Making democracy pay
After the general elections in 2011, the Ministry of Commerce and Industry was changed to the Ministry of Trade and Investment to give a focus of improving Nigeria’s trade relations and attracting investment, both domestic and foreign. Few weeks ago, to correct for the gap in the implicit designation, the ministry has been renamed again, now the Ministry of Industry, Trade and Investment (MITI). The name change was one of the first critical economic-related decisions taken by the Jonathan administration, and a good point to start the assessment of the mid-term performance of the administration.
As Ministry of Commerce and Industry, there was no mistaking that it wrongly focused on tariffs in the area of trade, and protectionism as it affected industries – consistently making the infant industry argument for Nigerian industries and neglected superior supply-side issues even as the dynamics of the global economics changed. In two years, the change in name and a new understanding of the role of the ministry has provided a new focus – the much-needed integration of trade and investment.
The change in name has been followed by the streamlining of the work of the ministry and bringing it up to similar government departments all over the world. For instance, the work done by the ministry, while chaotic and distractive before, is now more focused on the promotion of investments with the view to be able to trade competitively.
With the renewed attention given to industry, trade and enterprise, some measure of progress has been recorded. The minister, Olusegun Aganga, basking in the economic growth rates averaging over 5 percent in the last five years and positive economic and investment reports on the country by credible institutions such as Citibank, KPMG, and UNCTAD, has been very aggressive about its marketing. Knowing that the global competitiveness ranking for the country has been very poor, he set about to facilitate the establishment of the National Competitiveness Council (NCC).
But the most important achievement on the trade and investment front is the remarkable fall in the import bill of vegetable oil, textile, and cement in the last year. We hope this is sustainable, because the foundations for a sustainable economy are workable and consistent economic policies.
Yes, the KPMG ranking, which put Nigeria among the four major destinations of investments and growth areas in the world, and the UNCTAD report, which also put Foreign Direct Investment (FDI) into Nigeria at $8.92 billion, the continent’s largest recipient of with FDI 2011, are pointers that something is being done in the right direction. However, domestic and foreign investors would prefer a clear route in the direction of improving Nigeria’s competitiveness.
Production in Nigeria needs to begin to shift from the export of primary products. In two years, the value added to our natural resources and agricultural products has not changed in any significant way. Such changes are what we would like policymakers to drive, catalysing growth and jobs for 9 of 10 that decried the lack of job opportunities in a survey by Pew Foundation.