Rafsanjani: Implementation of Economic Plan will Boost the Economy

The Executive Director of Civil Society Legislative Advocacy Centre, Auwal Ibrahim Musa Rafsanjani spoke with select journalists, saying if the Economic Recovery and Growth Plan is religiously implemented it will resuscitate the economy. Jonathan Eze brin

ERGP was produced through a process that involved consultations with the private sector and hope such consultative posture would be sustained. I share in the broad principles behind the plan – tackling constraints to growth, particularly fuel, power, unfriendly regulations, and foreign currency

What is your position on the federal government’s economic recovery and growth plan? I commend the federal government for releasing the Economic Recovery and Growth Plan (ERGP), which should provide some degree of policy certainty to domestic and foreign stakeholders on the policy direction of the Nigerian government for our economy. I appreciate the fact that the ERGP was produced through a process that involved consultations with the private sector and hope such consultative posture would be sustained. I share in the broad principles behind the plan – tackling constraints to growth, particularly fuel, power, unfriendly regulations, and foreign currency; leveraging the power of the private sector, promoting national cohesion and social inclusion and allowing markets to work. I also support some specific initiatives and targets stated in the document including the desire to increase oil production to 2.5million barrels per day by 2020; privatisation of specific enterprises and assets; reducing petrol importation by 60 per cent; building a globally competitive economy; and improving infrastructure and the overall business environment. I urge government to ensure a focused, concerted and effective implementation of all the actions and initiatives contained in the ERGP so that the benefits may quickly accrue to the economy, businesses and citizens, and the nation as a whole.

What are the immediate measures the government can take to instill business confidence among Nigerian manufacturers? I think that government should address the infrastructural challenges facing the nation’s manufacturing sector so that all of us can operate at the same level in this country, which will enhance investment drive. Those challenges need to be addressed squarely to move the industry forward, rather than, the diversification programme of the federal government. Today, we know that power supply in this country is nothing to write home about. So, there is need for government to do something in that area to ensure that there is adequate power supply in the country. We cannot move our goods from one part of the country to the others specifically, the heavy ones via road transport. We need to develop a robust rail transport network in the country. Even though, the rail networks we have in this country currently are not well-maintained as they need to be maintained properly. A situation whereby average interest rate in this country hovers around 23 per cent is not acceptable. It does not support manufacturing or investment growth. So, we believe that there is need for government to do something in trying to bring the interest rate regime down to three or five per cent as it is obtained in other clime. Until that is done, the whole programme of diversification of the economy will not work. We think something needs to do something on the multiple taxation issue in the system too. I think government should address that area as there is need to harmonise all the taxes. This was started in 2012-2013, but the gazette is yet to come out. This administration should dust up that recommendation and do something about it.

Given the current economic conditions and the inseparable link between investment and risk, is this a good time to invest? Absolutely. Institutions and individuals in Nigeria are going through some of the most difficult economic times on record and more than ever need to create buffers to enable them weather the storm. Some of the quick actions to take include cutting excesses, reducing debt and saving more amongst a number of other useful measures. Spending less and saving more is a simple step towards sustainability and preparing for the unexpected such as rising prices, job losses, or having to support more family members or others in need. Also, asset prices during downturns and recessions tend to be much more compelling than during boom periods so those that have the discipline to save, end up making some of the best investments over time.

Should government completely divest from ventures and leave every economic activity to private sector operators? That sounds good, but at our level of development and poor capital capacity per capita, there is still a role for government in mentoring economic activities and setting up cluster economic zones. India, China, Malaysia, Brazil and even United Kingdom and others continue to have some state enterprises as take-off points, examples and models to be replicated by the private sector. No doubt, government should create a fair regulatory regime, set standards, operating as an incentive to investors and operators. Government can help with insurance schemes, crop storage facilities located strategically for preservation; develop local and international market through bilateral networks. The West African and larger African market is still not fully tapped into by Nigeria. These are the things that both local and State Governments must be challenged to come back into. They must think seriously about development. Nigerians must go back to agriculture and diversify the economy

Talking about youth migration and jobs, is this something that you feel the Nigerian Government and other world leaders have understood that by transforming these rural spaces they can create jobs? I will say leaders of today, the Nigerian Government and other world leaders are beginning to understand it. Why are they beginning to understand it? It is because they can now see the massive impact of rural migration. And this can be generated or caused by the impact of climate change, extreme droughts that devastate their farms, their livelihoods and they have no other choice than to migrate into the urban cities.

This can be because there are political events that cause migration of the rural people. I always say that what happens in Nigeria today, when most of the talented youths travel to Europe and other parts of the world for greener pastures because of lack of jobs, reverberates in London and Paris and Washington and Berlin.

It is no longer an isolated issue because it affects the global dynamics. And we need to advise ourselves that the whole issue of youth today is all linked with the gross instability, the gross inequalities between the urban and rural space.

Do you think agriculture alone can transform the economy of this country? Agriculture is a base. Once you start processing agric product, it is no longer agriculture, it is manufacturing, so it is a question of agriculture is one of the basic things because you can export agric produce totally on processed ones. It is good enough, but agriculture would provide the basic for all other things to follow.

The minister of agriculture has presented the ‘Green Alternative’ a roadmap for the agricultural sector to the Federal Executive Council, how can the policy be realised and do you see government working the talk? There has never been a shortage of good intentions in this country. If you know the amount of studies that are available in this country, you will be amazed, but the question is implementation. So, if the minister gives a roadmap what, are the implementation criteria, where does he involve the private sector to buy into government programmes because the government does not make money? Where the government tries to run any business, it would be a disaster because there is no profit motive, so when they have such projects in other countries in the world, they will be talking to the bodies particularly private bodies, organised private sector to work with government to see how we can help them implement it.

Tell us how global campaign on food security can be achievable in the world? Hunger is a complex problem, exacerbated by financial pressures, volatile commodity prices, natural disasters, and civil wars. But, we could take an enormous step towards winning the global campaign against malnutrition, simply by investing in improved infrastructure and in agricultural research and development.

This is because one-quarter of all the food in the world is lost each year, owing to inefficient harvesting, inadequate storage, and wastage in the kitchen. Halve that waste, and the world could feed an extra billion people and make hunger yesterday’s problem. The extent of food loss is particularly galling in view of a new global study on food security from the United Nations Food and Agricultural Organisation.

According to the FAO, 57 developing countries have failed to achieve the Millennium Development Goal of halving the proportion of hungry people by this year. One in every nine people on the planet – 795 million in all – still goes to sleep hungry.

Of course, there has also been remarkable progress. Over the last 25 years, the world has fed an extra two billion people, and – for all the 57 failures – the developing world as a whole has almost halved its hunger rate. But, the challenge is to sustain the progress: by 2050, demand for food will have nearly doubled. One reason is that by then the world will have added another two billion mouths to feed; a second reason will be the growing appetite of a surging new middle class. At the moment, the United Nations (UN) is considering 169 new development targets to succeed the Millennium Development Goals (hunger is one target area, among many). These targets are vitally important, because they will determine how more than $2.5 trillion in development money is spent on everything from climate change to malaria.