paramount. There are breathtaking sites scattered across Northern Nigeria and even the Niger Delta, that are potential tourist havens. But we cannot develop our tourism potential with the activities of Boko Haram in the North, and Kidnappers in the East. We were all surprised at the number of foreigners at the West Gate Mall during the recent Kenya attack. That is the power of tourism, and the benefit to a country when fully developed. Bali in Indonesia is another example, with the Island attracting as much as three million tourists yearly. Compared to Nigeria, we are far behind inspite of our great tourism potential as a result of threats to lives and property all across the country. The security of this country is the responsibility of all of us, and we must start tolerating and living peacefully with people irrespective of their tribes and religion. I do not share Governor Oshiomole’s view in signing a death penalty bill for kidnappers. Historically, such measures have never worked. The only sustainable means of reducing crime in any society is the creation of jobs for the citizens. The general well being of citizens must become the genuine concern of the political leadership, and it is time we shift from the current state of greed and corruption on the part of the elites, to the detriment of critically needed infrastructure and jobs for the unemployed. It is also worrisome that Edo and some other states have approved destruction of properties used for kidnapping. I would advise that such properties should be taken up by government and converted for public use, rather than destruction considering the level of infrastructure still required in Nigeria today. These are some of the decisions we can take today that will secure our future, and it is the collective responsibility of every Nigerian in every sector of our nation for this country to become the nation that we desire. God bless Nigeria. Soji Adeola
Posted on: Mon, 21 Oct 2013 09:48:21 +0000
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