Omodele Adigun
As the International Monetary Fund(IMF) reversed the nation’s growth to -4.3 per cent this year–end, Mr Bismark Rewane, the Managing Director/CEO of Financial Derivatives Company, says positive growth, and indeed, double-digit growth is possible sooner than later if the Federal Government mobilises fund to finish uncompleted projects, worth $102billion, scattered across the country.
According to Rewane, what the government needs to do to achieve double digit growth is to prioritise what it wants to do; optimise what it’s doing; and then execute efficiently .
Rewane, who gave the advice at the recent inaugural session of Concrete Ideas Webinar series, with the theme: Approaches to Rapidly Upscaling Nigeria’s Economic Infrastructure, organised by Lafarge Africa Plc, lamented that the economy would not grow sustainably without positive total factor productivity: He stated:“ At least 60 per cent of all gross fixed investments and infrastructure in the country are what we call stranded projects; incomplete projects, which , guess what, have a negative multiplier because they are paying interests on those loans; they are producing no jobs; they are not affecting total factor productivity. And so, the economy is sinking. Total factor productivity in Nigeria today , in the last five years, is -2.8. In China, it is over 8 per cent. Twenty, 30 years ago, our GDP per head was four times that of China.
“So first and foremost, how do we get the $102 billion of fixed investments in Nigeria to get completed so that there is minimum stranded infrastructure. Two, how do we build on this so that it become, at least, 10 to 25 per cent of GDP? Three, how do we use this as a vehicle for smoothing out income inequality and opportunity. Four, more important than anything else, how do we build the social and institutional infrastructure, police force, the judiciary, the central bank; the educational system that will complement the physical infrastructure, because you see governors going to open schools and build bridges. Bridges to where? Bridges to nowhere!
“Two things that will affect total factor productivity are the efficient use of the capital stock; you capital stock is negative and you are paying awesome on it; and besides that, you are also pillaging. And there are leakages. Leakages are negative to the output, while injections are positive. So you have the leakages; you have the idle stranded assets, and you have inefficient use of, even those assets that have been completed. All of those lead to negative outcome. That is why we are where we are.
So things to do today is to prioritise what you want to do; to optimise what you are doing; and then to execute efficiently. That is the situation that we find ourselves. So you can raise N200 billion of Sukkuk. But ask me, how many projects are you going to complete that can get people from here to C? So how do we prioritise the completion of projects? How do we get private sector investment in? And in a positive multiplier effect to complete these projects? And how do we execute?