Walter Ukaegbu, Abuja
Dr Chris Osi Itsede, a National Policy analyst and economic management specialist is also the Executive Chairman, Polar-Afrique Consulting Limited based in Abuja. Itsde who was a former Director at the Central Bank of Nigeria (CBN), said by comparison, Egypt, South Africa and many smaller developing countries have better ease of doing business quotient and enhanced regulatory environment than Nigeria resulting in better flow of foreign direct investment capital to such countries instead of Nigeria. He also spoke on the nation’s currency variation rate, among others.
Nation’s business environment
I think the business climate in Nigeria has been nosediving for a very long time as a result of inability of the leadership, past and present, to squarely face the realities of the nation. Although the present administration tried to solve the problems in some areas but we still have enormous imbalances and impediments in conducting business activities in the country and nothing has happened yet to give us hope of a healthier business environment because the main impediments are still there.
We still have a long way to go. For example, we have serious issues at our arrival points such as the immigration, the Customs and the airports, which are the first line of contact for the international community. We must improve the areas of international tourism if we want to be taken serious as a nation. Any serious administration should make it a major programme that it would embark upon in its drive for foreign investment because these are some of the key elements involved in the ease of doing business that members of the international community would look at before deciding whether or not to invest in any country. I am not only talking about key infrastructure but also the other elements of development that drive business.
Has ease of doing business improved?
Well, I will not call government’s position propaganda. Rather, I think that every government wants to hype whatever it is doing in the eyes of the public to give the impression that it is working. Nigeria has been a place where subsequent governments have not been doing much to promote what are necessary to the economic growth of the nation. Since independence, any little thing that is done is seen as a major achievement whether or not it has the required impact. Like I said earlier, so much still needs to be done within the business environment especially in the areas of improving the soft infrastructure, which drives the economic super-structure of the country. Here, we are talking also about changing the mindset of the people in government to focus on the right things.
Ease of doing business attracting better foreign investment
No. Let us be frank with ourselves because the moment we insist on being patriotic and nationalistic, we start lying to ourselves about those issues that need to be improved upon. The ease of doing business in Nigeria is not as attractive as it is in South Africa. Even Egypt and many emerging economies in the region have better conditions to attract business and investment. We can determine this by the flow of foreign capital in the past few years into the country and into other countries. What comes into Nigeria is a fraction of what we should get considering the vast potential of the nation. It is next to nothing when we compare them with what other smaller countries are getting. This is because the climate is not clement enough to encourage people to invest. Government should not be driving business in the 21st century. Government has always been a bad driver of business.
The governments in Nigeria have not been an exemption. We should be working towards having lesser, smaller government involvement in certain activities. The government itself is too big and too large an institution to get involved also in business and management of the economy. Government should concentrate more on developing policies and in providing proper regulation by ensuring that the nation has standard laws that are comparable to what obtains elsewhere in other parts of the world. Government should not participate in production and distribution. These functions are better performed by the private sector. As it is now, there are several areas of the economy that members of the private sector are afraid to invest in because of conflicting government policies or the lack of clear-cut policy decisions.
Performance of regulatory bodies Nigeria has the most confusing or crude regulatory environment in the region. The people who are at the helm of affairs in many of these agencies need complete mental and behavioural re-orientation to enable them perform their assigned functions better. Many of our regulatory agencies are controlled by the same operators who would not want the economy to improve or grow so that they can continue importing finished goods from abroad.
It is even sad that chief executives of regulatory agencies are seen consorting or hobnobbing in private jets with directors of the agencies they are supposed to regulate or supervise. Elsewhere, such things do not happen where, for example, the Governor of the Central Bank will be enjoying a ride in the private airplane belonging to the chief executive of a bank the agency is regulating. It gives room for unnecessary compromise. This happens in different sectors of the economy in Nigeria and people think it is normal.
Tackling power supply challenges There is the glaring evidence of economic mismanagement over the years. It is a paradox that even this administration which was expected to have made some impact on these sectors by correcting these anomalies has performed even worse. What we hear every day and read in the papers are the numbers of ships bringing in containers of goods and fuel tankers arriving into the country when we have some of these resources in such sufficiency. It is really the shame of a nation. Our leaders do not seem to know how many jobs they are generating for the countries sending tanker loads of petroleum products to this nation.
There is nothing else to say except that this shows lack of clear economic management ability, not only by this government, but by previous administrations. The present administration has even gone further by doing everything within its powers to ensure that it scores even lower marks in terms of economic management since it came into office. Businesses and industries are dying or closing everyday in the country and jobs are being lost due to harsh economic conditions. It is sad that governments come and go in the country without ensuring that our refineries function well. It is very sad indeed.
Take on modular refineries
It is not touting an idea that matters. Do we have the relevant infrastructure to sustain these modular refineries when established? How will people source for the required infrastructure when they take off? These are critical questions to be answered while talking about modular refineries. We have been shouting and advocating for these for a long time but it is only now that the government has started listening.
The modular approach is easier to maintain than the large scale refineries. What we expect from the Ministry of Petroleum now, which we have not seen yet, is a clear cut policy or guidelines on how these mini-refineries will operate. Who should be responsible to monitor the standard of products that will be produced by the refineries for the safety of Nigerians or will it be an all-comers affair despite the need for them to comply with international standards? Such guidelines or policy outlines have not yet been produced to the best of my knowledge but they are very necessary. The right thing to do is for the government to formulate such a policy first and to spell out which agency will be responsible for the regulation or monitoring of the products from the modular refineries for proper national standard.
Instability in exchange rate regime
The sad thing that happened with the Central Bank was that it allowed itself to be trapped or caged by the political establishment. The exchange rate management in the country has not been optimal or encouraging. It is a clear manifestation of bad micro-economic managament to have different windows for different users. Those who are benefiting from this arrangement are people who are priviledged, who can move from one window to another. It is certainly bad for the economy. Exchange rate is very important in economic management especially in an import-driven economy like we have in Nigeria.
I sympatise with CBN because it appeared that its management allowed itself to be intimidated and manipulated by the present political actors at the federal level and later actions by the bank came a bit too late to make any significant impact. Do not forget that the political actors before coming into office promised to bring the exchange rate at one naira per one dollar. What the management of the CBN would have done was to advise the government that exchange rates are not decided on political statements or interference. The exchange rate is the function of the productivity of an economy. If the economy is doing well, the exchange rate of the currency will be forced to stabilise by itself. The productive sectors of the economy should be worked upon before we can come out of the present dilemma.
Advice to government on farmer/herdsmen crisis
There is need to address the causes of any problem in order to find lasting solutions. The cattle grazing crisis is a consequence of three related causes including the southward expansion of the Sahara desert, which has eaten up much of the grass in the Sahel Savannah belt and dried up a huge chunk of the Lake Chad Basin and other fresh water bodies. There is also the failure of relevant ministries and institutions at the federal and state governments to formulate proactive policies and effectively implement them over the past decades. Consider, for instance, the Pan-African initiative known as the Great Green Wall. If Nigeria had effectively leveraged on the window of opportunity created by this continental project to combat desertification within its jurisdiction, the wholesale southward migration of herdsmen and their cattle would not have taken this unmanageable dimension which has now worsened the security situation in the country.
The improvements in veterinary health care delivery and breeding techniques have spurred a steady growth in the birth rate and population of the cattle stock. Juxtapose this with the steady diminution of available grassland and tell me the outcome. These are the economic, environmental and demographic drivers of the grazing land brouhaha. Also, herders must be disarmed to curb the killings.
I would advice the Ministries of Environment, Agriculture and Natural Resources to do a critical assessment of the Great Green Wall of Nigeria and the various aspects of the grazing problems and come up with implementable short to long term solutions instead of talking about cattle colonies. This is not rocket science. The relevant expertise is plentiful in the country for better ranching and modern cattle breeding techniques. We only need the political will and the vision to act so that we can save lives.