NIGERIA’S ECONOMY OF THE FUTURE
President Buhari is on the right economic trajectory, writes Charles Onunaiju
If any past government, at the least in the past 20 years have started the structural shift of the country’s strategic economic fundamentals, as the President Buhari-led government has started recently, Nigeria would be taking its pride of place among the emerging and middle income economies in the MINT (MEXICO, INDONESIA, NIGERIA AND TURKEY) for which she was earlier and optimistically grouped. The avoidable spread of poverty and misery that is ravaging the country currently would have been a thing of the past.
The making of contemporary emerging economies rest on three strategic pillars- agricultural modernisation, infrastructure construction especially transport network featuring road, rail and air and of course power. The third decisive pillar is industrialisation.
These three strategic pillars of modern emerging economy did not receive any appreciable and consistent attention in Nigeria and their conspicuous absence, in the priority consideration of economic planning, at least in the past 20 years, account for the massive structural disconnect that has hampered any meaningful and sustainable economic progress.
Other members of the MINT hopefuls, which invested in these core and strategic economic fundamentals are growing exponentially, creating jobs and lifting millions of their citizens out of poverty. Nigeria’s successive governments before now have been stuck in the comfort zone of simple natural resource extraction especially, hydrocarbon, without any effort at value creation or addition. The accrued rents from simple resource extraction went into funding the reckless lifestyle of the political class and their parasitic surrogates in the business and religious circles.
Indonesia with a population of nearly 300 million spread in far-flung archipelagoes has a solid middle class of about 150 million spread across value creating chains of entrepreneurship, ICT and engineering professionals. A top member of the political elite and governor, who laid his itching finger to the public purse for a mere $20,000, has been sentenced to prison for the next 10 years. Indonesian courts have no time for the antics of senior advocates and those who hire them to turn justice into an exhaustive mountain climb.
President Buhari and his team have no magic wand to turn one naira into one dollar now notwithstanding their campaign grand standing, but if they can sustain the trajectories of their current economic focus, one U.S. dollars is most likely to worth less than one naira in the next 20 years.
Some major and key milestones include the recent finalisation of the contract to build the Mambilla power plant, which would add about 4,000 megawatts to the current epileptic national grid. The consequence of the project when completed would be a strategic gamechanger to Nigeria’s economic fortunes. Artisans, middle scale industrialists, business start-ups who spend about 30% of their capital into sourcing their own power would be considerably relieved as they become more competitive, and with obvious reduction in their cost of production. With appreciable stability of Nigeria’s power supply that would follow the completion of the Mambilla power project, Nigeria’s entrepreneurial spirit would be significantly unleashed and the prospects of being a regional manufacturing hub would no longer be a distant dream.
The transport arteries, especially the inauguration of railway lines that the President Buhari has embarked currently, would trigger connectivity that is at the heart of contemporary emerging economies whose effect would be to create an integrated domestic market, enhancing supply and demand chains with powerful incentives for handsome rewards for productive activities. Already, the Abuja-Kaduna railway line launched and put to use since July 2016 is making modest economic impacts along its routes. Young men and women who could have been susceptible to anti-social vices of crimes and prostitution and even terrorism are engaged in informal modest economic activities in the more than 10 stations along the railway routes. New communities along the rail transport corridors will emerge, thereby lifting the pressure on the existing human settlements.
The overall impact of a nationwide railway networks, connecting communities, cities and states would have decisive effect on the Nigeria’s economy of the future. In giving the nod to the flag-off of the construction of Lagos-Ibadan-Kano railway line, Port Harcourt-Maiduguri, President Buhari has demonstrated a profound grasp and insight of key element that would build inclusive and sustainable economy of the future. Road and air transport network should also receive such commendable commitment and the implication of a modern transport infrastructure to unleash the momentum of the economic development cannot be overemphasised but would be clearly self-evident very soon.
Of course, the factory floors will have little to process and even the transport networks would be marginally useful if agriculture is not modernised and significantly improved. The agricultural sector is the chief support infrastructure to industrialisation. President Buhari has demonstrated an uncommon resolve to revive and modernise the agricultural sector and the results so far, are too glaring for anyone to see. He hit the nail at the point at the recent launching of a multi-billion naira Singaporean invested agroindustrial conglomerate, Olam integrated poultry and feeds mill in Kaduna State. President restated his administration’s “belief that agriculture offers the most viable and all-encompassing option in an attempt to diversify our national economy and it is in this direction that we must feed ourselves from what we grow and grow what we eat before we can comfortably turn our attention to many key problems of our daily lives”.
This effusive philosophical reflection of President Buhari must be translated into a coherent and implementable policy platform to drive the value-multiplying agro-Industrial sector with implications for sustainable and inclusive growth and even a prospect of more equitably and widely shared prosperity.
Should President Buhari and his team stay focused on the key and major priority areas of rebuilding the economy through agricultural modernisation, industrialisation and infrastructure construction, Nigeria in the next few years would have established the enabling framework for continuous growth, as its other peers in the MINT, the next big thing in global economic growth, following in the footsteps of their BRICS(Brazil, Russia, India, China and South Africa) counterparts.
As soon as a framework for sustainable economic growth is established, Nigeria’s currency, the naira would incrementally acquire more value, created by enhanced productive economic activities. Any other way of shoring up the value of naira, outside the effort of value creation and multiplication through increased and enhanced productivity, would not be sustainable in the long run.
When once Nigeria is transformed to an opportunity and not liability to every Nigerian, the most toxic pressures on the national unity and stability of the country, consisting of separatist agitations, religious fanaticism, horrific crimes like kidnappings and ritual killings would be considerably ameliorated. But for this to happen, President Buhari must stay focus and even engage more robustly on their current economic trajectory.
Mr. Onunaiju is director, Center for China Studies, Utako, Abuja