From Magnus Eze and Basil Obasi, Abuja
As if to support the bid of the Federal Government to spend its way out of the recession, Mr. Niyi Yusuf, the Chief Executive Officer/Country Director of Accenture Nigeria, says Government everywhere is a big spender. And in order to encourage the local industries, he opines that the Federal Government should adopt Small Business Administration (SBA), which basically functions towards increasing the viability of small businesses by ensuring that 23 per cent of prime federal contracts are given to small businesses. In this interface, Yusuf believes this is one way of promoting buy Nigeria. He delves into sundry issues bordering on the economy.
We must know that the choice of the theme of the last National Economic Summit Group (NESG) summit, “Made-in-Nigeria”, is deliberate, bearing in mind the crisis the country is going through today, which is largely caused by high import volume. Nigeria is almost importing everything either as direct input or secondary inputs without substantive export strength. And so, my own thinking is that the NESG is doing this for a number of reasons.
One is to communicate to all of us the urgency of the situation and why it is important that we take a critical and almost immediate action or actions, considering that we don’t have the latitude of time to say we will do this next year or the next two years.
This is because we cannot predict when the price of crude oil will go up. Most people say the price of crude oil will not go back to $100 anytime soon. This means we need to wake up and begin to take proactive actions, acknowledging that there is need to evolve a sustainable long run solution to this problem.
So I think that NESG is propelled by the crucial need for us to reduce the level of imports and improve our local production particularly in the non-oil sector, the real sectors, such that it takes over from oil as our foreign exchange earner, increase our export volume, solve our balance of payment problem and promote Nigeria to the place of self-sustainability.
One key thing therefore is that we come out of our dependence on imports and as we can see, the president’s speech during the summit alluded to the fact that he also understands that ‘Made-in-Nigeria’ drive is very important.
The second thing I believe the summit will help us achieve is setting priorities. We need to achieve certain targets in every sector but we have limited resources in terms of time, men and materials, so we need to prioritise our efforts. So NESG provided opportunity for various stakeholders to agree on what the immediate priorities are across sectors, so that we know that those priorities are where we should focus our energy, resources and investments, such that when we achieve one target, we can then move on to the next set of priorities.
The third thing is communication; letting people be aware of what the challenges are, what the potential solutions are and in which area/areas, and more importantly, what each person needs to do as well as to understand how each person can contribute to ensuring that we achieve the ultimate goal of making this country self-sufficient in certain things since we know we will always continue to import. At least, we have achieved self-sufficiency with cement; we also need to achieve it with the petroleum sector. As we know, Nigeria is the only member of OPEC (Organisation of Petroleum Exporting Countries) that still imports refined crude.
So if all we do is achieving self-sufficiency in some of these critical areas and then push our government to provide the enabling environment and infrastructure to ensure that these things work, be it electricity, good road networks and intermodal transportation, then we can say that the NESG Summit 2016 was a very successful one.
The political will is now available but I think the policy environment has to be reviewed, updated and fine-tuned to reflect the ever changing dynamics. For instance, there are issues about multiple regulators with overlapping functions. We have so many regulators. So you ask yourself, we have those regulating the doing of things but we do not have those promoting the doing of things. NAFDAC, for example, will tell you that its role is regulating the manufacturing of drugs and food etc.; you equally have Standards Organisation of Nigeria (SON) whose role is to regulate and ensure that production conforms to certain standards, but which agency is promoting the doing of things? Who is that regulator that is working with the manufacturers and SMEs to ensure that they survive harsh economic situations or policies to produce items and remain in business?
In the course of the summit, the MD of Nigerian Breweries said that if you want to register a company, you have 14 regulating institutions; if you want to place adverts you have four regulators. So it will be nice if we have four regulators that will be pushing and promoting agriculture and agribusiness, local production by providing appropriate intervention that stimulates production.
We talk about increasing the ease of doing business and it is quite commendable that government has set up a commission on that, so we pray things will eventually improve. Look at the Nigeria Customs Service (NCS); it has four core functions including collection of revenue, anti-smuggling activities, border protection and trade facilitation. In other countries like in the US, Customs focuses primarily on trade facilitation but in Nigeria they focus primarily on revenue generation and then secondarily on border protection and lastly trade facilitation.
These are some of the policy issues we need to review. Government set up the export expansion grant in 1999 to encourage non-oil exports but for the last three years, it has been suspended because of abuse. I don’t support the abuse but you cannot throw away the baby with the bath water; you cannot because of abuse by some persons suspend an incentive programme that can deliver the country from its economic perils by increasing the level of non-oil export for the country.
As part of our corporate citizenship initiative, we have what we call Skills to Succeed (S2S), which focuses on two major things – training young people to become employable and training business people to be able to upscale and begin to do well in their businesses through training in business planning, book keeping, packaging, among others.
Accenture also mobilises people, partners, clients and others and strives to make a measurable and sustainable difference in the economic vitality and resilience of individuals, families and communities.
For instance, every year for the last three years, we supported Lagos Chamber of Commerce and Industry (LCCI) to mentor and train 50 SMEs every year, acting as a mentor for young SMEs.
Accenture provides capacity building to young SMEs to allow them do their business better while helping the job seeking ones gain requisite employable skills.
I think the exchange rate issue is a problem of supply and demand. Because we do not earn enough forex, the supply is lower than its demand, government needs to find means of increasing supply and reducing the demand for foreign exchange.
The Central Bank of Nigeria (CBN) is already working on a number of initiatives such as diversification and listing of certain items that are not eligible for forex; those are all means of reducing demand for foreign exchange.
Another means of reducing foreign exchange demand is the promotion of the consumption of made-in-Nigeria goods and services. For instance, a US official on official trips will only fly the US airlines if that ticket will be purchased by the US government; this reduces their import volume and strengthens the US dollar. So we need to promote patronage for our own products and services as a way of reducing demand for foreign exchange.
As we all know, government everywhere is a big spender; in the US, there is what they call Small Business Administration (SBA), which basically functions towards increasing the viability of small businesses by ensuring that 23 per cent of prime federal contracts are given to small businesses. Nigeria can domesticate this policy as a way of encouraging operation of indigenous local industries and promoting buy Nigeria.
Structurally, it is about increasing our level of self-sufficiency in some critical sectors and in effect, lowering our demand for foreign exchange.
For instance, rice, when I was growing up, used to be a weekend delicacy but now rice is taken almost as a three square meal seven days of the week with this consumption heavily dependent on imported rice. If we can become self-sufficient in rice, it will reduce demand for forex and as this demand falls, prices will fall.
Talking about increasing the supply of forex, we are supposed to make the position of the CBN clear that you can bring in forex to invest in Nigeria and you will not have any problem taking it out when you want to repatriate your dividends to your home country. Also, government can take low interest multilateral loans. These strategies could be seen as immediate first aid before we start talking about attracting long term Foreign Direct Investment (FDI) because as we know, FDI looks for an area of high returns and acceptable risks and so that may take a while to come.
Another easy way of getting these funds is assets sale but we need to look at what should be sold, how it should be sold and who it should be sold to. These are the key issues that would ensure that we achieve desired result. But fundamentally, selling what you have to get what you want is an old principle.
Next is by addressing the problem we have in the Niger Delta. Part of our major problems today is largely caused by fall in foreign exchange earnings accruing to the Nigerian oil sector. We are talking about fall in price in the international market, which is a global issue but then we still have the problem about reduction in production due to Niger Delta militancy. So if we address the issue about militancy such that production goes back to 2.2 billion barrels a day, we can have more forex, selling a higher quantity even at a reduced price.