By Okechukwu Emeh, Jr
As part of the impelling necessity to diversify our economy, the present administration in Nigeria should recognise the value of intellectual creativity, technological innovation and talents, which have played a key role in driving economic transformation in many progressive parts of the world, especially Europe, North America and East Asia. This is exemplified in the inchoate knowledge-driven economy, as deeply embedded in different fields of human endeavour like science and technology (including the brave new world of information and communications technology or ICT, nanotechnology and biotechnology) and entrepreneurship.
There is no doubt that discoveries from such arcane fields would bring immense economic benefits to Nigeria through patent rights that could run into billions of dollars, in addition to linking the country to global markets through exports of finished goods and services.
In view of the foregoing, we have no choice than to embrace intellectual creativity, technology innovation and talents as a realistic means of leapfrogging our economy. And such areas could be enhanced by promotion of research and development (R & D) and human capacity building.
As part of a deliberate measure to promote brain gain in Nigeria – as opposed to brain drain – the Federal Government should create a climate that would make our highly skilled and qualified professionals in fields like teaching, medicine and engineering not to leave the country in search for greener pastures. This would require providing, among other things, appropriate incentives (including fabulous salaries and allowances), job security, functional public infrastructure and social services and protection of lives and properties.
Promotion of private sector investment is also central to rapid economic recovery in Nigeria. In this regard, it is notable that in most parts of Europe, North America and East Asia where market economy has reached an advanced stage, the sector is the main driver of their economy that creates wealth, jobs and other opportunities. This is in stark contrast with many countries in sub-Saharan Africa like Nigeria, where undue emphasis is placed on their public sector, which is often beset by corruption, mismanagement and bureaucratic inefficiency.
In any case, it is hoped that the Federal Government would provide the enabling environment for the thriving of our private sector – both formal and non-formal. This would demand formulating necessary incentives like tax holiday and cheap loans for new businesses with good prospects, providing basic amenities like uninterrupted power supply and access roads, exposing youths to entrepreneurship training in order to address the problem of unemployment facing them and maintaining security.
Apart from such measures impelling our population to be economically active, they would also encourage emerging middle class entrepreneurs and professionals in Nigeria who are struggling to make the country generate and sustain her own wealth by transforming private investment in goods and services into social wealth through creation of jobs and other socio-economic opportunities, in tune with what the business mogul, Mr Tony Elumelu, has termed Africapitalism.
At the same time, the government, for profit purposes, should consider privatising or commercialising public enterprises that are not lucrative, especially some of them in sectors like oil and gas, maritime, transport and electricity generation. This is not to glide over the imperative of the Federal Government to encourage active Public Private Partnership (PPP) in providing or managing basic infrastructure like roads, bridges, ports, airports and railways, as done in most advanced economies.
Considering the prevailing uneconomic nature of crude oil prices, the administration of President Buhari should take a decisive step to attract foreign directive investments (FDIs) into Nigeria. This is for several tenable reasons. One, FDIs would generate capital, superior technology, managerial knowledge and world class best business practices acutely needed for our developing economy. Two, with regard to labour-intensive manufacturing with simple technology, foreign investments would play the role of a “tutor”, teaching technology, managerial skills and marketing to entrepreneurs, along with encouraging the growth of local skilled managers and labourers by making them set up their own business.
Three, FDIs are a prerequisite for Nigeria to establish new industries that produce at low cost. And four, foreign investments would provide a sound basis for technology transfer and co-prosperity between such investors and our host country.
Arising from the above, the Federal Government should create a congenial atmosphere for inflow of FDIs into Nigeria. This would necessitate removing encumbrances to foreign investments in the country like tariff barriers, discriminatory practices and legal and regulatory uncertainties in order to ensure strong investments protection and effective dispute settlement procedures. Setting high standards for liberalisation of investment regimes in Nigeria would also require addressing the problems of bribery, corruption, multiple taxation, poor infrastructure (especially erratic power supply and decrepit roads), frequent fuel scarcity, political uncertainty and national insecurity.
Adding to the diversification facets that would make our economy to have huge potential for catch-up growth in these times of oil gloom is effective and accountable taxation. That Nigeria has suffered much revenue haemorrhage from tax offences like evasion and avoidance is not in disputation. This is not to mention billions of naira the country is gratuitously losing as revenues annually through leakages (corruption and wastes) in critical sectors like oil and gas, maritime, mining and customs and excuse.
Even recurring offences in Nigeria like violation of public rules and regulations (including disregarding traffic light, environmental abuses and breaching safety standards), which should have been an avenue to generate revenues for government through financial penalties or fines, are either overlooked or treated with levity by relevant agencies.
It is a well-known fact that countries with few natural resources like the UK, Switzerland and Israel depend partly on taxation and fines for their economic sustenance. It is, however, commendable that the Buhari regime has expressed commitment to reform tax administration in Nigeria with an eye to meeting economic and social needs of the populace.
Expectedly, this would not only require broadening the tax base in the country in order to reduce our dependence on crude oil receipts, but also making Nigerians to reap the benefits of part of their hard-earned cash paid as tax through availability of functional public amenities and social services.
Tax reform is also imperative in Nigeria in order to ensure that proceeds from taxation are not leaked into the offshore accounts of public office-holders.
Also praiseworthy is the implementation of the Treasury Single Account (TSA) by the present administration, which, unarguably, has ensured that all revenues generated by ministries, departments and agencies (MDAs) of the Federal Government are remitted into the federation account. So far, it is reported that about N3 trillion has been realised as savings by the government since the introduction of the innovative TSA policy last year – a gigantic sum a sizeable quarter of it would have disappeared into private pockets in the past.
It is, however, advisable that a substantial part of the savings be pumped into kick-starting our economy, with significant emphasis placed on investing in public sector projects aimed at improving infrastructure and social services, creating jobs and eradicating abject poverty.
•Emeh, a social researcher, writes from Abuja