By Kingsley Moghalu
• Continued from yesterday
The benefits of a liberal arts education notwithstanding, it is clear that education policy in Nigeria must make certain conscious choices if we are to achieve a “quantum leap” of inclusive growth. That choice must be one in favour of technical and vocational skills at this time.
We have talked ourselves hoarse about the need to diversify Nigeria’s economy. But inclusive growth will not be achieved by merely shifting into low-productivity agriculture in the 21st century or mining and exporting raw solid minerals. The latter will simply create another channel of commodity dependency and further exposure to the booms and busts of commodity cycles. That is not the model on which the true wealth of nations is based. Our experience with oil, in which we export crude and import refined petroleum products because we failed to invest adequately in refineries, should have taught us this simple lesson.
Real diversification means a value chain of industrialisation and value addition in a number of industries, whether based initially on agricultural or mineral resources, or, additionally, beyond natural resources to create other competitive goods for export. This means, in the area of solid minerals, that we need to be far-sighted and require beneficiation (value-addition) to any solid mineral mined in Nigeria before its export prior to granting mining licenses to investors. That is what creates jobs. True diversification of economies across sectors requires a strategy to achieve economic complexity (a subject I will address in more detail another day). Achieving inclusive growth in this manner also requires political will to overcome the corruption and patronage systems that are frequently linked to natural resources.
Nigeria needs to create a social contract between the state and its citizens. This involves, primarily, the obligations of citizens (such as paying taxes) in exchange for the protection of life and limb, civil liberties and their limits, as well as the sustainable provision of basic infrastructure and social safety nets by the state. This gives citizens a sense of belonging, with mutual accountabilities between the government and the governed. One way to achieve this is to bring the millions in Nigeria’s informal economy into the formal sector, including by making innovative use of the ubiquitous mobile telephones that are owned by 140 million Nigerians.
This is linked to financial inclusion. Inadequate access to finance plagues Nigeria’s small and medium enterprises, resulting in the oxymoron of capitalism without capital. It is not enough to strengthen the role of development banks, though that is essential.
Beyond this, more private sector regional banks in geopolitical zones should be encouraged as a matter of policy, so that finance is located closer to rural and semi-rural populations as well as the urban small businesses. It is shocking that, as a recent report of the Nigerian Bureau of Statistics revealed, 77 per cent of bank credit in Nigeria in 2015 went to Lagos alone. That’s just one of the 36 states, and only 10 per cent of Nigeria’s population.
This is extreme financial exclusion, a model that cannot build or sustain an inclusive growth economy. The role of the private sector more broadly is similarly critical. Business will play a driving role in inclusive growth if the power of competition, privatisation and deregulation is unleashed in a manner that avoids abusive crony capitalism.
Finally, Nigeria will not achieve real inclusive growth without inclusive governance. We will continue to suffer instability and be distracted from strategic economic transformation if the foundational elements of political inclusion for Nigeria’s diverse citizens are not addressed sincerely and effectively. The federal government today came to office in an election in which the opposition defeated an incumbent president.
This gives it a unique opportunity to begin to truly heal Nigeria’s wounds. A political re-engineering of our nationhood and our economy by revisiting a constitutional structure that traps us in a vicious circle of poverty and underdevelopment, focused as it is on “sharing” rather than production and true wealth creation, will provide the foundation for real economic transformation.
• Dr. Moghalu, a former Deputy Governor of the Central Bank of Nigeria, is Professor of Practice in International Business and Public Policy and Senior Fellow in the Council on Emerging Market Enterprises at The Fletcher School of Law and Diplomacy at Tufts University, USA.
Vandalism and power supply
By Bisi Koyejo
A proogramme on television recently highlighted the awfully negative effect of vandalism of gas pipelines nationwide, as it affects electricity generation and distribution in Nigeria. Given such a bad situation, one is really taken aback by the position of a section of the power industry, especially the trade unions, that the electricity distribution companies should be blamed for poor power supply.
It is becoming apparent that the labour unions influenced the Senate in stopping the new tariffs, which has become a subject of litigation, with the Nigerian Electricity Regulation Commission (NERC) taking the Senate to court. Therefore, the television programme has served as an eye opener. The unions know what the problems are. Therefore, they should join hands with security agencies to end vandalism in order to make the generation of electricity hitch-free. They can mobilise their workers positively in this regard so that they can keep their jobs
If the GENCOs and DISCOs work well, there will be steady electricity supply, which will be commensurate with the tariffs.
• Koyejo, an analyst, writes from Bauchi