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Of course, Nigeria will be celebrating her flag independence tomorrow in low key as usual. It has been so for many years. Even when the country was to celebrate its Diamond Jubilee four years ago, it was modest as there was not much to celebrate economically. We could not even celebrate 25 years of democracy because the politicians knew the positive dividend of democracy, if it exists, has not reached the citizens. The last five years have been tougher than the five before it. It is difficult to remember when the independence ceremony was held with fanfare. The previous two decades have been years of mixed feelings.
The raison d’être for the played-down celebrations is not far-fetched. As we say on the sidelines, “the economy is not smiling.” There is hardship in the land economically. Albeit, it is a great achievement that Nigeria is celebrating the longest period of democracy. The quarter of a century of democracy can no longer be regarded as very short, though not also long enough for maturity. Nevertheless, we are gradually coming of age politically but remain economically weak, scientifically dependent, and industrially embryonic.
Imagine we had an all-encompassing 25-year economic development plan that was being implemented; we would be better off today. Even when President Yar’adua set up the Vision 20:2020 committee to produce a national plan that would make Nigeria one of the 20 industrialised countries in the world by the year 2020 and we implemented the plan, our economic condition would be better today. But is Nigeria still blessed with visionary leaders who consider the future generations? Those who will start thinking of where Nigeria should be in the next 25 years and plan immediately to achieve the proposed goals.
The politicians in the saddle of leadership today will not be around or be on the sidelines 25 years from now, but history is already recording their actions and inaction. It is possible to restart a nation without a bloody revolution. But that will take a whole lot of planning and implementation. Let us see what can be done now so that we will not celebrate the 65th Independence behind the curtains again. Just like politics has a way of covering up inadequacies through politicking and smooth talking by government functionaries, the economy has a way of exposing the inadequacies of government.
The statistics on an economy can be used to favour or discredit a government depending on which of the variables or factors you are flaunting, but not so with the looks on the faces of the citizens. But then, Nigeria is a country where people are “suffering and smiling.” One can easily be fooled by the look on the faces of Nigerians. That was why some years ago, Nigerians were ranked “the happiest people on earth.”
To celebrate the 65th anniversary with a desirable openness, the government must carry out some review of the present toxic economic environment, which is ‘anti-decent’ living, ‘anti-industrialisation’, and ‘pro-pauperisation’ of the citizens. Which of the policies have been working and which have not? Why have they not worked? Nobody knows everything, particularly when it comes to the issue of economies that are interdependent and transmit external shocks among themselves. There will be many questions and proposed solutions. There should be room for brainstorming on the nation just as private businesses do when planning the next step.
Let me offer some advice. The economic managers must focus on bringing down inflation and promoting appreciation of the exchange rate. Also, there is the need to promote production and productivity. Two prices fuel other prices to cause inflation, and these are energy prices and the exchange rate. The energy prices revolve around the price of petrol/diesel and electricity. Petrol and diesel prices are too high and can be controlled in the interim. Petrol price has spiral effects on transportation and vehicle spare parts; the production by micro, small, and medium-scale enterprises that use non-diesel generators to power their production, while diesel price affects the cost of production in large-scale businesses and trailers for transportation.
The electricity tariff is based on the need to generate revenue and make profit rather than efficiency. Most medium- and large-scale businesses carry out their production operations on diesel engine generators aside from the transportation of raw materials and finished goods. Holding down these prices in the interim until we get out of the production quagmire before liberalisation will go a long way in moderating associated prices.
On exchange rate. Since the Central Bank deliberately devalued the currency, it can also revalue it. Several times, the CBN Governor has said that the naira was undervalued and therefore does not deserve devaluation. Most of the raw materials used in industries are imported, and devaluing the naira has increased the cost of operation and production. Over time, as production improves and the unit cost falls, consequently selling prices, demand will rise to promote more outputs and engineer employment and greater income.
The new policy to be introduced should encourage the initiative of new micro, small and medium-scale businesses and the survival of existing ones to quicken employment generation and income. The interest rates policy should be focused on investments rather than inflation because inflation in Nigeria for now is not a monetary phenomenon—it is more of a cost push and structural. States must also encourage MSMs relating to natural resources at their disposal.
Inflation causes a disincentive to saving and investment, just as it discourages consumption, even of basic needs. It affects the productivity of labour as the real wage rates fall while moonlighting is encouraged. Also, it distorts the tax system and can significantly alter the relative choice of investments. Actually, inflation and depreciation of the domestic currency prevent foreign investments as the investors have to battle with high production costs and a high exchange rate, which reduces the value of the profits they repatriate home. If the inflation and exchange rates are controlled, labour will have no reason to be agitating for new wages.
If we fix major or controlling prices to solve present problems, they can be liberalised as things improve. Nigeria will not be the first country to do that. During the Asian financial crisis in 1997/98, countries that managed their prices had their problems solved earlier than those that relied on the market. It is part of government intervention in the economy when the market fails.
The NNPCL should leave Dangote and other actors in the oil industry alone to produce and price their products based on the cost of production. This will not only encourage other domestic investors in the oil industries but also in other areas of need like iron and steel, as well as other mineral resources. The mineral resources in the North are huge, and that should be the significant area of contributions of the North to the federation account, but it seems some people are just sitting around the resources in collaboration with foreigners and government officials to milk the nation and deprive the citizens of benefiting from the resources, while the areas where the resources are extracted continue to suffer neglect and environmental hazards.
The need to make sure the next 25 years of democracy are not inconspicuous is to start the national plan now. Africa has Agenda 2063, and the United Nations has Sustainable Development Goals after Millennium Development Goals with 15 years each. These are pointers to the need for national development plans. The Buhari Plan is gathering dust in the manner of other reports; let us dust it and review it in line with present government concerns to shape our future development. It is the much we owe future generations of Nigerians.
It is not difficult to turn the economy around in less than two years with proper coordination and honesty of purpose. The government not only needs to swear that the low-key celebration must change henceforth but also work towards it. We cannot continue on low-key celebration ad infinitum.
